Hi BP friends, I have some very motivated sellers who have an abandoned house that needs to be gutted.  It's in a great location for my buy and hold plans, and I think that in the end based on the bones of the house and what they said they'd take for it, I can get a good cash flow from it as a rental after even a full reno, so I would like to try to help them out while helping myself too.  I've also talked with a contractor I trust who has seen it and is willing to take it on, and has given me a budget that still allows me to have a good cash flow for what I can rent it for.

It's in a relatively rural small town area, and the sellers said they would take $7,500 - $10,000 for it.  But then at the very end of our meeting, they revealed that there is a lien on it that happened as part of the deal for them to purchase the current house they live it.  This lien-holder is the USRDA.  

I'm still pretty green at this so I'm not sure how this would work.  I've asked these sellers to check with the USRDA to see if there are any restrictions on what the USRDA would accept as a sales price for the house I want to buy, or what is the value of the lien on this house. 

I suspect there could be a problem here, since the USRDA probably put the lien on it (and maybe also a value for the lien) before they moved out when it was in better shape.  However, after they moved out, they let the husband's brother stay there with some large dogs and he let them poop all over the house, so it smells horrendous and that's a big part of the reason it now has to be gutted, they also did a ton of damage to all surfaces.    

The sellers seem resigned that they will likely not get any money out of this because of this lien, they just want it off their plate.   The wife is deaf and the husband has two prosthetic legs from an accident.  They did mention that they were hoping I could at least offer $15K, and the USRDA would take $10K, and let them have $5K.  But I told them I highly doubt the USRDA would let them do that, since they have an $80K plus mortgage on their current house.  I suspect that the USRDA will put everything toward their current mortgage, especially if they're not getting much due to the condition.  But I was wondering whether I could potentially offer to give them at least a bit of cash after all is done (maybe like $1,000?  That would be a lot to them).  Is this legal, though?  I don't want to get myself or them into any trouble, but I would like to help them a bit if I could, in the spirit of good karma and helping solve problems, since I'd be getting it for such a low price.  Maybe that's going too far, though?

Any advice or things to ask or watch out for here on these two topics:   1) dealing with the lienholder, and also 2) offering a bit of cash to the seller if all goes through.  Thanks very much.