The previous owner should be responsible for taxes accrued so far this year.

Didn't think I'd ever see such gains in value or accrue such huge amounts of accumulated depreciation that I'd need to go through the hassles of an exchange.  

Additionally, they get their money back and the interest accrued at the end.The benefit that I get out of doing this is that I have less money into the deals which allows us to do more deals at the same time.  

@Jeremy Knox You are bidding for a tax lien.One of the links you provided said interest accrues at 1 2/3 % per month.

I've had many PA tenant who go beyond 2 years.Many banks will set up subaccounts, one for each tenant with interest paid to the tenants SSN and you control the account until the tenant moves on.You must refund the tenants security deposit within 30 days for them leaving or provide a detailed charge list against the security deposit and the interest accrued.The banks set up these accounts for free and the interest which accrues to the tenant is very small in todays economy something like 0.25% interest per year. 

Property taxes accrue, and since most private (non-bank) lenders don't escrow insurance and taxes, that can add thousands to the bill.

So I would recommend looking at private investors at the outset on the equity side, that way you do not have the ticking clock of debt payments (although you could let interest accrue and pay on the back end if you can get someone/lender to go for that).

There are many ways to accrue that seed capital, but you are limited only by the viability of your investment on paper.

If that is the case and since interest accrues on the outstanding principal amount each period, interest expense will be significantly higher.

They must pay all the taxes that accrue over this three year period.