How would you mitigate the environmental risk
I live in California, and bought a tax lien certificate (technically a Certificate of Purchase) on vacant commercial land in Arizona, sight unseen, at an online auction. It's 36 acres, assessed at about $100,000, and walking distance from a highway.
The assessor's website does value the improvements at about half the assessed value. But there is no visible building on Google Maps, and Xome.com states 0 square feet for the structure.
Big red flag: I got it for 16%, the maximum interest rate in an interest rate bid down state. Which means I may well have been the only person foolish enough to bid on it, among the billions of people with internet access.
On the other hand, the fact that the owner didn't pay taxes since 2018 is not a big red flag. The land belongs to a partnership, and the (or at least a) main guy in the partnership died a couple of years ago at age 90. And the partnership had been paying property taxes for 16 years prior to 2018.
I own the lien in my own name. The redemption period has expired four months ago. And, two days ago, I mailed out the 30 day notices to start foreclosure. My suspicion is, the dead guy won't bother to redeem the property.
My main concern is environmental contamination. Before buying the lien, I checked the EPA superfund website, and their map of known toxic sites. Neither showed any red flag for the property, or any other property within a mile radius.
If you were the lien owner, how would you go about this?
1) Would you have a lawyer start a foreclosure in your own name?
2) Would you register an Arizona LLC to do business in California, transfer the lien to the LLC, then have the LLC's lawyer foreclose in the name of the LLC. And keep paying $800 a year franchise tax?
3) If you went the LLC route, how much money you would put into the LLC to significantly reduce the risk the EPA and Arizona's environmental agency pierce the corporate veil. If I remember correctly, there is an insurance company insuring against the risk of having the corporate veil pierced. But they require following a lot of corporate formalities, and funding the LLC with $50,000. $800 a year in franchise tax fees is my no means sufficient to buy liability protection from a determined litigant.
4) Would you hire an environmental testing company to test the land (to which you have no legal access - but I doubt the dead guy would call the cops on you) once the foreclosure process has progressed well enough, but before it's conclusion, so that you tell the lawyer to stop foreclosure in case some major contamination is discovered?
5) Would you get legal residence in Venezuela, which has no extradition treaty with the United States, to escape with your money if and when you receive a million dollars bill from the EPA?
What else would you do to mitigate the risk of environmental contamination that would cost more than the land is worth.
Note that I am not concerned about minor contaminations that can be fixed for under $25,000. Just major stuff that would end up costing me more than the cleaned up land would be worth.