Help!! Can I Wholesale Quit Claim Deed?

Question

Hey Guys,

A rehabber called my bandit sign and asked me if  I was interested in a house that he had.
This house is one that he acquired for about 3500 at an auction after paying back taxes of about a 1000. He mention that he just need 4500.

Now... he states that the house went into foreclosure and the bank that was responsible for it went out of business. He says that there has not been bank to take over of the lien. If there is, he cant locate them.

He asked me if wanted to acquire it through a Quit Claim deed.

So what kind of deal is this?
Can I put under contract and assign?
How should I go about it?

Thanks for your input
Demetrus

Ken Ott · Answer

I'm in a similar boat.

A lady in Oregon says her friend (who died) deeded his 12 acres and a mobile home to her via quit claim deed, and that the guy's will is at the courthouse, and she wants fast cash to buy a local rundown hotel to fix it up.

Now it could be a scam, or it could be she's trying to do right by her old friend and do something productive with the cash. She also wants to sell me a 3/1 in town 8 minutes away from this secluded patch of land.

Obviously her name is not on the title for the land/MFD home. It's also not on record for the 3/1. So... hire title company, or what? Not paying a cent until I find out what's real...

Demetrus Gibson · Answer

Thanks BP!

Kevin Kim · Answer

Two things: I don't have all the numbers on this deal but if it can bite you on the back end, stay away. How much is your time worth? 
Second, when in doubt....Run!

Joel Owens · Answer

The fact that he wants money fast and quit claim should say it all.

If he only wants to warrant for the time he owned it in most states you can use a limited warranty deed.Anything before he owned it would not be guaranteed by him.

Even if the seller did guarantee for a limited time he might not have the resources to pay when you go after him.

As stated bank assets just don't DISAPPEAR.They are owned by the FDIC,in a RMBS,CMBS,sold off to another bank etc.

Jon Holdman · Answer

If you really think there might be something here, pay a title company to do a title search and give you a title insurance commitment.  That should find the real story with the ownership.  From what you wrote, this guy bought the house, then lost it to foreclosure.  Or, maybe he thought he bought the house, but didn't and the lender foreclosed.  In either case, it appears he's looking for a sucker to give him some money.

Demetrus Gibson · Answer

Thanks Andy,
That sounds like sound advice...
More potential trouble than potential profit.

Andy B. · Answer

This sounds shady to me.

The problem with a quit claim deed is that it doesn't give any protection.  A quit claim basically says "I'm selling you whatever I own, but I am not stating that I own anything in particular".

So, this guy will sell you whatever he owns (which could be nothing since the bank now owns it).  Also, if the bank is gone, the "assets" of that bank went somewhere - government or another bank or whatever - so they have the rights to the property.

If you want to do the deal, you would need to do a lot of background research to be certain you are actually buying something of value.