They are not sueing me yet but I want to know what is my liability in this circumstance.

You can qualify for FHA as long as there are mitigating circumstances on the short sale...

I am taking it as getting to know what I believe fits me and my circumstances. 

There has been a new development in that one applicant is a newly employed carpenter coming from the Women for Trades (or something to that effect) who is employed by a green female builder who is building ADU's (4 going now) in the Portland market.

FEDERAL TAX LAWS; (B) SUCH DISCUSSION IS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING BY THE COMPANY OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

It just depends on your circumstances.

@Tyler McKendry Putting all you cash into the property and leaving no cushion for unforeseen circumstances is definitely risky.

And by CITY, I am NOT talking about small towns, I would never look at any city under 10,000 population, except for very unique circumstances..While it is getting more difficult to find deals, there are still many deals out there, and EVERY WHERE! 

Women tend to have a better sense of smell.

@Christopher Rogers  I think it depends on your circumstances and risk tolerance.