Oliver,To echo Jon's points, the short sale will prevent you from obtaining a fannie mae loan for a minimum of two years while a foreclosure will result in a five year wait before you are eligible for a FM loan.However, I doubt that the failure of WaMu will significantly impact your ability to sell short.

I agree loan mod's do not work, first of all most are not "modifing the loan" what they are doing is lowering the interest rate and payment and making the rate fixed for a priod of time (2yrs, 4yrs or even 5) the majority of this loan mod's the principal still stays the same so if person owed 600K on thier home they will still owe 600K at the end of thier agreement, now what about property taxes as far as I know you can not "modify property taxes" when a lender agrees to a loan mod. they will now include an escrow account and the homeower will now have a much higher payment with a new lower interest rate, what does this mean to all of us more short sales, now one thing I have not seen discussed here is the Mortgage Relief Act this is very important to keep in mind, according to the IRS this will end on December 2010, so let's a homeower can get a loan mod in 2008 and he loss his or job in 2011 the IRS says now you will get a 1099 for difference of what you bought to what the bank took it back at, what does this mean the howeower would have been better to have completed a short sale in 2008 so that could qualify not to pay taxes on the 1099 they got.

The world seems upside down . . . its great seeing a little agreement once in a while!

Is the monthly PITI able to be covered in lease option/owner financing with a minimum of $200 bucks cash flow (more is better obviously).3.

What occurred in our situation is the building was fully rented and in the purchase agreement there was a clause that one of the tenants would be given a 30 day notice that they would have to move once we closed.

Does your agreement say that they are to notify you 30 days before the tenants move out?

The verbal agreement was for them to help around the house, (Gardening, painting, etc.) pay rent ($500.00 normally $2000.00 for that home in the area) and their own utilities.

Hi Mike,You've got a lot in the way of questions so I'll take the first one and leave the others for another investor to answer.With a contract for deed you're entering into an agreement with the seller to purchase their property under whatever terms you're able to agree to.Pretend for a second that you have a house for sale and I agree to purchase it under the terms of a contract for deed by making payments of $1,000 per month for 10 years.

If the property were placed into an Illinois land trust, with a neutral party as the trustee, you could set up an occupancy agreement where #1The existing owner keeps his financing in place.#2 you have almost all of the rights as a homeowner (tax deductions, rights to dispose of property etc.)#3 the only way you can lose the property is if you do not make payments (at which point you either pay off the property or it goes back to the original owner.)#4 properties in a title holding land trust are not subject to the Due on Sale clause found in all mortgagesTo help the seller have more confidence in you, you can place say 3 months payments with the attorney/company that is the trustee.

While housing values will keep dropping for a minimum of another year or two (or five, depending on how deep this goes), inflation is about to run rampant.