I second @John Rooster's reply, but @Scott VandenBerg please share the seeds of this excellent idea.

Legally would the tax sale supper seed any judgments against the property?

Used a 43k HELOC to seed my investing and haven't looked back.

I could have possibly added value to the property by clearing, fencing, and seeding the land as well as building a small barn but that is a large cash outlay for what would have most likely been a pretty meager profit.

These you hold after you have built enough seed capital and it will not impair your capacity to rehab.  

We have access to deal financing.We are seeking operating capital, or seed capital that can be used for a small operating budget.  

I planted the seed of a "subject to" to give him something to consider. 

I think the neighborhood bad seed will soon be removed, but still this late-paying tenant of mine is not a viable candidate.

Maybe you will get lucky and sell a house or two, and have some seed capital.

Good day,When you say you have a few lates, banks should still work with you, but you will pay a higher cost for the loan and/or need more down.What it sounds like is that your Debt to Income is high and that is the issue.Refinancing the multifamily that you are going to rent can use the rental contracts for the income, but you usually get 75% of the actual lease value.Once you have contracts you can probably cash out refi to get money for a down on your next place.Once you have that maybe flip the next instead of holding it to get more seed cash for your next hold.HML lenders that I have worked with usually want a short term exit strategy, but I know there is a great podcast that should explain HML better.As with any of this, just make sure that your real estate investing fundamentals are all correct.Hope this helps.