However, the exact mechanism of how this works may depend on your specific tax situation, and it's advisable to consult with a tax professional.Real estate losses can also be used to offset passive income, but if you qualify as a real estate professional, you may not be subject to the passive activity loss limitations.Year-End Property Purchase and Depreciation:7.

Mechanics Lien for 21k.Unpaid HOA Dues for 3k.

I've served as an expert witness regarding poor performance relating to tenant maintenance of roofing, mechanical systems and tenant modifications without proper permitting.

@Wayne Brooks, is there a mechanism by which a purchaser can identify the total HOA balance prior to buying at auction?

Get an attorney on this one to make sure title is clear.Sometimes properties acquired through a tax sale have outstanding issues still attached to them.Make sure the seller is not just selling his tax position.I have seen these be fought out for years in legal battles trying to get clear title to the property.Meanwhile the guy takes rents or cleans out the properties and sells off the mechanicals for cash.Just get an attorney versed in tax sales for your state to be protected.Personally just on what you said I would go after other deals because of resale problems down the road.

Look for long sections of pipe that aren't mechanically supported, wire nuts waving in the breeze, people using garden hose for the propane line, etc.  

I am in the HVAC field and am mechanically inclined.

The deal is going to be tough if you can't get back the mechanical costs.Overall, if your net is 1800 (cap rate 5%) it's not good.

I have a Mechanical Engineering background from Syracuse U. and recently got my MBA from Shippensburg U.

I have my degree in mechanical engineering, something I think will help me a lot in the rehabbing department.