HELOC:Pros:Flexible borrowing - borrow as needed giving you flexibilityLower initial costsVariable interest rates - can be a con if rates rise, it can also be beneficial if rates decreaseCons:Variable interest rates - rate can fluctuateMore risk of foreclosure - you're adding a second loan

I feel the main reason the bank pays back taxes is to protect themselves of a tax foreclosure happening and they loose their security for the loan. 

In other words, Rioprop, basically.If you think of it this way:40-10-83 gives you possessory rights and lets you file an ejectment lawsuit with only a tax certificateOther sections address problems with the tax sale, burdens of proof, and tender, all having to do with technicalities of ejectment lawsuitsOne section addresses a statute of limitations with reference to an ejectment lawsuit, and othersThe final section addresses the remedy of awarding legal fees of the taxpayer redeems when ejectment is file.

Can I use a DSCR loan for these homes?

Your example of the property that had an opening bid of $4,000 but finally sold for $400,000 conveys the same lesson.

Investment Info:Other private money loan investment.

Michael - When you say "loan" - what are you meaning?

You typically have a certain time frame (known as contingencies) to get the loan closed.

Investment Info:Small multi-family (2-4 units) private money loan investment.

Our intent is to re-list the property as soon as everything is finalized.