Came up with a JV idea to bring to seller. Would love feedback

[Cam Harris]

The numbers:

3 BR/1.5 BA SFH in good neighborhood with an in-ground pool

Sale price: $80K

Estimates renovation costs: $35K

ARV: $175K to $185K

Essentially the owner is an older gentlemen who was working on getting the property renovated but health issues have prevented him from putting the time and work into it. If he can’t sell the home in the next 30 days, he’s just going to sit on it for another year and see if his health has improved then.

I got into wholesaling as a side hustle to help pay off student loans faster (which has been a success!) but because the income generated was going directly into an obligation, I don't currently have the cash on hand to cover a down payment for a hard money loan. On the flip side, because the feds haven't reported my student loan payments yet, I don't have the credit score to qualify for an FHA loan.

I still want to get in on this deal because it is such an opportunity though.

My idea is to approach the seller again and offer a joint venture where we leverage the home to secure a renovation line of credit. At that point, I would oversee the renovation and do much of the work myself (this home is about 30 min from where I currently live). When the home sales, we split the proceeds 60/40. This would net him approximately $105K (more than he would receive now) and leave me with $70K. I would also cover the line of credit and interest. So I would net somewhere around $30K (significantly more than simply wholesaling the property and roughly the same as a fix and flip if I were to get a hard money loan but without the down payment)

I expect the time to market to be approximately 6 months.

Would love feedback from some of the more experienced investors.