How Do I Structure This Deal?

[David Nacco]

Hey everyone I need some advice on how to structure this flip... so I’m a realtor and have a distressed seller who has a house they need to get rid of. It would make a great flip but I don’t have the liquidity right now to buy the house and flip it and I don’t want to wholesale it. Listing it wouldn’t make sense for them because they are under water on their loan so they won’t net enough to pay it off and they can not come out of pocket. I do have the ability to get a hard money loan for the rehab and would like to present them with the option of allowing me to flip their house which would net them enough money to pay off their loan and just move on from their situation. How would you guys recommend structuring a deal like this?

My main concern here is me rehabbing the place and they basically just say well screw you I’m keeping it now and not paying you for those rehab costs. How would you guys recommend securing my interest in the property while still protecting the seller as well where they know if I don’t come through for them then their money and home is safe. (Not that I wouldn’t but I always want all parties protected fairly and equally)