They looked like someone poured motor oil on them in places.

The property was converted from an oil based heating to a gas based heating system.

Bakersfield is far from the bottom as prices have appreciated a good amount in the past few years, but pressure from oil industry layoffs have keep prices lower than other areas of CA (some of which are pushing all-time highs).

It seems to me that the Katy area is getting hit especially hard with the drop in home sales over the past year with all the layoffs in oil and gas.Sharon, I would love to get some lender referrals from you.

I imagine that during this lull in the oil market, I may be able to capitalize on both a value proposition and growth here. 

Sure if undisclosed it could be large enough to kill the deal but so will foundation issues, oil tanks, sink holes, unpermitted additions, easements, zoning or a host of other DD issues common with distressed properties.

I am also a subsea engineer on an oil rig and make 150k plus so the last thing I need is paying more taxes.

This is especially true in the over $200,000 market which is soft due to all the oil layoffs.Houston also seems to be the "in" place to be for investors from all over the country. 

When my proverbial oil well comes in, I would consider scraping and building. 

Mortgagor complaints: The mortgagor might find some defect in the property after taking possession, such as a leaky roof or rotten siding, an environmental violation such as heating oil residue, or a zoning or building code violation – and stop paying until you fix the problem.