You could make an offer contingent on seller providing notice to terminate to tenant((I wouldn't endorse doing this though), or you could offer to buyout the tenant and just eat the initial loss upfront.

That's 432,000 gross annually - but that $3m at just 6% is eating up $180,000 of that, not to mention your equity partners are chomping at the bit for their returns.

Buy and hold can be tough in South Jersey, especially in towns with good school districts, because the high taxes often eat up your rental income.

"How do you eat an elephant?  

Where should I eat?

I would hate to purchase a tax deed and find out that there are back taxes, or its inhabitable, and other unknowns that will eat up my start up money.  

If it isn't possible, go with hard money, but keep it short term or the interest costs will eat your equity FAST.

If you are in a tight margin market, then the thousands of dollars in extra closing costs and interest will eat your margins. 

Some investors by in the lower-income C- areas which looks good on paper in terms of cash flow and rates of return but the tenant turnover is high and the cost eats up your cash flow.Another similar market you may want to consider is Kamsas City, Missouri.  

@David Rosenberg Yes, the high property tax does eat up cash flow.