Is it possible to find an investor who would want to invest in renovating a rental property, without taking an interest in the property itself, but would expect returns when the property is sold at a later date? If so, what type of contract would that require, and where would one find such an investor?

This is a family property, still owned by elderly family members with dementia who have moved out (to assisted living) and are unable to move back in due to serious limitations in their ability to care for themselves. (There is a DPOA in place.)

The property needs significant renovations. The family would not be looking for a co-owner in the property, just someone who might want to invest around $20K and get something more than that back at a later date, with the amount and timing to be determined by mutual agreement (presuming a growing market value for the property.)

Would this be considered a viable type of investment, assuming the home and area are basically good enough to continue building value once the renovations are completed? If not, what other sources of funds might there be for doing these necessary renovations in order to make the property viable as a decent rental? (The contemplated renovations are not cosmetic, as the house had deteriorated somewhat prior to the elders moving out; new roofing, new deck, new garage door, take out a wheelchair ramp, etc.)

Thanks in advance, and I hope this is a useful question for the community. It's one that I've not been able to find much information on, but I'm sure this situation is not unique.

  • 3
    Why not just get a loan? I'm not sure it's reasonable to expect to find an "investor" who will accept being excluded from equity, decision making and repayment until some unknown date in the future when the property sells.
    – quid
    Commented Apr 17, 2017 at 22:33
  • Why wouldn't a home equity loan work? Why make it a rental rather than just sell it? Are you sure that $20K covers your needs?
    – Brythan
    Commented Apr 17, 2017 at 22:33
  • 1
    How is a HELOC too complex?
    – quid
    Commented Apr 18, 2017 at 5:25
  • 1
    Talk to the bank to see of the DPOA is enough to get a loan on their behalf. In any case, ethically you are to be acting in their best interest, meaning do you believe that they would do such a deal if they were of sound mind? That's not a question any of us can answer.
    – D Stanley
    Commented Apr 18, 2017 at 14:12
  • 1
    Are there other family members that have an interest in the property? Have you talked to them to see if they are in agreement on what needs to be done?Could you get enough cash between them to do this without having to deal with a loan?
    – D Stanley
    Commented Apr 18, 2017 at 14:13

1 Answer 1


The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted.

You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment?

Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever.

If you approached me with this "investment", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned:

  • take out a wheelchair ramp

That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this?

  • new deck

A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this?

  • new garage door

2K? Why does money need to be borrowed for this?

  • new roofing

This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult.

So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.

  • Hi Pete, good points and I'm sure that would all be feasible if any of the family were (a) at all handy and (b) had the resources to buy materials. As for why the family doesn't have the spare cash, basically all the money that could be spared has gone either to the mortgage company or the ALF (which is mostly covered by a long term care policy, but not entirely.) Thanks for your suggestions, for sure. I'll give it all some thought. (To answer another question, the total dollar amount was based on the quotes the family received from various builders. The re-roofing alone was quoted at $9,000.)
    – Anon
    Commented Apr 18, 2017 at 22:16

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