Option to buy vs. Quit Claim Deeds
Hi I am new to the real estate game but I have a fair amount of common sense. I have the chance to buy a 3 bedroom two bath row house in a very desirable neighborhood in washington d.c. the problem s that there has a sewage lein on thhe property for 3,000 dollars from the city and I don't think the title will clear. I was thinking should I option the property and sell my option to some one else. The house needs major work, the couple owes 140,000 for their mortgage lets say 147,000 altogether including closing fees etc. I propose they sell the house for 160,000. Thats what I want to lock my option in as. And I figure I can get 10,000 to 15,000 for my option for the price of the contract. How should I package this deal so that everyone is compensated even though the sewage lien doesn't make the title markertable. Should I sign a contract with the property as is put a couple of weasel clauses in the contract and make it assumable. 
what's the FMV for houses in that area? if you're going to be asking 10-15k for your option, is there going to be enough left on the table for a rehabber to make some good $$$$?
I am seeing houses in that area code with similar features going from anywhere between 256,000 to 300,000 dollars this is washington d.c. and the prices are crazy. in this area code 20011 the house needs some work but people want location to live in not necessarily a sound investments.
What about the sewage lien how do I get by this hurdle.
let me rephrase that 220,000 to 300,000
dollars
is that the only lein? if so, is everything ok with the sewage/septic system with the house, i'm not a rehabber but i know of rehabbers who stay away from septic problems........i'm sure there are some out there who would be willing to work through it... do you have any investors in mind who would want this property?
So Based on the information you have which method would you use
A) sign an option to buy the house for 170,000 or would you quick claim deed the property or subject to: or what ever exotic real estate techniques people use to do these types of deals.
And yes I do and don't have any investors for this house. I mean this is D.C. ONE ad in the paper and its gone its all in how you market it.
bigdredd,
Glad to meet you.
If your are sure the property will sell as you seem to be buy your post, then I would have the seller sign a Offer & Acceptance Agreement, with the proper due diligence clauses listed in the Agreement and the terms of the deal.
I would buy under what ever name you are going to use with the standard 'Bigdredd/and or Assignees's'. This way you can go any exotic way you want to.
Welcome on board this board, good investing on this one.
John $Cash$ Locke
Hello Bigdredd, before I put out any money on this deal, I would visit the code enforcement office and see if the property can even be sold in its current state of repair. The thing about title search is that is does not run a code violation search. Do this before you make any dreams of spending that extra 10k.
definitely tie this one up fast and assign or double close with another investor and/or retail buyer......
i would put the ad in the paper
"Desperate to Seel!!!!
fixer upper
blah, blah
170k or best offer"
give the details in the ad and see who comes the fastest......start off with a high offer, higher than what you would really want to make, to make the buyer think he got you to take less than what you wanted...(they think they got a steal, "honey, i got this guy to lower 10k of his price!!!" )
see how it goes, let us know
CAn't I just sell my option contract if I put in the contract that this agreement is assumable then I wouldn't be subject to taxes because i didn't excersie the option I just sold the contract.