I am only speculating here, because I have not yet been to the recorder's office to perform the chain of title research yet, but the owner likely paid the property off in full five years ago and did not realize that they were responsible for tax payments on both parcels.Again, what would others do with this tax sale and what would the investment strategies look like on this one?

Not sure if there is anything but appreciation speculation in the SF market.

@Kibby Twong,All the rest aside, buying for appreciation is speculation - read: gambling - it's not investing.You may as well roll the dice on Wall Street.David J Dachtera

So I value cash flow more then appreciation because obviously appreciation is speculating and I treat that as icing on the cake as some woudl put it lol. 

Forced appreciation is not speculative.

After talking through it with our broker, the red flags are really a measure left over from the 2008 bubble that prevent flippers from speculating on properties.

It would be hard to sue someon because they "speculated correctly".

I learned from another investor to never buy on the speculation of appreciation.  

And keep in mind that doing 20% down is a guaranteed marginal 9.37% compared to 3.5% down which is a speculative 9.37%.Does that mean I hate FHA 3.5% down?

@Aaron JonesLevi T. is correct in that it is highly unlikely that bank would give you a loan for the reason mentioned above and also, because it is rare if not impossible to get a loan for a business that deals in speculation (especially without a proven track record).