Co-worker Looking for House. Potential Client?

[Craig Bell]

Hey BP community. I have a co-worker that is starting to look for their first home. They are currently looking for a move-in of August time frame as that is when their current rental lease expires. It came to mind this morning that this could be a potential opportunity to do my first real estate investment via a house flip. I was wondering if anyone had any experience of having co-workers as clients and how it went/what was the arrangement? I haven't talked with him yet, but I was thinking of the options of either doing the traditional flip route where I buy the home, rehab it, then sell it to them or do the "Fixer Upper" on HGTV route where we select the home with them, come up with rehab options, then work our fees into the rehab cost. Either way, they will be involved in the house selection and rehab options as we would be working with them directly. He knows I'm getting into REI so that foundation is already established. They are exploring using an FHA loan as they don't have a lot of money for a down payment. Their range is roughly $180k (he said $200k is their top, but talking more with him, I advised him not to go that high considering what little I know of his financial situation). If I go the route of me buying the home, this would give me several exit strategies if they back out for some reason: sell it to them as planned, use it as a SFR, traditional flip. They're also considering town homes as well.

Anyway, would love to hear your thoughts on methods to go about this with them.