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Has anyone here done a turn-key gut rehab on a property they owned free & clear for an end retail Buyer? If so, what are the mechanics of money flow for buying, fixing, etc for the Retail Buyer.
I own a house I bought for peanuts last year, and had planned to eventually rehab in due time.
A prospective Buyer + wife contacted me from New Mexico – they are moving to Texas to pursue a professional degree. Buyer wants to buy with cash, and wants me to design, and fix it for them to live in.
I do not know how I would set up the deal. I have it advertised as an 83k fully rehabbed turn-key project -rehabbed to my sub 100k property finish standards. Do I sell them the property for $83k with all the specs and scope of work defined?
Or do I do a split contract where they pay me upfront for the bare bones property as it is, and the rehabbed price divided up till they eventually close when fully rehabbed? If they want upgrades in the process how will that be handled?Since this is not a turn-key property ( ready to go), it would be better if they pay you cash for what is there now. They own it.
Then, they hire you separately for the design and rehab. Like all rehabs, you should have a scope of work written up. If they want more than what is in the original scope of work, they will need to pay more. Ideally, they pay for materials then just pay you for labor costs. Assuming you will be subbing the whole project out to someone else, that means you will be paid to be the general contractor, get necessary permits and to keep the project flowing smoothly.
WAY too many things can go wrong if you do it any other way.
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