This will be my first and DAMN ONLY serious post. 

Just to be clear, you are asking if you should (a) walk away with $20,000 or (b) take a multi-year 100 point hit to your credit and potentially be sued personally for any outstanding debts that aren’t extinguished by the foreclosure auction (depending on the rules in your jurisdiction)?

With my super sexy partner's face on those damn mailers. and I got like 68 leads.From these 68, I made one deal.

Historically San Diego is almost a sure thing at producing outstanding ROI. 

I found posts like this to be helpful when I was first learning about investing in real estate, so hopefully someone on here can get something out of it.Our goals were to cash flow $100 per month per door, have a cash-on-cash ROI of 12%, and achieve a total return of 20%.Purchase price: $179,900Our loan is a 30-year fixed rate residential mortgage at 4.25%25% Downpayment: $44,975Mortgage Payment (Principal & Interest): $663.75Operating Income$26,435 scheduled gross rents (4 units)$(1001) vacancy$600 garage rent$11 interest$26,045 gross operating incomeOperating ExpensesProperty Management (10% of gross rents): $(2543)Leasing fee for new tenant placement: $(550)Sewer: $(1397)Water & Trash: $(1232)Lawn care/mowing: $(350)Gas & electric during vacancy: $(228)City occupancy inspection aka government extortion fees: $(183)Maintenance & Repairs: $(3594)Property Taxes: $(2009)Insurance: $(983)$(13,069) gross operating expenseNet Operating Income: $12,976Mortgage P&I: $(7965)Cash Flow Before Taxes: $5,011Cash-on-cash return: 11%Equity Accrued: $2275Total Return: $7286Total ROI: 16%We hit our cash flow number almost exactly at $104 per door while our ROI and total return came in a little under our projections, but pretty damn close.

I originally cherrypicked 12 units at 450,000 contingent on any outstanding repairs needed .

This is 3% of the FMV of the property... not 3% of the purchase price or the outstanding balance.A standard home is going to appreciate $3,000-$5,000 annually in this area.

If a building has a 3 cap with the potential of a 4.5/5 cap than damn sure the price will be competitive based on the amount of "upside potential".

Its a short sale because they want to sell, the net proceeds are insufficient to pay off the outstanding debt and they don't want to bring cash to closing to make up the shortage. 

Then when I purchase them from the tax sale (because the company never pays the taxes) I have the owner calling me all upset because I sent them a $10k redemption bill & damn near have a come apart on the phone once I send them pictures of their cashflowing investment property that was trash.It just feels like some kind of fraud is happening......Not that I care.