If you feel like something may be wrong, most likely it is. 

That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project.

There is no right or wrong way to approach them.

But what is wrong with a second position lien?

They are brutal in all of South Carolina, but specifically in Columbia.A $1,000,000 investment property would be paying over $28,000 year just in property taxes.#1 tip I'd give if you're buying existing (or building) is to call the assessor and ask specifically what the new assessment will be after improvements.

Am I doing something wrong in my underwriting methodology? 

Numbers are very specific to the market you are looking at.  

I understand things go wrong, and bad things happen, oh well.

I have heard of someone who would accidently have a pizza delivered to the wrong address which just happened to be the address of a property being foreclosed on so when the door was opened they could see a quick glance of the interior.

And the fact that your post had at least three votes for it when I posted this shows that there are lots of other people who would probably be losing in PA under those same assumptions that just happen to be FALSE in Pennsylvania.Pennsylvania has some rather complicated rules when it comes to tax sales; the particular type of sale that the OP purchased at is one that does not divest any liens; it simply changes the party that is the owner, with the new owner taking title subject to all liens and encumbrances of record.With tax sales, the buyer must be aware of all the local rules under which the tax sale is being conducted, because the rules vary all over the place.Now, what the OP seems to have failed to do in his research was to cross index the recordings at the county recorder; the "missed" mortgage would have showed up on a search by parcel number if that sort of cross check was done (and assuming all indexed documents at the recorder are properly indexed of course - I have seen mistakes made attaching a document to the wrong parcel).