[As an aside, Gary & Chad, these sorts of questions arise frequently enough that I'm toying with the idea of creating a sticky thread or a series of blog posts covering the various aspects.  

i've toyed with the idea, but for now I will just pick them up at the tax sale

Those were the other aspects I was referring to yes but:With the idea of the "principal being paid off":  You slowly begin losing more and more leverage in the property as you pay down the principal.           

My wife and I are only "toying" with selling simply because we'll be travelling at least 2-4 months out of the year soon and might be more comfy with cash in bank vs. lots of pipes, boilers and tenants. 

After our conversation I'm wondering if I should even make him an offer or if he is just toying with me.

If nothing else, it is a cool little toy to play with -- check it out:The Secrets of Street Names and Home Values

The only thing I'm toying around with now is (assuming the seller agrees) to try to negotiate a purchase price a bit higher.

I've heard of kids flushing toys down the toilet. 

If anyone is interested, I can give you the addresses of some places in Cape May that could be a good opportunity for an investor willing to do a full rehab.Someday I'll have a place in FL, and hopefully, spend a good bit of the year there, but if I'm honest, it'll be a toy, not an investment.

Today I received the keys toy first property.