Although that money would be tax free it puts you in a tougher position down the road and you may even have to do a cash in refinance depending what your property appraises for.

Many tax sale properties derive from estates where the heirs take no action and the property goes to tax auction.

What I have done in this situation is I acquired the property and then had the individual sign a long term renewable lease and the cost was $1/yr + the costs of insurance and taxes. 

Is it maybe because this income hasn't been captured in a full year's taxes yet?

I know they can be financed just like a stick built construction loan, however, my credit union is not doing construction loans right now and does not have a time frame for when they will (SECU).I want to use the land as down payment if possible and finance the modular and the site prep for it.Looking at getting a new modular duplex or a SFH. 

She came out of a recent divorce with close to $1M liquid and a credit score in the 800's, has history as a successful GC/landlady, but after liquidating her previous rental properties due to divorce 2 years ago, no longer has recent income.

Obviously, all this income will funnel down to you on your tax return, but you should have go into your LLC if you have it titled that way

Having a broker underwite your loan to your borower will allow you to legally charge above the usury limit just as banks, credit card companies, etc. are allowed to do.Lastly, make damn sure the exit value is real and easily obtainable and that this "rehab estimate of $16k" is accurate.

At the moment Im into wholesale and tax lien/deed.

No banks and no credit needed How did you finance this deal?