First Deal: The House with Loads of Liens

[Josiah Stacy]

Fresh investor here in the Dayton, Ohio area, trying to land my first deal....

I've been working any source I can to get leads on deals, and the effort is starting to pay off. I'm here to ask about one property in particular, though.

A friend told me about a vacant property across the street from their house. I checked it out. It is a dilapidated house, about 1500 sq ft, 2 beds, 1 bath. County records show that the house had past due taxes at about $3k. I found the owner through Facebook and struck up a conversation. Talk about motivated. The owner was surprised to learn that they even still owned the property. They all but begged me to make it go away.

Sounds good so far, right? Here's were it gets muddy.

The lien on those past due taxes was sold, and with the high rate of interest, that $3k balance was now closer to $18k. On top of that, the owner owes about $32k in child support, and believes there is a lien on the house for that as well. I had the owner call to confirm those balances, and he got back to me stating that the child support enforcement agency told him a buyer wouldn't have to pay up ALL of his child support to get a free and clear title, and that the tax lien company said they'd be willing to settle for a lesser amount.

Please tell me if I'm getting too involved in the deal here, but I'm having trouble letting it go. It is definitely NOT a deal at $50k, as the property needs extensive repairs and the ARV is around $70k. That said, the devil on my shoulder wants me to find out just how low these lien holders are willing to negotiate. The owner has agreed to meet me at the property next week so I can see the condition inside, but I'm expecting around $20k-$30k in repairs (those numbers may be way off as my biggest weakness right now is estimating repair costs), which, using the 70% rule, would allow me a max bid around $15k to account for closing and holding costs (forgot to mention earlier that I'm planning to either rehab or wholesale the property).

The reason I'm posting all this is that I need some help determining when to give up. Do I call the lien holders and try to negotiate lower? Will they even talk to me considering I'm not the owner? What if I get one lien holder to agree, but not the other one?

Any advice any of you can provide will be greatly appreciated. I'm not afraid to call the lien holders up and ask for what I want, and I know I'll plenty of value in the form of education from doing all this, but I don't want to waste too much of my time or the owner's.