Liens against property

[James Sinclair]

I am new to the site and new to buying investment property but have a question about the quick offers being discussed. I was going to buy a lot and made an offer on it. During the title search it was revealed that there were back taxes, back home owner fees, and an IRS lien on the property. The owner did not clear these up and I terminated my offer. It seems like some of the all cash offers being discussed don't protect you from title problems. Am I missing something in the discussion? How you make these quick offers without ending up with property that you can't do anything with?

[Rick H.]

Welcome to BP, James.

Don't know your level of sophistication, however it is possible to purchase the equity of a property subject to the liens of record and later make a profit by dealing with and reducing or eliminating those liens by skillful negotiation and application of real estate law.

IRS liens are often discounted. I walked away from my first equity purchase deal that had an IRS Lien and missed an extra $10k profit ($30k in today's dollars) because I was afraid to tackle it. They will usually accept cash discounts (or country line dance lessons) if offered a compromise. Or, some cash to release the lien and allow the debt to remain against the taxpayer but not the subject property?