The other thought is, if she's not interested in dealing with potentially foreclosing I do basically the same thing, but instead she sells it to me sub2, then I sell it to an end buyer with a wrap around seller finance, so I have the right/obligation to foreclose if the buyer defaults. 

Great, thanks @Jim BlatchleyThat's what I was thinking - I think the default is calendar days unless the contract specifies business days. 

I can see those having the same default rates as credit cards or worse..

So, in a PN environment, let's say with minimal risk of default and delinquency what we would look to is the investment horizon (term) relative to the loan term or propensity to prepay.  

The best list is the one that makes money for you based on how you want work deals.I started by working foreclosures, which meant that I needed a simple way to eliminate all records that did not meet my minimum equity requirements (50% in my case...now).The strategy was simple: I mailed, knocked and called property owners in default prior to sale.Most of the problems are people problems, meaning issues between parties, as opposed to the soundness of prooerty structure. 

That to me sends up red flags of higher defaults.

@Shawn West I love land contract purchases, then rent or rent to own.DOS is not a concern usually, just make the payments on time and keep the insurance up.Each state has different repossession issues in case of default is SELLING on land contract.  

Employment history, debt to income, default judgements, etc.  

Thanks a lot, Question #1: The reason to purchase a home in default is to make a profit by getting the home at some what less than market value.

Well, misleading that owner, then having a contract that expires when they think you are buying puts you in default.