There are many pitfalls as have been mentioned.Another thing to check is the county or city it is located in has a statute on the books where utilities survive the foreclosure process.I my state of Georgia some counties have it where water liens and garbage and waste survive foreclosure and will not be wiped out.Some of these lien amounts are substantial at over 100k.Also remember that property taxes survive foreclosure as well.Those liens would be superior to yours.The IRS has a legal claim to property they are owed taxes on and you have to wait 120 days afterword for their lien interest to expire.So if there is a lien from the IRS do not do any work to the property until there interest expires as they only have to compensate you for the value at foreclosure and costs and not improvements since that time to redeem the property.You would need to approach the owner in advance and see if the want to even own the property.If they are very adament about fighting to the end you might want to look at other notes unless there is tremendous upside.They might however just want a 1099 and the current lien holder isn't cooperating.

Are there any pitfalls with this idea?

Do you think he had his share of pitfalls along the way?

Please keep your stories factful, brief and define the pitfalls you overcame.LET'S HEAR YOUR STORIES ...

Being that you are here in Cali, I am sure you know the endless pitfalls and problems with these deals in Cali.

Aren't you more aware of estimation factors, pitfalls and quality issues?

I have the cash for any repairs needed if I need to make fixes before receiving my draws.Please let me know if you see any pitfalls in this deals.

First, be careful of pitfalls on this one.  

I am doing my best to get up to speed on all of the applicable state laws and local ordinances, but I am realistic that there will be some pitfalls and a learning curve along the way.  

What are the pitfalls?