Here is an idea that I have not tested, but may be workable. Have the owner of an abandoned home donate the home to a non-profit organization that you have an agreement to share profits with. Then arrange for 100% financing to fix-up the home. (A great LTV with no other liens on the property should make for easy financing.)
Then you quickly sell the property slightly below fair market value and split the profit with the organization. The owner of the property gets a tax write off, the organization gets a contribution, and you get a nice piece of change without cash layout.
I am currently negotiating with a non-profit organization in my area to structure such a program. One problem is that board of directors have to be involved in deciding on any new program, and they are so SLOOOOOW.
This organization has been offered a couple of homes for free already and turned them down because the owner owed two years of real estate taxes ($3,000)! Perhaps there is a way to set it up so that the grantor is given a tax write off the after fix-up value? In my proposal to them, the non-profit takes title to property and lease options to us.
Using Bill Bronchick’s suggestions, the non-profit mortgages the property for repair costs; we supervise the repairs and exercise the option at the time we find a buyer.
Look in the yellow pages under not-for-profit organizations. There are hundreds here in Florida. And as for abandoned houses–probably in the thousands. Looking forward to Joe Kaiser’s article on how to find the owners. [Ten Ways to Find Owners of Vacant Property]
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