First off yes I am a newbie...lol
I came across a "deal" today and need some advice.
This home was purchased as a tax deed sale by the current owner and she says "tax deed property in need of rehab, sold as is with ownership transferred by a Quit Claim Deed."
Now this is a A-frame house 2bd/1bth with an addition on one side, and is less than 1000sq ft and built in the mid 60's From the few pictures I have seen,it needs complete interior rehab. Less than an acre so no real value in the land in that area. Roof looks good from the pictures I have seen. The home is an hour and a half away so not going to waste time and money looking in person unless someone here can give me the "green light"
My problem is this...how do you run comps on an A-frame, in a tiny town in central Florida? There is really nothing to compare it too. She is asking $6K and from searching records it looks as if she got the home for $4100.
Also what pitfalls could I run into with this Quit Claim deed, I am brand new to wholesaling and have made decent progress but have yet to close a deal. Is this something I should even think of pursuing? Do not expect to make much on this at all but would it be worth it for experience? Will I even be able to actually find an end buyer and close?
Thanks for the much needed advice!
A quit claim deed means that she is only selling you her rights to the property. If there are any liens on the property then you get those with the property.
Tax lien sales and how they effect existing liens varies from state to state. But people who don't pay their taxes do accumulate other liens. There were probably other liens. Only a title search by a professional will tell you what liens you also get with the property.
I buy property with other liens all the time. The issue is what it will take to clear the liens and get insurable title, and whether its worth it. Only a good title company can tell you. One familiar tax liens and distressed property. Do not close until you have a title BINDER, which means the title company has committed to sell you insurance on the property.
Honestly, this one looks a little complicated. I surround myself with experience local experts with a range of specific relevant expertise. On this one, I would be consulting my lawyer, my title company, my contractor and a realtor with a huge amount of experience with distressed properties and the specific market you are in.
And I don't wholesale. By the time you do all the stuff I would do on this deal to mitigate risk, you've spent significant money, which is not part of the wholesaling lifestyle. I don't know that wholesalers invest in title insurance, for example.
@Katharine Chartrand ... Thanks so much for this information, I do not see much money in this property anyway, think I will just pass. I have learned so much here on BP...but have a long,long way to go.
To get clear title after a Florida tax deed sale, you have to do a Quiet Title action. Takes about 4-6 mo.s depending on the county, and about $2k, if there aren't a lot of lien holders. Also certain muni/govt liens remain with the property. If in the quiet title process some lien holder can show they didn't receive proper notice, they can redeem, by reimbursing the actual buyer at the tax deed auction. Another potential problem is if the buyer you're dealing with has any judgments in the name used to buy the property, those judgments are now attached to the property.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.