Pre - tax foreclosure

[Justine Murphy]

Hello all,

I was approached by a third party to lend 30000 to a guy to pay his taxes for house that has no loan and is worth 150k. Using the house as collateral. It is up for tax foreclosure auction about 35 days from now in nys. I told a couple of investors and they told me be very careful with nys equity theft prevention act, dode frank  and sec. 

I got in touch with the owner and  I told him I was not interested in a loan but would be looking to purchase the real estate to keep as a rental. He was interested, I told him with such little time I didn't want to limit his opportunities so I would be frank.  I told him I could only pay 60-70 percent of after repair value and asked if he still wanted to meet. He was still interested. Is there any laws or rules that I should be aware of. I am running comps and did a drive by, it seems to need love but might be promising.  I have bought 4 rental in last 2 years but all with normal circumstances. I don't want to do anything that can hurt my future or my reputation.   Thoughts.  What am I missing????

I thank you all in advance for any help