Flip a contract for deed house

[Rodney Thompson]

I have a person that is in a house on a contract for deed that needs to sell the house. The contract cannot be assigned to another person. I would like to avoid buying the house outright before flipping it, so here's my creative flip that I'm looking for input on.

What I'm thinking of proposing to the current owner is that he retain possession of the house, and we remodel the house and get it ready to sell. I have a lawyer draft an agreement that spells out our interest in the house and what gets paid from the proceeds and to whom. I also have a real estate attorney put a second lien on the house to protect me in case everything goes bad, and he tries to avoid his obligation to my investment.

Has anyone ever done something like this before, and could you tell me about how it went? Or, does anyone have any advice one way or another?

Thanks!