Making an offer to a bank on short sale with sheriffs sale near

[Matthew Hall]

I'm looking to purchase a foreclosure as my primary residence as it has a studio apartment over the garage that I should be able to get $1500 a month from while renting my current home for $2000 a month, which would result in a net income of $1185 a month (subtracting the mortgage on my current home).  The home is an attempted flip that wasn't totally finished/was poorly executed.  The exterior is finished and just needs cosmetics-the interior needs a bathroom finished (tile and rough plumbing are there-just needs a toilet, fixtures, etc...) and all appliances in the kitchen (brand new cabinets were installed, etc...). The kitchen and bathroom in the studio apartment also needs fixtures and appliances.  The rest (flooring, paint, new windows, heating system, etc...) is all there. 

HOWEVER, the bank maintains that they have no knowledge of the septic system and that as far as they know it is working fine.  I have evidence to contrary that I'm working on compiling.  Neighbors have submitted formal complaints to the county health department that were investigated and I've submitted public records access requests to the county to get the entire file.  What I suspect is that it is a 3 bedroom system (main house has 3 bedrooms) and that somewhere along the way the 4th bedroom (studio apartment) was illegally connected to it, overloading the system causing excessive odor and runoff. Basically what I hope to do is get the bank to accept my low offer by presenting evidence that this property is definitely going to need a $30-40K septic system.  I am in the process of getting estimates from an engineer, but I'd love to hear some tips from folks who have negotiated with banks in this manner before.  Lis Pendens was filed on this property back in May 2014 and I don't think that the property owner is contesting, so if it doesn't sell soon (it's been on the market just over 200 days) it is likely to go to Sheriff's sale early next year. 

The property is listed with an agent who doesn't seem to know much about it-the lender is Greentree.  I called them and they basically have a recording that says if you want to purchase one of their properties to work through the agent.  From talking to her though, it seems as though she's unmotivated to do anything with the property and is resigned to let it go to sheriff's sale.