I've got news for you... you're not keeping your eye on the ball.

If at any point the property owner pays off the overdue property taxes before the lien expires (period may vary by state), the county is the party that earns the interest.Properties that are owner-occupied (as indicated by a homestead exemption showing up on the annual tax bills) or have a mortgage are most likely to be bid on because they have a higher likelihood of being paid off either by the homeowner or the mortgagee (the lender); the homeowner probably doesn't want to lose his/her place of residence and the lender probably doesn't want to lose its investment.If no one has bid on a lien, there are likely issue(s) with the property that, in the eyes of bidders with investor mindsets, render the property valueless, for example:the property has no direct access (landlocked or waterlocked),the property is too small to be built on as-of-right per the municipality's zoning codes,the property is contaminated (a Phase I environmental report would scour records on the property to see if contamination is likely, and if so, a Phase II environmental report would be done and soil, etc. samples would be taken to confirm the contamination),the market fundamentals indicate little probability for profit given the level of risk, such as high vacancy rates, low rents, or slow sale/rental velocity,the property is in a "poor" location due to many of the types of things that turn off people looking for a home in which to live, such as high crime; poor or nonexistent infrastructure, such a streets, water & sewer, etc.; too rural/too urban; neighboring uses detrimental to the property's value, e.g. railroad, warehousing/industrial district, jail/prison, cemetery, etc.I hope that helps!

But since they are a step between doing everything yourself and having a full-service property management company handle everything for you you should expect to have some time invested in the venture even if you use a marketing and booking service.It is great that you live close by, that will allow you to keep a close eye on the property and quickly handle any maintenance issues yourself instead of having to hire a service to do it for you. 

Being only two units, that NOI increase doesn't necessarily increase value in an appraiser or Bank's eyes. 

Your neighbor who is clueless and is levered up to his eyes.

If it's super hot and similar properties are selling at 5% over asking price, I'd make my offer based on that.If it's a slower market and a full price offer seems fair, I'd go with that - presuming that in either case the numbers work.I would not try to negotiate the price downward based on things that are obvious to the naked eye, but only on those things that were not.In general, I recommend that my clients negotiate a price reduction rather than asking the seller to do repairs. 

When all three are in agreement, there isn't much risk and not much value that my eyes would have added.My actual profits came in almost exactly at forecast. 

I've been doing some research and found out about Student housing and it really caught my eye.

Probably the best strategy in this line would be to buy a condo in a nice community and get active on the board and then keep an eye out for sellers and pick up more units one at a time...off market deals.

As a final point I would say that a creative eye is a useful tool but it isn't something you should hang a hat on.