Paying Cash for a Quit Claim Deed in a Wholesale Deal

[Chris Heeren]

So I am attempting to wholesale my first property (It needs a lot of work) and the house also has $10,500 in back taxes from the previous 4 years. I have it under contract for $11,000 and am wholesaling it for $12,900.  We found a buyer willing to pay $1,700 to have us quit claim the deed over to him and he would then pay the back taxes back over time while he fixed the house up this year, knowing that he would need to pay the 2012 taxes immediately so it doesn't go into tax lien foreclosure.  How do I structure this deal? Is it possible to simply have the owner sign a deed over to the buyer and have him pay me $1200 and the owner $500 without a contract in place? Would I need to draft a new contract up stating where the dollars are owed? Could I pay the owner $500 for a quit claim deed, then turn around and Quit Claim the deed over to the next seller for $1,700?  I realize these dollar amounts are tiny but was really just trying to get my first deal under my belt and it ended up going into a world I am not familiar with. Any help on how to structure this would be greatly appreciated!

[Ned Carey]

I would write up a contract detailing who is responsible for paying the taxes, what kind of deed is being transferred, the price and other pertinent details. I would then assign that contract to the end buyer. 

Of course there are many ways to structure the deal. How I would  do it is not necessarily right for you or the laws in your state. Obviously seeking an attorneys advice would be  wise.

I see a number of problems here, not so much for you but mainly for the end buyer. Why a quit claim deed? Why not a stronger deed? When will the deed be recorded?If it is not recorded with full title work before renovation starts, the end buyer is at risk he may be putting money into a property that may have title issues.

 If the deed is not recorded for a long time, the new end buyer is at risk that new debt against the property or judgements against the owner will come up.