NEED EXPERTISE PLEASE! TAX DEED SALE!

[Daniel Miller]

I am currently under contract with an individual who purchased a property, via Florida Tax Deed Sale, less than three months ago.

I have looked up the county records and he did actually purchase it from the county. I just received an e-mail back from the title company stating that they cannot grant title insurance on the property because he has not filed a suit to quiet title. He can either file the suit to quiet title or wait four years to make this property eligible for title insurance.

I am having one of my friends (a woman at a closing agency) dig into this and see if there are any existing liens, encumberances, etc.

He does not want to do that. Also, he will only sell through a Special Warranty Deed. I understand that MORE THAN LIKELY everything would work out but I am not willing to take that chance.

What would your next move be? I want the property and am willing to work with the seller.

Should I go through and purchase the property and file a suit to quiet title myself (I will take $5,000 off the purchase price or negotiate something like that)

Should I attempt to force the gentleman selling the property to file a suit to quiet title?

I am uncomfortable because I have no recourse against anyone who owned the property before this previous seller.

[Daniel Miller]

FINAL UPDATE

I closed on my first property yesterday. The property that was the subject of this thread was the one I purchased. It was stripped of all encumbrances and liens and I received a full title commitment from Stewart Title Guaranty (A publicly traded real estate services company).

Super happy about this deal. The purchase price was for $144,000 and I brought $141,000 to the table. The loan is basically being treated like an equity line at a rate of 7% annually.

The subject property is on a well-traveled and densely populated area. The parcel measures 12,200 square feet or a little over a quarter acre. It's a large corner on a road that sees 15,000 cars on a daily basis. (Renting this property, upon some cosmetic touch-ups, should be no problem. I love rental properties on highly traveled roads. You do not have to advertise online if you post a sign.) One building is a two-story, masonry bottom, frame top 4 unit apartment complex. There are three 1bds (two large) and 1 studio. The property also contains a two-car garage and a single family, wood frame, 1000 square foot home.

Breakdown:

Price $141,000

4 Apartments (2@650, 1@575, 1@500), 1 SFH (850)

Gross Rents - $38,700 - 8% Vacancy = $35,604

Expenses - RE Tax ($2800) Maint ($3000) Reserves ($1500) Utilites ($2400) Property Mgmt. @ 7% ($2492.8) LawnCare ($833.33) Misc. ($500)

TOTAL - $13,526.13 NET INCOME - $22,077.87

Cap Rate - 15.3%

I made an offer on this property in January of 2012. The offer never came of anything and the property got lost in either the bank or county's system. The tax deed sale sorted out the whole process.