(see below)At the same time, I have been working with the Bank (note holder) on purchasing the note, at discount.

This is my potential first deal: Owner has a lien on property of 19k (owner financed) Lien Holder never received mortgage payment from buyer.

I get the following:* Contracting License (and I look it up in the online database)* EPA RRP credentials (for pre-1978 construction) - and verify with lookup online* W9 IRS form (so that they can get 1099 in January, and they are told that will happen)* Liability insurance proof - with me and my company named as certificate holders or additional insured* Workmen's compensation insurance proof - with me and my company named as certificate holders or additional insured* An actual street address for them (not just a P.O. box like some will only give out)* A list of customer references that can be contacted (not that I expect that anybody in this list will be saying bad things)* I go to visit actual job sites, preferably at least one in progress and at least one that is completed - to check for workmanship and tidiness of the job site.I also check the state website for criminal search, to see if they have a record.

I am surprised a tax lien hasn't been already sold off for those years.The money is owed to the tax lien certificate holders.The city and county needs the money to function each year for the tax revenue.So they sell of the tax certs to get money today.A guaranteed return is then given to the tax certificate holder so there is no negotiation on the balance.After a certain time they can file for a foreclosure tax deed.Things do vary by state in how they operate with tax deeds/certs etc. so your state might have some quirky rules and regs.First see if the property is in the city limits and if not you are just dealing with the county taxes.

The outstanding note balance is $235k and the accepted price with the note holder is $200k (84 cents on the dollar).

If you are going to foreclose as a note holder, there are all kinds of technical landmines.

A junior lien holder was not notified of the upcoming foreclosure sale!

And the holder in due course could be eliminated because 1st merged with original originating lender/servicer?

Traditional "Guru" training teaches that second mortgage holders will be happy with a pay-off 10% of loan amount.

When they go bad, shareholders and unsecured debt holders go frist, plus anyone with over 100,000 in the account, 50 cents on the doolar is the going offerProblem is the FDIC is about of cashGood old CASH FLOWING REAL ESTATE is the way to go right now