$1MM in Tax Liens!

4 Replies

I've encountered a property owner who has a duplex with over $1 million in tax liens (state and county) placed on it. The liens originated from prior failed business venture. The property ARV is ~$500,000. I'm interested in buying it for $3-350,000.

Question: Has anyone successfully purchased a property where the leins exceeded it's value?

How did you negotiate with the taxing authorities?

Were you able to get the liens reduced and discharged to enable the sale?

Will,

I may be wrong, but I don't think you would be able to negotiate down the price of the liens.  Furthermore, depending on how you transfer ownership, you have need to have the liens satisfied before you take ownership of the property.

Depends on the exact type of tax lien.  IRS liens can be negotiated/discounted/released in short sale situations where there is no equity.  Non payment of Sales tax liens (which gas station owners seem to get in trouble for), probably not.  Probably not worth pursuing.

Believe it or not the state and federal government don't allow you to negotiate tax liens. I love fallacious assumptions about the charitable and forgiving nature of the state and federal government. So in response to your question I would guess zero people have successfully negotiated a rescission of specific involuntary tax liens from their property. 

Good Luck!

Originally posted by @Matt Mortensen :

Believe it or not the state and federal government don't allow you to negotiate tax liens. I love fallacious assumptions about the charitable and forgiving nature of the state and federal government. So in response to your question I would guess zero people have successfully negotiated a rescission of specific involuntary tax liens from their property. 

Good Luck!

Tax liens can and are negotiated. Depending on the lien and the agency they can be negotiated down or removed from title entirely to allow for a closing. 

Its been my experience that when liens are removed from title they are not forgiven but rather are removed from that particular property's title so an impending real estate transaction can be completed. The tax line liability still remains and follows the original debtor.

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