His rents are way under market, the only people who are willing to rent from him are those that can afford that low rent, he knows the judge who does the evictions on a first name basis, he cannot afford to ever repair his properties, and he is seriously behind on property taxes to the point of losing some of them.Not only that, but despite being 70, he mortgaged his home recently to cover debts from the slumfolio, to the tune of several hundred thousand!

The though of losing their deposit however usually is enough to get them to clean up and fix.

There is no point putting it into the plan in the first place if your only intention is to pull it back out immediately in a loan.For someone who has had a 401k for some time and contributed over many years, this "hidden cost" of losing the deferral basis of the 401k funds is acceptable if the use of the borrowed funds will be of real benefit such as getting them started in real estate investing.  

If that happens you could easily have to fork out $5,000 to fix the place up (Speaking from experience here), plus you could lose that rental income during this period.

Be aware that you'll likely lose 2-3 of your renters along with your current rehabs over the first few months.  

It's possible to actually lose money with all the fees plus you time.

So there was really no reasoning with him, he seriously believes he doesn't have to pay taxes.My question is is there any way I can ensure to be in the first position to buy the tax certificate so I don't lose the property?

I'm working as an Engineer with a decent salary, however I'm using my excess cash to pay down my existing debt incurred from my previous business.

If so, figure on losing about 20%-30% through collections losses/leaks.  

Also, with spring coming, I may lose out on a longer term tenant.Opinions on whether I should take these tenants( assuming regular qualifications are met)?