Buying a house with a tax lien

[Ryan Cheung]

Hello,

I went to see a home in North Bergen today that is listed as a 3 family home. However, the agent said that it can be legally a 4 unit home, with an additional unit in the basement. This house is at a good price, but when we arrived, the agent mentioned that there is a $66,600 tax lien on the house. What are my options for dealing with this? Would the only solution be coming up with the cash for the lien before I can move forward with the FHA just the price of the home? The following are some of the numbers on the home:

Asking Price: $325,000

Tax Lien: $66,600

Renovation: $50,000

ARV: $480,000

Rental Income

Unit 1: $1,650(Unit I will be living in)
Unit 2: $1,650
Unit 3: $1,100
Unit 4(Unit to be added in the basement): $950

Total Rent: $5,350

Taxes: $11,600

I think that most likely, I will have to pay cash for the lien before we can go forward with the FHA loan on the actual purchase price and rehab of the home. Since I do not have $66,600 in cash for the lien, does anyone have any creative financing strategies that I could potentially use to pay off the lien and purchase the property?

[Jay Hinrichs]

this is where a good RE investor negotiator can really make a deal happen.

first off in the normal course of business  the lien would simply be paid from the sellers proceeds and should no affect you.  So you need to establish if the seller has sufficient equity or cash to pay it as its his debt not yours.

second off you would simply raise the price to cover the lien.. are you looking at a 203k loan ? so that you can also do rehab and your going to move into the property ????

if its investment property you need 20 to 30% down depending on lender.

the other thing you want to find out is what the lien is.. can it be negotiated..

is it ad valorum Tax lien.. is it IRS tax lien  State Tax lien..  Ad Valorum cannot be negotiated but IRS and State in many instances can be..