Pre-selling to end buyer using renovation loans

[Nick O.]

I have a lot of buyers who love my house designs. Trying to come up with some other options to lock them in upfront and reduce my risk. Was thinking this strategy may work Step 1. Tie up a house that fits criteria 2. Come up with the design and plans 3. Have my GC put together an estimate 4. Get an after repair appraisal 5. Sell the house to my end buyer who gets a renovation loan and make some money on the front end 6. Collect the rest of my profit either from the GC as the designer or as a separate line item on the bid.

My biggest concern is if I usually clear $80k-$100k per house how to fit that into the equation without causing red flags for the bank. Also would want to make sure I get paid and if something happens to the GC I'm protected. Any ideas would be greatly appreciated. 

[Aaron McGinnis]

We're working this same strategy, but with new construction. 

Our marketing plan hinges on detailed design work and pre-planning, and selling the customer a package 'ready to go' with little or not customization. 

The feedback I've heard from others who do this is when your end buyer has an expectation that X or Y is happening, and then something else happens. Little things like fixtures, colors, etc. become a big deal.