Fix & List Strategy Questions

[Chris Mooney]

Hey all!

I recently just learned about the "fix and list" strategy. To my understanding, this is where a rehabber would agree to a price with a seller, then cover all of the rehab costs, and when the home is listed for top dollar in the future, the rehabber recoups their expenditures, and then splits the profit with the seller. This avoids having to pay closing and legal costs on the front end. So in theory, for $40,000 into a rehab (or any random number for example) the rehabber can double their money, or earn a pretty profit on the backend. 

Has anyone tried this strategy or something like this? Is there another name for this? Does this sound like a good offer to a rehabber? 

I'm a wholesaler, and trying to figure out a way to close more deals, while putting more money in the seller's pocket, while still providing value to end buyers.

Thanks in advance!

Chris