Rehab with owner while he keeps title and then profit split

[Jimmy H.]

BP community,

I am currently working on a deal which the owner is a lot more interested in keeping the property (instead of selling as-is), and JV with me to rehab it and then split the profits after sale. A realistic ARV is at $500K - $525K or more, and rehab costs to get to that ARV is in the range of 75K-100K. I've already proposed to:

1.)  Buy it as-is for 325K so he'll be done with it and not having to worry about all the repairs and sale and the funds and risks associated, but he is most interested in partnering up and split the profit

2.)  For the option to profit split, I've proposed to have him owner-finance to me at the same 325K and take back a note for the deed as collateral, no interests and payments for 6 months while it is going under renovations and resale, and then profit split after

3.) His desire now is to keep the property without selling or transferring title to me and just JV with me to get it rehabbed and sell for profit splits.

I think he is steadfast in doing this deal according to No. 3 above.  Assuming that the numbers are agreeable and all contingencies (financially) are accounted for, what are the downsides of not having title to the property while doing the rehab?  Obviously a mechanical lien, or something similar, will be filed to protect my interest .... but I would like to know from the BP community if there are other things that I will need to consider in order for this to be mutually beneficial.