Creative Strategies for Purchasing a Property with Existing Lien

[Ashley L Smith-Jackson]

I can't believe I am "that guy", or in this case "that girl", who rehabbed a property before closing, smh!

Please help me problem solve this situation. In sum, I intended to purchase the property in cash from a wholesaler. He assured us that the title was clear. We insisted on title search but began rehab. Mid-rehab he told us that liens were found but were in the process of being released. At the end of rehab, we still had not closed. I found out that one lien would require a 33k payoff which is way more than the property is worth. Obviously, I've already rehabbed the property to rent it so I can't just walk away. What are my best options to close with the lien situation?

I am considering owner-finance where I pay the seller cash upfront and just $12/year for a "mortgage" so that the title is not transferred so liens are not called.

I am also considering quit-claiming the property then placing a 1st position lien on the property myself and then foreclosing on myself to wipe-out the other liens.

I've done wholesaling so I can get pretty creative in finding solutions but I am too emotionally involved to make a logical decision (and 7 months pregnant) AND I've only wholesaled in Texas, not in Ohio, so I'm not as familiar with their laws.

I need help thinking this one through!