Residents of a California town are living in fear after learning the leader of one of Mexico’s most powerful and violent drug-trafficking organizations owns property on their street.

Juan Carlos Valencia Gonzalez, 41, who is on the lam with a $25 million bounty on his head, became boss of the notorious Jalisco New Generation Cartel (CJNG) earlier this year.

The violent group has been branded a “terrorist” organization by the U.S. Department of State.

Valencia Gonzalez inherited the cartel crown from his stepdad Nemesio “El Mencho” Oseguera, who was fatally wounded during a firefight with Mexican soldiers in February and buried in a gleaming gold-colored casket.

One of his aliases is “El Pelon” which translates to “the bald one” or “baldy.”

Hemet, 80 miles east of Los Angeles, is a historically agricultural city in Riverside County’s San Jacinto Valley, with semi-rural outskirts dotted with horse ranches and farmland.

Federal authorities are now attempting to seize the ranch. The cartel kingpin purchased the nearly five-acre dust bowl for just $250,000 in 2011 and it has since tripled in value.

A local horse trainer told The Post he was renting the property from the narco boss for $1,500 a month, making cash payments to the uncle who lives in Southern California.

The trainer, who would only identify himself by his first name Hector, nervously said: “I paid the rent cash to his uncle. I can’t say much because I don’t want to put myself in a dangerous position.

“I rented for about three years. I paid the rent every month and they left me alone. I don’t know any more than that. I don’t know what’s going.

“The uncle told me to leave two or three weeks ago. It’s been tough. Maybe they’re in a bad situation but I don’t know what it is.” Hector has moved his horses to another piece of ranchland nearby.

A local resident, Christian, who also declined to give his last name, expressed fear over the drug lord having property in the neighborhood.

“It’s scary,” he told The Post. “We were shocked when we heard. This is a very quiet area. Everyone minds their own business. It’s hard to believe that anyone from the cartels would be here.”

The Department of State is offering a $25 million reward for information leading to the capture or conviction of Valencia Gonzalez, who grew up in Orange County.

According to the Department: “CJNG, a designated Foreign Terrorist Organization (FTO), is among the most violent and dangerous narco-terrorist organizations in our Hemisphere, and poisons American communities with illicit fentanyl, cocaine, heroin, and methamphetamine.”

The DEA calls CJNG “one of the most prolific and dangerous drug cartels in Mexico.”

A dual US – Mexican citizen, Valencia Gonzalez stand 5 ’9” tall and weighs 170 pounds. His other monikers include “Bimbo,” “Pelón” and “R-3.”

Valencia Gonzalez’s mom, Rosalinda González Valencia, was married to El Mencho. His biological father was Armando Valencia Cornelio, a founder of the Milenio Cartel.

He is the half-brother of El Mencho’s three surviving children. The slain former cartel leaders two daughters also live close to Hemet.

Valencia Gonzalez’s biological dad Armando Cornelio was the founder of the Milenio cartel in the 1970s. His mother remarried El Mencho and was part of the “Cuinis” gang, the financial branch of the Jalisco Cartel.

Valencia rose through the cartel ranks and became one of the leaders of “Grupo Elite,” the criminal organization’s armed wing.

“We’ll be paying more notice to strangers in the area and keeping our doors locked,” another ranch neighbor told the Post. “How are these bad people allowed to own property here?”