I have a rental out of state that has dramatically appreciated in the 24 years I’ve owned it (paid $110k, MV is $340-375k). 

The lender doesn't want to see a dramatic drop off of overtime in the last 12 months compared to the previous 12 month period.

I doubt the next downturn will be that dramatic, but if prices dropped (some) and renters disappeared, what would be your exit strategy? 

After looking at the information the agent gave me it looks to me like he was too close on his payments and when the property value rose dramatically from the cities investment he could no longer keep up with the payments and the taxes because the property taxes rose correspondingly over that same short period all at once on his properties.

I looked at what they would provide without financing  and it seems to have happened because the value of the properties in the area rose dramatically in one year 25%, then the single owner could not cover the cost in property tax on all his property so he is in foreclosure.

Multifamily syndications don't require any work on the LP side, can be less risky with conservative underwriting, and in a down market, rents typically don't crash as dramatically, if at all.  

For several of my properties the county has reduced the 2018 assessment dramatically.

But bottom line, I think you are on the right track.I think comments about characterizing this as a "misunderstanding" being a sleaze slumlord move is a bit dramatic. 

@Bill Glick the tax sale laws change dramatically from state to state and sometimes local jurisdiction to jurisdiction. 

1) economic status is stable ... nothing too dramatic pending one way or the other 2) market in pierce county healthy ... more inventory than king ( Seattle )3) most of Tacoma’s suburbs seem much closer in proximity to the city as compared to Seattle ... there are a few areas that will be lower in price ( and not as desired ) 4)