Tread carefully if you choose to close with the tenant/squatter.

He may be afraid of something he cant avoid, or he may be wanting you to lie for his benefit... tread carefully.Also... if he does not want to pay taxes and he wants to buy another building, he can always do a 1031 exchange, the cost of that is only 1 or 2K.

Tread lightly if you haven't laid eyes on it.

The massive appreciation in the last 2 years took a big bite out of future appreciation so I suggest to tread lightly even though history shows we still have room to run. 

Homes are sold "as is", but "as is" can be broad, if you are buying privately, get a good real estate lawyer to guide you through.I am also a realtor myself, and also a bit biased towards private sales where no prior relationship exists with the seller, tread very carefully.

Thanks and sorry for hijacking your tread.

When evaluating if buying a property is the best use of money the author states "Do the math:  If you buy a $300,000 house with a 95 percent loan at 6 percent, and the house appreciated at 5 percent annually, you're just treading water

Tread very carefully with this idea.

What's your goal for this tread?

I would tread very carefully before proceeding - and as suggested elsewhere on this website numerous times, have a few back up plans.Development can be very profitable, but it is has a lot of risk, a lot of which can be beyond your control.