This episode reveals critical warning signs from seller behavior and property history on the Washington deal, where an aggressive seller pushed for hard earnest money deposits and compressed timelines while withholding requested documentation. The property’s trajectory—$250K purchase in 2008, tax auction loss in 2022 at a fraction of that price, immediate resale attempt by the tax auction buyer—painted a clear picture of a problematic asset that multiple owners couldn’t successfully develop or hold.
Key Takeaways:
- Tax Auction Properties Carry Extreme Risk When properties sell via tax auction after premium purchases, assume the previous owner discovered deal-killing issues—this one went from $250K to roughly $70K at auction for good reason.
- Aggressive Sellers Withholding Documents Are Selling Lemons Sellers demanding compressed timelines, hard deposits, and higher prices while refusing to provide promised buildability reports are trying to unload problem properties before buyers discover the issues.
- Serial Quick Flips Signal Deep Problems When a tax auction buyer immediately lists without ever attempting development, they’ve likely uncovered the same issues that caused the original owner to abandon the property.
Listen to the full episode to understand how property history analysis catches lemons before contract signing.
(Podcast transcript below)
Hey, Chris stuff over at Serious Land Capital, vacant land funding partner. Uh, so I’m going to do some even shorter than usual episodes. Uh, both it’s a bit of an experiment and I know we’re heading into a long holiday weekend, uh, at least here in the U S so I was working most of today on this Washington state deal, um, that we were
Anticipating closing for roughly 70k Over the next month ish. I’ve talked about it a bit over the past few weeks here But ultimately it did not work out so I want to go over some of these key due diligence lessons because this one was a complex and hairy property that was not Obvious how hairy it was from the start So
I’m going to break this down into some specific lessons about this, but it was roughly five acres just, just north of Seattle, right near some really significant developments, you know, where there are $800, $900,000 homes in the area. I okay, there’s a real chance here that we could get some serious change.
this property ended up being way too hairy from an access perspective. There were wetlands that were not immediately apparent on the property. So I’m going to go over that. But a key warning sign was the seller situation. And I know I’ve remarked on this before, but like, you know, sellers come in all
forms and flavors effectively. Some will be very straight up and some will not be. And I would always rather believe the former, but I underwrite from the latter perspective, meaning I take out anything a seller says to us that’s not backed by hard data or third party confirmation to take it with a grain of salt because they’re
On the other side of the table, right? You know, they’re incentivized to get as high a price property move, on from something, you know, uh, we, just have to keep their incentives in mind. And so with this particular property, we had noted that it sold for almost a quarter million dollars somewhere around there in 2008. Um, so I, I forget when the first month.
happened of the GFC. I think it was late 07 if I’m remembering. yeah, somebody bought this even as the GFC was going down at a pretty premium price. And then they let it go for via tax auction in 2022 for a fraction of that price. I’m not
actually certain that we have the confirmed price paid on it, but I think it was right around 70k. So
you know, if you’re doing the math there, I mean, that’s like, you know, 30 some odd percent of the price paid by the previous owner. And then we had this property under contract for 70 K as well. And the seller was really aggressive from the start and asking for all these terms.
Changes and it’s like, yeah, you know, it’s buildable. I’ll give you all the reports about this And
Was also indicating okay, you know, if you guys don’t close within this 30 45 day window We kept going back and forth about this thing. I talked about this another episode how to deal with this guy Hey, you know, you’re gonna be able to sell this for double here. Like, know, I want you know a larger EMD on this and then you’re in this money deposit and if you don’t close by 45 day timeline initially one at 30 like it’s gonna go hard. We’re like, okay, you know that you you bought this
via TextEED three years ago. So we’re needing to go through Text Title Services, make sure the title is cleared so we can get marketable title on it. So, you we went under contract with them to get this thing rolling so we could hit that closing timeline as we were completing DD. Obviously it didn’t work. And so very fortunately, we were able to cancel that contract quickly without too much invested into the deal.
yeah, think our total hit would be like less than 500 bucks. I always cared more about time than, than money here. But before I dive into the other details, why this was so hairy, just a key warning sign again, just from the seller side, when you really start to be putting, you know, that’s why I always ask about what, what, is the seller situation here? why are they looking like go their property and really assess the history of the property as well and see if you can put.
put together some of that data. And a situation like this was just a very clear warning sign where it’s like, okay, this seems like it should have been a premium property given the surrounding neighborhood just north of Seattle. It’s been a booming area for decades at this point that somebody bought for almost a quarter million less than 20 years ago.
and then let it go for a fraction of that price via tax option without ever building on it. And then the person who bought it via tax option is then looking to move on from it within a few years of purchasing again, without ever doing anything on it either and not really looking to profit on the deal. So if you see a situation…
like that where there’s just a lot of red flags. Okay, what is going on here? And really anytime something goes via tax auction, like there’s going to be more here you really want to investigate further. Then you start having to ask more questions on, you know, is this seller legitimate? Am I missing something here? Are they trying to sell me a lemon? In this case, they were. And we canceled the contract here.
And so, you know, our suspicions were actually realized in accordance with this, you know, questionable property history that just seemed even a bit too good to be true. So I’ll end this lesson for today on this property and you know, there’s still other lessons to come on this one. we certainly learned a lot here. so if you’re looking for funding, serious land dot capital.
zero cost review of your land deals and land daily diligence Facebook group Adding more and more people to it every single day and landpricer.ai a lot more work coming up this weekend on it even the new prompts I was working on have performed a lot better. We have like a 24 % improvement on one of these that I fixed yesterday It’s really good to see when you actually put effort into something and it works out in the direction you want so with that in mind subscribe and share looking forward to
talking to you next time. Take care, bye.
