I decided to take action based on some common knowledge.

Since the collapse of the economic bubble in 1991-92, real estate prices have fallen 50% for residential and 80% for commercial property in Japan. Combine this with pressure on banks to unload bad debt, stubborn deflation, rising personal and commercial insolvency, an aging population, among other things, and what you have is a growing opportunity to take advantage of judicial court foreclosures to pick up distressed real estate property in the country at bargain basement prices. Foreign investment groups like Ripplewood Inc.among others, have at this time already bought about 200 golf courses from Japanese companies forced into bankruptcy along with condominiums, office buildings, department stores, resorts, railroad lines, and the list keeps getting bigger all the time.  The same thing is happening and will continue to happen individually on a smaller scale. 

So knowing this, this was the conversation I had with myself, and the answers I found.

Q: Don't I need a lot of money to start with? 
A: NO!  They (the Pros) do it with a lot more money to start with, but they make a lot more too.
Q: Do they know something I don't know?
A: Of course they do, they are highly trained professionals well funded and organized with tremendous resources at their disposal.
Q: Well,...  is it possible to do something like what they do, only on a smaller scale?
A: Yes, anybody can buy distressed properties in Japan.
Q: I see...Then why doesn't everybody do it?
A: They do, they are called professional real estate agents, they do it for the money.
Q: How can I compete with them?
A: By knowing more than they do.

Aahh...so!  I wondered if a gaijin individual could do the same thing without so much cash to invest on a smaller scale. I decided to give it a try because the financial risk is small in comparison to the potential gain (a place to live).

HOW TO DO IT  (or at least what we did)

In our local, the newspaper lists all properties and their location that have been processed by the court for the month. This usually comes out the last Friday of the month in our prefecture. We noticed one property listed in our small village and decided to investigate it. We went to the court house and asked to see the file on the property we were interested in. The clerk informed us that we could see it and that we were allowed to make photo copies if we so desired. The court had records of the type of debt, a diagram of the property, the full names and address of the current owners, photos of the outside of the property, along with copies of registration documents and other particulars. In our case the property was 800 tsubo of land (about 2500 square meters - a little over a half acre) a large old farm house, several out buildings, a garage and a recently built small home separate from the main house. Also listed  will be how much the minimum amount for a bid to be accepted will be. In our case we put down just a little over the minimum amount and it was the second time it had been auctioned. It was not desirable for the pros because people were living in it at the time, so would have to be evicted. Then if you want to put a bid in on it, you have to fill out some forms, but they aren't difficult, then put 290,000 yen as a deposit into the court's bank account. If your bid is successful this amount is applied to the purchase of the property and if not successful, it is returned to you. Then you put your bid into a box and wait to see what happens. I just told the court officials that this was my first time and they walked us through it. They were helpful enough.  I had to submit a 'gaijin toryoku kisai jiko shomeishou' from the city office which proves I have permanent residency. We put our bid of 1.5 million yen in the box.  We went to the opening of the box 'ceremony' at the court house, it was very interesting because of the reaction of the 100 or so people present when my GAIJIN name was put up on the board as the winner,  but you don't have to be there. The property we bid on was valued at 8 million yen by the court (very conservative) and we got it for what we bid on.

THE DRAWBACKS

There are of course some disadvantages with this method. 

1. You have to be able to speak, read, and write the local language, or know somebody who does.

2. You have to have legal permanent residency (not to be confused with citizenship).

3. You cannot look inside the property you are interested in bidding on. You can ask around though about what sort of shape the interior is in. We asked relatives of the residents and they pretty much gave us the straight scoop. You also cannot haunt around the outside (this might cause the residents 'stress').

4. You may have to compete with professionals. They will bid up the price if it is a valuable (to them) piece of property which means it can easily be resold for a good quick profit. 

The professionals downside is your upside which means that if it is tedious or difficult to realize a quick turnover on the property, the pros will avoid it. This means you as an individual could pick it up and make use of it easily and cheaply,  but probably not quickly because it will involve the snail like court system.

Anyone can obviously go the proper route and buy something from a reputable real estate agent and legitimate lending institutions. What I have said here is not meant to be taken as a recommended route in opposition to the standard methods. They do work, and I would even say could be a better way to go for the sake of convenience and hassle. The method I chose to go was an alternative legal route given my circumstances and means. Most people would probably not have chosen this way under any circumstances. It is meant for those who wish to take a bigger calculated risk for possibly larger gains in the end. Again I stress 'possibly'.  It is also very possible to make a big mistake going this way. I say again it is vital, as in most things, to do your due diligence and KNOW about the property you intend to bid on, at least to the knowledge level of any professional that would possibly be competing against you. Or ask someone to do it for you if you can't. If you enjoy the challenge, as I do, where you definitely have the disadvantage, the satisfaction is even greater.