Exit Strategies for a redeemable lien on empty land
I have a tax lien question. I own a tax lien certificate on a .25 ac strip of land that does not seem very usable except to the owners of the adjacent lots. I have paid the taxes for several years and can now apply to redeem the cert for a tax deed. In preparation for this I went into the recorders and assessors offices to look at the chain of title. In doing so, I found an interesting situation. I'll do my best to explain this clearly.
This .25 ac parcel was half of a .50 ac parcel that was originally platted to become a road that ran between the Brutsman and Burns residences. After several years plans to add the road were abandoned and the city vacated the land giving .25 ac to Brutsman and .25 ac to Burns. Burns subsequently annexed their .25ac into the 1.5ac parcel where their home was located. Brutsman never annexed the .25ac parcel into their 1.5ac parcel where their home was located, leaving Brutsma as the owner of 2 separate (but adjacent) parcels with no definitive physical boundary separating the parcels. Brutsman subsequently sold their home with the 1.5ac parcel a few years later to Edmonds, but never sold the .25ac parcel. However, since it all appeared to be one parcel, Edmonds used both parcels as though it was their (probably never realizing there were 2 parcels).
Ten years went by before the .25ac parcel ended up in a tax lien auction where I acquired the certificate several years ago. Over this period of time, Brutsman (the legal owner) has moved out of the state. Edmonds has used their entire 1.5ac and the .25ac as their own. I believe that Edmonds think this has been their land since they bought the 1.5ac parcel over a decade ago. With Brutsman out of the state, I doubt they will put up much fight to retain the land if I apply for tax deed. And unless I notify them, Edmonds will never receive notice of the tax deed proceedings since they don't actually have a legal interest in the .25ac parcel of land, even though they "use" it (it is currently just raw land without any real improvements on it).
The value of this .25ac parcel of land is roughly $6K. I am into the lien about $1500. Foreclosing to get the tax deed will cost about $1100. I'll also need to pay for a survey of the land which could cost a few hundred. I fear that I get the deed and Edmonds may not agreed to buy it from me. I could always approach Burns to see if they would like another .25ac. Ultimately I could put a fence around the yard to prevent Edmonds from using it unless they buy it from me (this will another expense). I'm trying to think of my possible exit strategies and wondering what you might do in a situation like this. Also, the .25ac parcel is several hours away from my home, making it even harder to do any "management".
Here are the options I've thought of:
1) Contact Edmonds before getting the tax deed, see if they want to pay the back taxes on the property...even though they don't own it. This will cash me out and they kick the can down the road another several years
2) Contact Edmonds and negotiate selling the property to them after I get the tax deed.
3) Contact Burns (the neighbor with an adjacent parcel), if Edmonds is not responsive, and see if they would like to buy the parcel.
4) Sell my lien to Edmonds and let them file for tax deed. This will allow them to get the property for cheaper than buying it outright from me because I would sell it for less since I don't have to go through the hassle of getting the tax deed and finding out that neither Edmonds nor Burns want to pay me anything for the property.
5) Sell the tax lien certificate to another investor who may live closer or have more interest in this parcel.
6) Get the tax deed and use it as collateral to secure a loan where I could get funds for other investments
7) Get the deed and include it as part of the down payment on the purchase of another property.
8)I think I've run through the ideas I've come up with and am wondering if you see any other possible avenues/exits that you would consider? Thank you so much for your input!