Ways to profit from an encroachment?

[Duncan Park]

Hi,

I found an REO that has a unique problem and I smell opportunity. I am trying to see if I can profit either by solving the problem myself, use the problem as a leverage to make a low-ball offer, or do both.

Situation:

-A single family home is sitting on a small lot (sub-divided within last 20 years).  

-There is a driveway between this improvement and the neighboring house, and the space between the 2 buildings is the width of this driveway (~1 car width).  

-The property line appears to line up with the driveway from the road to the backyard (actually, it is paved and used as parking area) and then bends outwards (~15 deg) toward the neighbor.

-The neighbor uses this parking area to park his/her vehicle --> encroachment for sure.

-The neighbor has no other place to park (the road these 2 houses are on is a 35-mile/hr state road w/ no shoulder), the only way to get to the back of the house is via this shared driveway.

Possible opportunity (<-- this I am trying vet in this forum.  Your opinions and suggestions are greatly appreciated):

1. First make an offer matching the asking price with a clause ... "subject to  verifying survey and encroachment."  2. Then come back and make a low ball offer with a clause "subject to seller resolving the encroachment issue with the neighbor."  3. When the seller rejects, make another low ball offer with the previous clause removed.  <-- maybe the bank will be happy to get rid of this property at this point???

4. after completing the transition, negotiate with the neighbor on: 1) selling the parking space, or 2) renting the parking space.

This is NJ.  If there is any attorney out there who has a strategy to deal with this, please contact me.  

Thanks!