Advice on Buying Property Secured by Tax Lien

[J Scott]

Would love some advice from the experts here...

Someone approached me with an offer to sell me a property -- he doesn't actually own the property yet -- he purchased the tax lien and has the intention of foreclosing (this is in Maryland, btw). The deal is reasonable and I'd be interested in purchasing the property secured by the lien, and he has offered two scenarios:

1. We agree to a purchase price and I'll pay him a few thousand dollars upfront to cover his costs to foreclose, then once he successfully forecloses and takes title, I pay the remainder of the purchase price and take title to the property.

2. We agree to a purchase price, I pay him something upfront, get the lien and it's my responsibility to foreclose, after which I pay the difference in the purchase price. We haven't determined the upfront amount, but I assume he wants as much as possible and I just want to make sure I don't lose any money.

Now, I'm no expert, but I see potential issues with both scenarios...specifically if neither of us is able to actually take title after the foreclosure process.

So, I'm looking for suggestions on how to handle this in an equitable fashion such that neither side gets screwed should something atypical happen (like a redemption or purchase at auction by a third party).

Any suggestions are great appreciated!

[Bill Gulley]

Why don't you dig up the owner who didn't pay taxes on the property, maybe there was a reason he didn't pay, like the lack of money, make him an offer, redeem the tax lien and move on? Might give your tax lien guy something for his efforts too. I'd try that first. :)