Forced appreciation allows me to build equity from the beginning of the investment, so if I need to firesale for an unforeseeable reason, I will not be underwater.

This triples your headache.BE the voice of REASON to your friend. 

There are a bunch of reasons people sell a property.

Entitlement is the process of getting municipality authorization  to build a specific  structure  on a specific peace of land for a particular  reason. 

There is no reason you couldn’t do the same… so why let them make the money and give up the control?  

I've owned student housing as far as 4.1 miles from the University of South Carolina campus.In my experience, the only reason kids would live that far away is cheap rent.

that is more a RV park. the MBH parks down here. we typically own the land, lot, and trailers. there is a reason but long story short, if i just own the lot and they dont pay the fee. i do not have the biggest teeth to push the need for my money. but if i own it all, my experience says it is a better path

I like the property for a lot of reasons. 

It's a dishonest promise.If you are in foreclosure, it sounds like you are either there or headed that way,  what you are encountering is a "foreclosure scheme" they are illegal in most places and for good reason.

I am staying wondering why there is so little information on tax liens,  i read some books on notes and foreclosures but looks like a big secret here... maybe that's the reason... i need to go into this to find out :)