Owner Finance through the rehab?

[Daniel Rosenberger]

Need some detailed help.

Owner wants 60k for the house, needs 30k rehab and ARV is around 120k-130k. He has owned it 5 plus years after mother passed. This was his original boyhood home. I want to offer him 2 options.

Please correct me if I am wrong and add your $.02...

Option 1:

Buy home cash for $48k. But then I will have to put the home in my name and deal with capital gains after sale along with the carrying costs plus loan debt.

Option 2:

Buy home for 60k. Have him keep home in his name. I use my cash to rehab. Then sell and give him the 60k he wants for the home. Would I have to pay capital gains?

If he goes for option 2, how do I secure this deal? I don’t want to get screwed out of the money if the house isn’t in my name at time of sale. I also want to frame this so he doesn’t think I can get over on him.

I think option 2 is the best way for all parties involved.