How to purchase property from owner w/ existing liens. (Michigan)

[Adam Heseltine]

I have an off market property that I have been working with the owner for the past year. The property was left in her name when her father passed away. He had several liens against the property that she has been able to clear up, however a few still remain. I have negotiated the aquisition of the property for 80K (worth around 130K). I have been acting as a property manager for her and been able to get this property rented and cash flowing. I want to purchase this property and keep as a rental (fantastic area, everything updated). I have a few things going against me right now & I want to get creative in order to aquire this property: 1. Currently finishing a large rehab project and leveraged a lot of my own credit in the past 24 months. My credit dropped from 720 down to 615 (debt / income, no late payments). 2. I do not have 80K cash to purchase this property so I need to find a way to finance this, however my concern is my credit will not allow me to do so. I have about 25K that i could be toward it (equity from an existing rental) 3. Would a lender be ok with a property with liens against the title; my guess would be no. Please let me know what other information is needed & what options i may have? Thank you very much!!!!

[Joshua B.]

Your instincts are correct - you're not going to be able to get a loan on this property from just about any lender if there are liens on the property (presumably tax-related). I would take her statement that they've been "cleared up" with a grain of salt. But if you are confident that she's correct, why don't you just make clean tile a condition to closing? If she's right then it's all good. If she's wrong then you're not making a mistake.

Feel free to reach out. I'm a RE attorney and deal with title issues with some frequency.