$35k owed in property taxes... is this a tax lien deal?

I came across a home that’s $35k behind in property taxes.

Seller said the city hasn’t foreclosed on it yet because it hasn’t hit the minimum threshold of $40k.

This house has been abandoned for ~10yrs, need a complete gut rehab and is only worth buying at $40k or less.

I called the city and they said they do not reduce property tax amounts. It’s not negotiable. The full balance with all the fees, late payments must be paid.

Does anyone know if there’s a way to have the tax lien reduced in NJ??

In general, governments do not act like businesses and do not make decisions based on good business practices. In my experience a government entity would rather lose money by following their “procedures” than make a smart decision. You don’t get fired for following procedure and its not their money. What you might be able to do is purchase the tax lien at their next tax lien auction and then foreclose on it yourself.

Sounds like you already answered your question. You could always ask the building department to report on the condition of the property and talk to your councilor and make a presentation at the next council hearing why it should be reduced so it’s feasible for you to clean up urban blight and ask for them to vote on it. I don’t expect much success, but you can always give it a shot.

Unfortunately, tax liens are almost never reduced. Michael Pellegrino is a New Jersey attorney wrote a book about NJ Tax Liens-- http://tinyurl.com/NJtaxlien

In the meantime, I would suggest find out everything about the land and area to determine its highest and best use. If let’s say that property is zoned for multi-unit property and the property on there is a single family, it means someone can build a 2-4 unit building therefore the value is greater than $40k.

It sounds like a pretty good deal to look into. But, do your homework first. If the taxes haven’t been paid, there just may be other liens against the property too. And, if it’s been abandoned for 10 years, the rahab costs could be astronomical. Abandoned homes tend to come with electrical problems due to rodents, plumbing problems due to non-usage and damage created by squatters.

If you’re really serious about this investment, be sure to do a title search to validate ownership and make sure there are no other liens against the property. If you choose to move forward after that, get an appraisal to ensure that the current market value is at least what you’ll be paying for it. Remember… you want the highest ROI possible.