s strategy of sending notice to the tax debtors to encourage redemption is the best course of action.  

The property is a part of the debtor's estate until the property is properly foreclosed.  

Better to use investor as debt or equity partner? 

You are equity holders and they are debtors, which may or may not be fulfilling your partners goals of ownership, but may fulfill the income.I would look into the co-ownership structure.

To sustain my current lifestyle, I'd need about $6K/month, but that would not be enough to let me build up additional funds to pay off more debt or acquire more properties (with my own funds), so I'd like to aim for higher.At the same time, I do also want to build for potential of increasing net worth, which is why I started acquiring the Orange County properties (whether those were good or bad moves...). 

Hi @Jerry Shen - Welcome,As always on BP - you are getting some fantastic advice from posters (as well as a few fishing attempts- to be expected)Another option to consider is crowdfunding via a few of the top tier portals-  providing an easier way to diversify by  type (debt or equity), sector (MF, SFH, Apartments, retail, office, ground up developments etc),  amount and geographic location.

If the debtor is volunteering to pay you $100/month, take it, no matter how long it will take to get it paid off.

I will always go after debtors for a money judgment in an eviction.

Your buyer has to create equity through debt or lose money if they needed to sell as they paid 20K too much for the property.  

Trustee's Sales (in Trust Deed states) and Foreclosure Auctions (in mortgage states) are part of a legal process where a lender conducts an involuntary sale of a debtors property.