I did talk to the planner, the process was stated and approved through the tentative map step but the current owner pulled that and moved out of the country so I will be back at square one. 

If that is the case, I'd either skip the bankruptcy or talk to a bankruptcy attorney before going that path.2) Instead of selling off the houses, what if she sold a portion of the LLC to you?  

The investor I talked with feels this is all way to fast. 

I’ve seen a lot of positive posts and information online about tax deeds but I’m sure there are some hidden negatives as well that gurus online won’t talk about. 

EMBRACE the awkwardness of talking with sellers, of knocking on doors, on hearing objections and swears, On realizing that you're working with people in a sensitive part of their lives.On getting ARVs wrong and having buyers tell you that you're numbers are off, and you need to renegotiate.

Have you talked with a lender to see what price range you will be qualified for?

Talk soon! 

Where I'm at in California, if staff (the planner) is being obstinate, then the other two routes are 1) hire a land use attorney or entitlement consultant and if they feel that you have a case to build just one home without going through the subdivision process, then they may be able to compel staff in a way you can't, or 2) talk to an elected official who may be able to sway staff to give you what you want.

Let's talk about Capital Gains Tax.

I finance investors all over the country and I can't tell you how many times I talk people out of doing deals.