Remember, land usually sells much slower than houses, unless it's in a really hot location, so you'll have to lower your asking price quite a bit from retail in order to sell it quick.  

You would only be subject to depreciation recapture based on the depreciation taken during the period it was used as a rental.Have you looked into doing a cash-out refinance before turning it into a rental?

@Brandon Hall correct me if I'm wrong, but for the 2018 and beyond tax years, the LLC now does make a difference, as it could be subject to additional pass through taxation reduction- as well as needing to make a choice on how the deduct mortgage interest.

Even if you create a non-CA LLC, if you are managing the business from California, you will be deemed to be "doing business" in California and therefore subject to CA taxes.

What are some suggestions to locate and market subject to, owner/seller financed, or pre-foreclosure deals?

@Corinna Gossner , You should not be putting the Triplex in the S-corp for so many reasons that you can read on other posts.The rental income is not subject to SE tax no matter where it comes from ( LLC or Scorp).Both LLCs and S-corp is a pass-through entity, this loss flow to you the same way and carried forward.

I am highly concerned that the previous owner just slapped some paint on the walls to cover issues and while it's not hot and humid now, summer time could prove to be a disaster if I have an underlying problem.So thoughts, opinions, ideas?

But I guess this is subjective to the individual wholesaler themselves, shady ones don't care much about the seller, or know about the market, good ones want them to get the most they can get and know what that is. 

I could be wrong, but of course, consulting your accountant/tax strategist may shed some additional light on the subject.

When I sold my house, I accepted an all-cash offer with a 10-day escrow (DEFINITE money) rather than a subject-to-financing offer with a 30-day escrow (MAYBE money).Because I sold in a hot market (San Francisco Bay Area), all of my best offers were cash, but I didn't accept the highest cash offer because there were red flags my realtor pointed out.