Seller Said "You Can Have It For Free" ... ok whats the catch?

[Jacob Howell]

Yesterday morning (Dec 16th 2015) I received a voicemail message from a guy who received one of my postcards that asked to buy his vacant property in Pittsburgh Pennsylvania. After work, I was able to catch up with the owner over the phone. I asked him the typical questions and he answers saying that its vacant, 4 bedrooms, 2 baths, he used to live there and also told me about how much the next door neighbor was such a B-word. In general he explained how much of a headache the property is for him. Since he lives hours away and is 80+ years old he tells me that he can no longer afford to waste time and money maintaining or responding to complaints. He informs me that he did not think he owned the property since he filed for bankruptcy 6 years ago. However, property records and citation letters clear identify him as the owner. 

After he tells me more about his past life in the property and how the neighbors kid broke in to steal all of his guns, equipment and a safe; i asked him the million dollar question. HOW MUCH DO YOU WANT FOR THE PROPERTY?. He said "I dont want anything, I just want to be done with it". I thought I was hearing him wrong... I asked again SORRY I DONT THINK I HEARD YOU RIGHT, HOW MUCH? He confirmed saying " I don't want a nickle for it, you can have it" I was blown away. We talked for about an hour while I would ask him again about the price and he confirmed the same thing "Nothing". 

As you can imagine i was excited and surely knew this may be to good to be true. So I assured him I would find out the next day about any liens or foreclosures on the property. Today, I had a friend on mine do a title search for the property. There were no foreclosures but there are multiple liens summing up to around 20K.   

Property Info: 4 beds, 2 baths, 1600 sqft, 

The property ARV: ~114,000

Delinquent Taxes: ~20,000

Question 1 - Is there any way to get property transferred to my name without paying the taxes upfront? You know, gaining title, then having a payment plan to pay off taxes per month and maybe balloon payment after rehab and pulling equity?

Question 2 - I found this property because I am looking to wholesale, but I am keeping my eye out for home runs like this. If I get this property for free without paying taxes up front I will do rehab and flip myself. If not then i will attempt to wholesale for 25k to an investor. Does anyone have any experience wholesaling a property with tax liens? 

I have not inspected the property to determine the repair cost. Will do that tomorrow. 

Any advice on this would be helpful and much appreciated. 

Pittsburgh, Pennsylvania, PA, Tax Liens, Wholesale, 

[JD Martin]

I agree with Wayne - there is a mortgage somewhere, unless this place needs $100k in rehab to be worth $114k ARV. BK in Pennsylvania isn't going to leave that kind of equity in place; the house would/should have been sold to access all that equity.

My hunch is that if you do a thorough title search you are going to find there's negative equity in this place by the time you add in the delinquent taxes. Your friend that did the title search - does he offer title insurance and is part of/owns a title agency? If you do anything, you better make sure you get title insurance, or you could be the next bankruptcy!

It's certainly possible that there's this big box of cash sitting there - nothing is impossible - but I find this quite unlikely. The guy was cognizant enough to file for bankruptcy, so he probably knows something you don't, i.e. that there wasn't enough equity to satisfy the mortgage and get around the federal bankruptcy laws for homestead.