They declared a value add expense with the state of I believe it was $750K (something close to that) so they did a lot more than the ADU addition. 

We invest in notes but prefer first over seconds because seconds typically carry much higher risk - for example a jr lien could be 100% wiped out in a bankruptcy whereas not happening with a firstPros and cons to all - if you at buying at auction with liens still attached most lenders will want the full payoff or foreclose

I am curious about any process other than bankruptcy 

BUT, it all can still lead to major cost and time problems if the borrower files for bankruptcy protection.

And remember to declare your rental income on your taxes so you can use that income to help you qualify for the next house hack!

The bankruptcy court has a waiver to sign when you do not have the funds to proceed with the bankruptcy filings and other documents.

Hello,     Does anyone have experience buying a property that has had bankruptcy filed on it?

If the seller files bankruptcy in the future you have to prove to the court that you bought the house fairly.

CONDO ASSOCIATION HAZARD/FLOOD INSURANCE DECLARATIONS PAGES: If this is a Condo, associations usually carry hazard/flood coverage as part of their association dues.

Long story short they were about to lose their home and I made a deal with them to buy it but it needed to be taken out of bankruptcy and gone thru probate.