There are many note buyers like my company that buy distressed residential mortgage debt then rework the loans with the borrowers into reperformance.

Also, what is the typical amount in the SF Bay Area when dealing with motivated sellers / distressed properties? 

We really prefer the idea of marketing to distressed/pre-NOD/late payments/pre-foreclosures (who also ideally have equity...), but can't find a good list to market to.  

There are a lot of cash purchases around the area because is a very distressed neighborhood.

Yes, 20% down will be needed, perhaps a bit more, mortgage insurance underwriting is tougher than what most lenders would accept.The property will need to be marketable as getting a fixer will end up requiring stronger loan qualification aspects.A property purchased at auction may or may not be a distressed sale, which means, while you may think you get a steal of a deal, what you pay could well be the market value and a lender will be looking at that for a purchase money loan or short term refi.

Strategy is buy distressed properties for cash (3 REOs and 1 estate sale so far) in "good" neighborhoods. 

I would like to target distressed properties, utilizing private money or HML, then sell, or refi if I decide to hold. 

It's seems just from appearance of the outside of the properties that this is a distress seller.

Knock on lots of doors and buy something from a distressed owner, like a 3/2 in a blue collar neighborhood.After much experience, some dollars in your pocket, lots of good stories to tell (Did I tell you the one about the little bald head guy who spent his $1,100 property tax money all on strippers, all in one glorious night?)

This comes into play with distressed property, because any time the bank releases a borrower from the deficiency, the borrower is taxed on the amount of forgiven debt.In the past, there was a tax forgiveness program issued by the federal government in 2007 that waived taxation on this “phantom” income.