For my deals I use a slightly modified version out of the DoW book.

(assuming a standard instrument that has a defined maturity date and is of record) The loan can be modified and the maturity date can be advanced into the future, which as long as it get's recorded will be five years from the new date.Just to recap, you have a UPB of $74k and a RE Value of $80k or an LTV of 92.5%.

One way you could modify this strategy a little bit would be to buy a SFR that would make a good rental property and move into it yourself for a year or so. 

However, these guru contracts are basically useless as they need to be modified by a real estate attorney licensed in your state.

Is it legal for me to contact borrowers directly to discuss modifying loans?

If I were Justin, if there were any money due to the seller after getting bank financing, I would either ask the seller to finance the rest and modify the terms, pay the difference in cash, ask an investor to spot the money, etc. 

Being a pretty regular note buyer of both 1st and 2nd lien non performing/performing notes as I invest in notes for a living, I could answer some of the following:I invest in every state except NY, NJ, MA, CA, IL(only Cook County)I always want to modify a non-performing note before I have to forecloseIf you show me notes that I have seen from another person, and you aren't the owner of the notes on the title, I will never deal with you again unless your a registered Broker/Dealer and your selling on someone's behalf.  

You can buy the note real cheap, foreclose on the property and rent or sell. ...Another alternative is buying the note at a discount, doing a loan modification with the borrower (so that the borrower is able to perform as agreed), and then collecting cash flow from the modified loan.

You will modify it over time to fit your needs... but again... not hard.  

How are you modifying your expenses?