On February 15, 2015, about 1245 Pacific standard time, a Scottish Aviation Bulldog MDL 120/121 experimental airplane, N706BD, sustained substantial damage as a result of a forced landing and impact with terrain due to a total loss of engine power near the Hayward Executive Airport (HWD), Hayward, California. The private pilot, who was the owner and sole occupant of the airplane, was not injured. Visual meteorological conditions prevailed for the proposed local flight, which was being operated in accordance with Title 14 Code of Federal Regulations Part 91, and a flight plan was not filed. The flight, which was originating at the time of the accident, was destined for the Palo Alto Airport of Santa Clara County (PAO), Palo Alto, California. In a report submitted to the National Transportation Safety Board (NTSB) investigator-in-charge, the pilot reported that after taking off and during a normal climb to about 200 to 300 feet above ground level, the engine quit producing power. The pilot stated that he pushed the throttle and mixture forward, checked the fuel boost pump, and thought the [fuel selector] was positioned to BOTH. The pilot recalled that during the emergency approach to land on a golf course, the right wing collided with a tree, which resulted in substantial damage to the outboard section of the wing. The airplane then slid about 150 feet before coming to rest upright. During the investigation, a Federal Aviation Administration aviation safety inspector advised the pilot that significant amounts of water was found in the fuel system after the airplane had been placed level. The inspector then questioned the pilot relative to when the airplane was fueled last, whether the pilot had experienced fuel contamination previously with the accident airplane, and whether the pilot had drained or sumped the wing fuel tanks prior to the day of the flight. The pilot reported he had not fueled the airplane since October 2014, that he had not seen water in the fuel over the last 14 years, and that he had sumped on the day of the accident. The pilot stated that maybe the nose up and level orientation had shifted the water. The pilot added that the airplane did sit with one wing lower than the other, that he had extended the taxi, and that he had waited about 5 minutes before taking off. Examination of the recovered airframe and engine by an NTSB Aviation Accident Investigator, revealed that the Lycoming IO-360-A1B6 remained attached to the airframe via all mounts. Information provided by the Federal Aviation Administration inspector, who responded to the accident site, revealed that he had disconnected various fuel lines from the fuel nozzles to the fuel flow divider, and did not secure them tightly. The top spark plugs were removed. The engine was rotated by hand using the propeller. Thumb compression on all 4 cylinders was obtained. In addition, spark was observed on all 8 ignition leads. Liquid was observed expelling from the fuel pressure hose fitting at the fuel flow divider. The liquid was captured in an empty, dry cup, and was a murky white color. The liquid was tested using water finding paste and was positive for water. The fuel line extending from the airframe fuel filter to the throttle body fuel control unit was removed at the fuel control unit. Residual liquid in the fuel line was captured and tested using water finding paste with positive results. The airframe fuel boost pump was turned on and liquid expelled from the fuel line. About 0.75 gallons of fuel was recovered from the fuel line before the boost pump was turned off. About one-quarter of the liquid removed appeared consistent with water; the remainder of the liquid was consistent with aviation fuel, and was blue in color. Examination of the airframe revealed that both the left and right fuel caps were intact and in place. The left wing was sitting in a left wing low position (left main landing gear was separated), and fuel was observed expelling from the left fuel cap, which was secured and appeared tight. The cap was removed and the seal appeared intact and was not cracked or hardened. Fuel samples were obtained via the left and right wings and were blue in color and free of debris.