Assignment, Simultaneous Closings, or Other Ideas?

[Allie Dickson]

Hello, Investor Pros!

My husband and I have a potential opportunity in front of us. Our friend, let's call him "Bob", in the San Francisco Bay Area has a property built in 1960 that has never been updated. My husband and Bob have been friends for years, we've never seen his home, and there have been some red flags that make us believe Bob could be a hoarder. A realtor suggested a list price of $1.7M. I had the idea to make an agreement with Bob to purchase the home from him for $1.8M with the contingency to help him go through his things and put them in storage within a month or other agreed upon set timeframe. Then we would use our $100k cash and take 2 or 3 months to renovate the property then list it. From the comps it seems we could sell the updated property for $2.2M (conservatively). I would want to write in the contract that Bob would be paid his $1.8M out of escrow from our buyer paying $2.2M. We would receive the difference between $1.8M and $2.2M for doing the renovation and helping Bob move, potentially making $300k. What do you think the best way to structure the deal is? Is this a crazy idea? Are there other stipulations you would include in a deal like this?

Thank you so much in advance for your help!! :D