Joint Venture with Homeowners

[Nghi Le]

I've had some friends and family members take interest in what we do (flipping), and they said that when they sell their home, they want us to remodel it so they can get top dollar and they're willing to share the profit.

How would you structure something like this?

Even with strangers, distressed homeowners, etc, it seems like a win-win. There's less fees involved because you're only closing once (since you don't need to "buy"). And there's almost no loan fees/points/interest because again, you don't need to borrow money to buy the property. So there's less cash investment (no down payment), more profits overall, and higher ROI.

Why doesn't everyone try to pursue this route?  The only thing I can think of is that getting the homeowner to agree with it may be hard, and of course, agreeing on what rehab to do throughout the entire process might be a headache.  But are there any rules that would prevent an investor from JVing with a homeowner?