Selling land and has 14.5 k in Labor Liens (Houston TX)

[German Torres]

Hi BP community!

I bought a land at Tax Sale Auction thinking I was buying a house for 18.5k, really soon after the Auction I was embarrass for my poor Due diligence, took me a while to overcome the feeling.

Year and half later I took the decision to sell, and finally a buyer 11 months after law ball me and I accepted 18k, just to take my inicial investment, but this time title company told me Is a Labor Lien for 14.5k dated from 1985 (the land used to be City’s property).

According to my math, if I decide to go through I’ll be loosing all my money, because I paid back taxes and current. 

I have the Idea to cancel the contract, develop the land building a duplex, and when the time comes to sell I’ll have developed  enough equity to  cover the Lien.

Any Thoughts?

[Cody L.]

Don't chase good money with bad.  If you want out, get out.  If you think you can develop and add more value than the cost to build, then that should be something you should do regardless of the lien.

FYI you won't be able to get a construction loan as long as that lien is in place.  You're going to have to take care of it at some time.  I'd find out who the lien holder is and negotiate with them.  See if they'll take less to release it.