Are pre-foreclosures always so discouraging in the begining?

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I started doing the whole pre-foreclosure thing about 6 months ago. I am an agent with a local real estate broker here in seattle washington, I have sololey concentrated my efforts on pre-foreclosure properties.
I am a very hard working individual, and dont expect anything to be handed to me. It seems Im either missing a huge piece of the puzzle here, or it just takes a lot of time before anything starts to happen. I had one short sale I did myself with wamu and almost got it then the owner filed chapt 13 and backed out of the deal. I have been sending thousands of letters I wrote after reading some marketing books and usually get about 2 calls per 100 letters. I have also hired some people to knock on doors and gotten a pretty good response. The main problem is alot of these people want to stay in there home. This becomes very frustrating because I know that scare tactics and hard selling these people usually dosent work. The other problem is that people want to file chapt 13, and from my experience lawyers are pretty much deal killers. That said, I guess these are my main questions.
1. Do real investors even consider these people to deals?(or worth there time)
2. Is there other steps I am missing to find good deals?
3. At what point do I need to erase the lead when the person keeps putting me off( but is still friendly)
4.what is the best way to combat people that want to stay in the home?
5.what is the best way to combat the ones who want to do a chapt 13 ?