I'm wondering if some one can help with an explanation about why a Hotel has many rooms with tax lien on auction? 

There are several different types of income in the US tax code.Two main types are “active income” and “passive income".Active income is money you earn from working, such as wages from a W-2 job or income from running a business.Passive income is money you earn from investments like real estate, stocks, or rental income from your RE portfolio where you earn $ without actively working.Normally, you can't use passive losses (like losses from real estate investments) to offset active income like your salary from a W-2 job.That is unless you are an RE Pro.The reality is, that Real Estate Pro status is just a filing status similar to filing married or jointly.And if you are a real estate professional you CAN use passive real estate losses to offset active income from other sources.To qualify as an RE Pro you must:1.

NJ has the highest taxes per capita in the country so high taxes are expected especially in Northern NJ.

Maybe that is why the old owner didn't pay their taxes?

After collecting tenant pass-throughs for the year, do you pay the property taxes at the end of the year or the beginning of the next year?

Fannie/Freddie (Conventional) loans aren't just about rate and transfer taxes. 

Hey @Nick Gallon Martin, I recommend speaking to a Tax Planner/CPA, @Jeff Nash would be a great resource for you.

If your goal is passive income, it's not going to be in New Jersey when you factor in cost to purchase, management costs, and rent to price ratio, but what you can get is steady appreciation.

This is a screenshot from a private Facebook group for tax professionals.

Quote from @Raghavendra Jakkani: The tenant should provide proof of income that doesn't require detective work.