Has Anyone Tried This Strategy?

[Andrew Gavre]

I am targeting homeowners with dilapidated homes that need repair and offering to pay for the rehab and split the profits with them at the end of the project after the sale of the home. 

Any idea what this would be called and how to structure it legally? I obviously would want to have control over the property and maybe a pre-determined purchase price?

Thanks in Advance!

[Jonathan Taylor Smith]

I've seen this TV show - just can't remember the name... It is two female Realtors who partner with distressed property owners to get the house rehabbed and sold. They handle the rehab, then sell the property (acting as listing agents), and split the profit with the property owner / seller. From your post it does not sound like you're a licensed agent, but the concept is the same. If I recall, there is also a company offering a similar service.

[Shervin Golgiri]

I would first make sure to run a detail search on property. make sure you're talking to who the owner actually is. second, I check and see how much equity the homeowner has, and if there are any lien on the property. after you gather all that, then you can have an investor friendly agent help you with drafting a contract. so, you can have a contract in hand but also a Lien on the title, to make sure you're getting paid. 

Are you a contractor as well or just funding the project?

[Don Konipol]

Quote from @Andrew Gavre:

I am targeting homeowners with dilapidated homes that need repair and offering to pay for the rehab and split the profits with them at the end of the project after the sale of the home. 

Any idea what this would be called and how to structure it legally? I obviously would want to have control over the property and maybe a pre-determined purchase price?

Thanks in Advance!

Sounds good in theory.  A percentage of these will end up in court when
1. Homeowner decides they don’t want to sell after the repair/improvement work is done
2. Homeowner decides they were “taken advantage of” by investor
3. Homeowner believes they can threaten lawsuit based on Dodd Frank, CFPB non compliance, DTP, etc., and obtain “better” result
4. Homeowner isn’t happy with quality of repairs
5. House doesn’t sell for price anticipated
6. House doesn’t sell in time frame anticipated
7. Homeowner fails to make mortgage payments
8. Liens not found in lien search surface
9. Sub contractor files lien
10. Homeowner has creditor file for judgement
11. Someone files lis pendens 
12. Homeowner dies and heirs don’t want to “split” proceeds
13. Homeowner becomes incapacitated
14. Homeowner refuses to vacate house upon sale
15. Homeowner refuses to cooperate in showing of home when put up for sale
16. Repairs cost more than anticipated 

[Andrew Gavre]

Quote from @Shervin Golgiri:

I would first make sure to run a detail search on property. make sure you're talking to who the owner actually is. second, I check and see how much equity the homeowner has, and if there are any lien on the property. after you gather all that, then you can have an investor friendly agent help you with drafting a contract. so, you can have a contract in hand but also a Lien on the title, to make sure you're getting paid. 

Are you a contractor as well or just funding the project?

 Just funding the project, not a contractor thanks.

[Shervin Golgiri]

It needs alot of Expertise and Experience, and if you have neither I suggest be very cautious.

[Chris Seveney]

Quote from @Andrew Gavre:

I am targeting homeowners with dilapidated homes that need repair and offering to pay for the rehab and split the profits with them at the end of the project after the sale of the home. 

Any idea what this would be called and how to structure it legally? I obviously would want to have control over the property and maybe a pre-determined purchase price?

Thanks in Advance!

 Very high risk. What if they do not sell, or do not like the price they are getting. What if the market does a downturn and their is negative equity. You would really have no control over the property in reality as they are the title holder and most likely a lien in front of yours. You will have pretty much zero control

[Jay Hinrichs]

Quote from @Jonathan Taylor Smith:

I've seen this TV show - just can't remember the name... It is two female Realtors who partner with distressed property owners to get the house rehabbed and sold. They handle the rehab, then sell the property (acting as listing agents), and split the profit with the property owner / seller. From your post it does not sound like you're a licensed agent, but the concept is the same. If I recall, there is also a company offering a similar service.

the TV show is based in the Olympia Tacoma Washington market and the homes are basically dated and just need  mainly cosmetic remodel these are not dilapidated houses.. and in that market these homes sell for 500 to 1 mil.. I have to think the OP is talking about different asset class's than that.

[David Avery]

Having not read any responses but.

If homeowners houseis that bad. 

Get a top notch Agent to list property and tell owner that there items need done.

Your the highly recommended ✋️ handyman. 

Of course they don't have money now

But your money will come from escrow when it closes. 

I've done this several times 

good luck.