Deal structure on flip

[John K.]

hello all,

I have been reading bigger pockets for many years but this will be my first post. Thank you in advance for your help/advice!

Background of deal:

A local business man that doesn't have much time has purchased a house at auction. He had a falling out with his contractor and now has a half completed project. I believe he purchased this property to take advantage of a 1031 exchange, but he is just to busy and doesn't want another project on his plate, so he has offered to sale the property for 70k.

We spoke and he is willing to keep his money invested in the property and finance the remaining repairs. I think 1. he will put off having to find another property to roll his proceeds into to avoid paying taxes from the 1031, and 2. he would get a small return on his investment. This option looks appealing to me since I will not have to put any money into the deal.

Numbers:

ARV: 125-135,000

Repairs: $25,000 - $30,000

Purchase Price: 70,000

Seller requested proceeds: 5,000

I obviously can purchase this property, but I don't mind giving up 15% of my profit to have $0 of my money invested. My concern is how to structure this deal so that I am not acting as a contractor since I am not licensed along with protecting my interest. I have scheduled a meeting with an attorney to draw up a contract but would like any advice would be greatly appreciated!

Thanks again,

John