Seeing opportunity where others overlooked it or buying off market deals sounds like the way you need to go.Have you attended your local REI groups to find wholesalers? 

I see this as a great opportunity for you. 

We don't have too many of those but when we find them, they can be great opportunities because as Austin references above, if you buy right, you can sell a little lower when you're ready creating more demand for your property versus the competition. 

I was told I still had the option to initiate a transfer, however, I would have to pay the 3% transfer fee and pay the variable 14-24% interest rate while funds were in use…Just like that, 40k of capital to go out and buy assets and get them to cashflow……gone.As a value-add real estate entrepreneur, I understand with every challenge encountered, there is a lesson to be learned and an opportunity to evolve.

That could be a great way to find and stay engaged with local investors, realtors and opportunities. http://www.biggerpockets.com/alertsLooks like you've already made some connections with other BP members in your area...You can also search for other investors or brokers in your market and follow their journey on Bigger Pockets here: https://www.biggerpockets.com/search/usersBest of luck to you and look forward to following your success on BP!

My boyfriend and I currently own a rental property in Pittsburgh and we are planning to move to CA next summer for career opportunities.

I've just recently began to implement the owner financing and Subject-to opportunities in my options when offering on deals, but would I be able to do this with pre-foreclosures?

It drives me nuts that I don't have at least a small single family yet,  I'm keeping my eyes open for other partnership opportunities, but I've also realized that I may need to put hustle into helping others close deals to further put myself in position to myself.

Having the opportunity to own my next home outright.

The IRS always views entity transfers like that as an opportunity to basis shift or a potential step transaction - either deliberately or accidental.