What specifics to look for in a good pre-foreclosure deal?

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Hi,

I'm looking to buy my first home, but instead of just buying to buy, I want to make a profit out of the situation. I feel like my best chance here is in the pre-foreclosure market because I have enough cash to purchase the homes I am looking at (or should I be looking elsewhere?). I live in the Metro Detroit area (Macomb County), so there are plenty of fresh foreclosure listings every week.

I would ideally like to pick up a property for 50-60% FMV, fix it up, and live in it while trying to sell for a profit. If I do sell it, great, I made some extra money and gained a lot of experience. If it don't sell it... I will get the enjoyment from living in it and will get the benefit of not having to pay taxes on the profits that go into my second house when I do finally sell.

I have been scouring the foreclosure listings every week, but am kind of stuck as to what exactly I should be looking for. I've read tons of real estate investing books over the past three years, but don't have much real experience. What makes a potentially good pre-foreclosure deal?

Mortgage balance at or above FMV? (get the deal from the lender)
Mortgage balance 20% below FMV?
Mortgage balance 50% below FMV? (get the deal from the owner)
Mortgages with high interest rates? (don't care about their credit?)
Mortgages with low interest rates? (want to preserver their credit?)

If I am dealing with the lender, it seems pretty cut and dry. I have read a lot about short sales (although I still have a lot to learn) and I think I would be able to pull one off. What are the typical success rates of them? Are most banks willing to take a huge cut so they can avoid the foreclosure process? On what types of properties would I have the best chance of success?

However, if I am dealing with the owner, how do I convince them to sell me their equity for 50 cents, 30 cents, 20 cents, or even 0 cents on the dollar?

I would love it if anyone that has successfully bought pre-foreclosure properties could chime in with some advice.

Thanks!