Cloudy Title Advice - Seller bought with a Quit Claim Deed

[Brandon Holley]

Hey BP, 

Looking for advice on a deal that I want to buy. 1st the deal specifics then the issue. 

4/2 can be bought for 20k, needs 15k rehab, 2k in back taxes owed, ARV is a conservative 65k . Looking at the house as a long term buy and hold. It'll rent for $800 conservatively.

Now the issue, the seller bought it with a quit claim deed. They are very motivated sellers, so it's possible that I could actually buy the house for 15k. When i had my title co run the title there's an old lean from 99. It appears to be paid for but there's no documentation to prove it and the company that handled the loan is no longer in business. I understand the concept of hiring a lawyer and going through the quiet title process, a month or two and 2k-3k in fees. 

But how can I solve this title problem while keeping myself safe? I'm closing on a house next week, so my cash is tied up in DP and rehab on it. 

I've offered the seller a owner finance deal, where I'd put down 5k deposit and we'd do a 12 month lease to buy deal. During that time I could get the title issue cleared up, rehab done, and get a tenant in. But the seller balked and wanted 10k down...That's not an option or a deal (when I'm pretty sure offering them 15k would buy it outright).

I'm planning on meeting with a Hard Money lender tomorrow, but I'm not sure they'll play ball with a cloudy title. 

 I'd love your feedback and input. Thanks!