Hello, we rehabbed around 12-15 properties last year and although some of the transactions were a bit complicated because we did a few double closes and what not, it should be easily figured out by a "Real Estate" Accountant whom I hired.

My earliest and best advice was from my Grandad (in his 80s at the time), who passed along the old English expression, when I was six:"Look after the pence and the pounds will look after themselves"Early advice aside, I've always had a philosophically complicated relationship with accrual of wealth, our hypocritical financial system - though have made piece with the fact that I need to be on the pointy end of it, broken or not.

John and Jeff, good advice over all, but here there is no trustee(judicial) and all bidding is online.Sam,Yes, get a title search.

You have some potential complicated moving parts in this situation.

Some states have much more complicated scenarios.

A good attorney in real estate law could probably tell you in 15 minutes what the legal effect is but it might be more complicated.

Principle reduction is much more complicated due to the tax benifits part and is a topic for another post.

-UPB on 1st is greater than BPO (underwater mortgage)-no 2nd lien-back taxes are well vetted (or none)-purchase is at a strong discount to BPO (15-20% of BPO) to cover all other foreseeable costs associated with disposition including the back taxes, foreclosure costs in non-judicial states, transaction costs, holding costs, and selling costs.

Granted, I know there are scenarios where the responsibilities would get more complicated, such as move outs, filling vacancies, evictions, etc.

However, I think having real property makes that more complicated and might require going through the court system and hiring an attorney.