Ideally, a tax escrow payment has already been established on the account to help ensure taxes remain current going forward.Bob's approach will work if the borrower agrees to the large escrow payment. 

So you can still claim the $3000 under the routine maintenance safe harbor but you cannot elect SHST for that property, instead you need to classify every item of that remaining $4000 and test each item's effect on it's respective UOP. 

Remain in the area for minimum of 1 year.The other option is investing remotely as a newbie but I am not too comfortable with that considering I will need to put a lot of trust / faith in people I have little prior interaction with.If anyone has done anything similar or has any advice on my options / potential markets for me to look into for April 2015, please contact me or leave a post.Thanks!

@Daniel Sistofor me personally, I focus 85/90% on my primary investment objective and the remaining just reading through other posts to gain some knowledge.

I desire a three bedroom house so that I can owner occupy the property while renting out the remaining two rooms to tenants.

The remaining 10% who do not fall in to the tire kicker class know the routine and are not intimidated by not seeing the insides without an agreement on the table.  

If we remain with hydronic heat it would likely be electric boilers as I do not believe natural gas is available in the neighbourhood ... nor is it any more cost-effective here.  

He has not abandoned the property if significant personal items still remain.

However, the fact remains that the loan is not assumable, but no penalties, etc... are stipulated.  

Usually they are properties worth less than what it would take to pay off all remaining city liens, costs to bring to foreclosure and prior real estate tax liens that may be on the property.It's tough to "reinvest" when the auction is held only once a year and the leftover liens are picked through.