I messed up buying a property at tax sale in PA
Hello everyone, this is my first time posting on BP. A little about me, I have been investing in RE for about 11-12 years now. I have 22 rental units, mix of SFH and multis. I have done a bunch of flip properties.
I won the bid on a house at an upset tax sale auction this week. My wife and I spent 3 days prior narrowing down the list of properties to parcels that were worth bidding on.
Well, I made a mistake and I'm owning that mistake, literally. The property that I bought has a mortgage on it (according to the current owner) that makes the deal not worth it. We did not see any mortgage for this property when we were researching the deeds. I am going to re-research the deeds, I feel the mistake has been possibly made by checking the owners name spelled one way and not both ways. (Stephen - Steve) The bank with the mortgage is Ocwen, which have bought foreclosures from in the past and have heard they aren't the most up and up bank. Another possibility is that the mortgage hasn't been recorded.
If this mortgage is real and active, I don't want the property. I know the motto is: buyer beware. I get that.
I also now, that if you get yourself into trouble, there is always a way to get yourself OUT of trouble.
A few of the options that I have came up with if there is a mortgage so far are these: Take the deed because I have to and collect the rent until its foreclosed. I only have $3,700 into it.
My concerns with this is that the foreclosure could negatively affect my credit or my business. The reason this concerns me is because I am taking title in the LLC I've had for 10 years and I don't want it messed up. Thoughts?
My other option is if the mortgage will IN FACT negatively affect me, is to set up a new LLC and pay the transfer tax to move the property from my rental LLC to the new LLC and just let the bank foreclose.
Other than that, I don't know what options I have, simply due to the fact that I've never had this happen before.
Again, thank you in advance for any information or advice you can provide!!