What I’m thinking about: How close we came to funding a $70K lemon that could have destroyed our year. Five acres just north of Seattle, surrounded by $800-900K homes, previously sold for almost $250K in 2008.
We had it under contract at $70K with builder interest already north of $200K. Perfect setup for a near-transactional double close with massive equity upside.
Then reality kicked in during our due diligence process.
The seller was aggressive from day one, demanding EMD changes and threatening to walk if we didn’t close within 30-45 days. Kept saying ,”You’re gonna be able to sell this for double,” while pushing for larger earnest money deposits that would go hard quickly.
Red flag we should have caught earlier: someone bought this “premium” property for almost $250K, then let it go via tax auction in 2022 for around $70K without ever building on it. Then the tax deed buyer wants to move on from it, again without doing any development work.
When you see that pattern in a prime area like north Seattle, that’s not opportunity. That’s someone trying to pass off a problem.
The damage kept piling up as we dug deeper:
- Category 2 wetlands discovered via 20-year-old buildability report that covered most of the middle section, requiring 110-foot buffer from any construction. (LandID overlay did NOT show this.)
- Phantom road access – what looked like direct southern access to a county-maintained road in a major subdivision was actually blocked by a ~10-foot sliver of county land (previous owner was denied easement access 20 years ago).
(Credit to my due diligence consultant flagged it first: “I think this thing is going to be landlocked.” I didn’t believe it initially because we’d been operating under the assumption for weeks that we had premium direct road access.) - Half-mile easement nightmare – only legal access was from the northern boundary, requiring an extensive driveway to reach the sole buildable area at the southern tip.
- No public water – would need $30K+ well installation, cutting deeply into builder margins.
- Utility costs through the roof – power would cost tens of thousands to reach the building site.
When we finally ran the numbers with our broker who had qualified builder relationships, the economics collapsed. What started as a potential $200K+ exit dropped to maybe $20K per acre best case – only $100K total for five acres.
No way we’d fund $70K for a possible $100K exit with that much hair.
We tried one last Hail Mary: set up a de-risked double close by showing all the issues to his builders and seeing if there was ANY number they would consider to close on this property.
Told the broker we’d need to net $100K minimum in a sub 30-45 day double close set-up to make it worth the risk. Within an hour, his main builder contact said he wouldn’t touch it – “I would just donate it to the county for a tax write-off and move on.“
Deal dead.
Key lessons that saved us $70K:
- Aggressive sellers pushing tight timelines need to pass a high bar. When someone’s demanding quick EMD decisions and threatening to walk, they’re often hiding problems.
- Tax deed properties in premium areas deserve extra scrutiny. If someone walked away from a $250K property in a booming market, investigate why before assuming it’s a steal.
- Cross-reference wetlands data across multiple sources. LandID overlays missed what the USGS geological survey would have shown – always double-check questionable properties.
- Never assume road access, even with 10-foot gaps. Call the county to verify every access assumption. That tiny sliver of land cost us weeks of wasted DD time.
- When soil maps look fine but nothing’s been built, dig deeper. Premium areas with undeveloped land usually have hidden hair that explains the vacancy.
We canceled the contract and ate less than $500 in costs. Tax Title Services even refunded most of our deposit when we explained the situation (rare customer service win).
In this market, one $70K mistake can sink you. Speed of recovery, and understanding that no system is infallible, is critical for catching errors before they hurt, and maintaining steady growth in your business (and life!)
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Looking for reliable funding on your next land deal? Serious Land Capital specializes in thorough due diligence to avoid disasters like this one (could have been). Our expertise in funding deals grows by the day, while avoiding the lemons that destroy returns.
P.S. Want the full breakdown of every red flag we missed, before it was almost too late to recover? Episodes 138, 139, 140, and 141 of Get Serious dissect this entire WA lemon in forensic detail. Raw lessons from a near-catastrophic miss. No fluff.
