Curt and Suzy shared good information, but you may want to consider a subscription with The Santa Cruz Record, www.santacruzrecord.com. They are a local company that provides regular updates on records related to, among other things, notices of default and foreclosure auctions. As the other pros mentioned, buying a property at foreclosure auctions will require a high level of due diligence and cash.
You may want to consider a listing notification service that will keep you informed on all of the new listings in Capitola including short sales and bank owned homes that are listed on the MLS.
For more detailed information, or a personal consultation, you can reach me at 831.227.5700.