Negotiating with the City and The Bank for a Deliquent Property

[Ryan York]

Hello!

I'm hoping for some help on our situation. We are in Michigan. We have a lead on a property that owes a total of 35k (15k on a HELOC against the property, 14k on a loan to the city for repairs, and 6k in taxes).

The owner can't afford to pay back the loans and the house needs pretty significant work, so he's going to let it go. He's already received an extension on the taxes, so he's going to lose it within the next month if nothing happens.

My questions are:

1. Can we negotiate with the lender and the city on a reduced payoff amount for each loan and the taxes?

2. Can you offer some tips on doing this if it is possible?

3. Is there anything tricky/disastrous that could happen to us as investors?

Thanks in advance!