This was an auction online and it is a 4000 square-foot house built in 2005 with approximately 100 acres of land in a good location.

Was there anything that stood out as a red flag (given hindsight) during booking/screening that could potentially help prevent the same problem from happening again?

I try to find value add opportunities such as properties with larger square footage and less bedrooms and bathrooms than they could potentially have.

@Benjamin ManibogWe're in the Vermont Square neighborhood near USC and we're seeing more gentrification and property movement.

This made me really excited because this most likely meant the assessors office never updated the square footage when the place was rebuilt because I purchased it at 480 sq ft.

It doesn't mean that you can't renovate or update it, but you may not be able to do things like add square footage.

Some perfectly good HMLs do charge a good faith deposit (sorry to go against the prevailing wisdom here on BP who vehemently disagree) but to my mind the prepayment _plus_ the rapacious 5 points are simply too many red flags.

(This exact thing happened to my client on a property I sold for him)5) City catches you in the process of doing this unpermitted work and red tags your property.

Any red flags I should be aware of?

The two properties have a combined square footage of over 4400 square feet.