If there is a downside to 7a loans, it is the fact that they come with adjustable rates.While don't think you'll have to worry about prime going high enough to impact your loan, you "can" refinance to a fixed loan if need be.You mentioned 4 years in the your response, but you should only have a 3 year prepayment penalty (if that's what you were referring to) and the percentage reduces each year (5/3/1) making it pretty painless to refinance by year 2 or 3.

Personally I like keeping my expenses down to a minimum as I don't want my lifestyle to impact my investing, like your investments have to feed your lifestyle.My investment stratergy is I stay in the cheapest primary residence and then I buy other houses so would be close to the rent dirt cheap to free up cash.

func=view&catid=6&id=2048 And in terms of personal impact, in my opinion, there's also nothing to worry about.

In my opinion, you should further research the foreclosure impact on your ability to borrow.

You said they're in a good area, and owners willing to finance, these also have a great impact on what someone will pay, owner financing almost always brings a premium, unless its a distressed seller.

There is a homestead exemption that's nice and some relief from sales tax recently installed for homeowners.Worst impact has been the point of sale assessment -- killing alot of deals, especially investment/commercial transactions.

Those are properties that aren't traditionally rentals although they will have a big impact on the market.

Assuming they are unable to get a modification and unable to make up the missed payments and fines/fees they will benefit by:1 Not being embarrassed by a foreclosure2 Getting out from the debt of a property that has grossly devalued (upside down)3 Will have less impact (on their credit) than from a foreclosure4 Won't need to worry about a deficency judgment5 No out of pocket fees for selling the house.What is the possible "upside" to not taking short sale?

This is a tough market and *all* professions are hurting.Not certain how familiar you are with Short Sales, however keep in mind they will impact your credit negatively.

I'll say it again, if you truly believe this is inevitable and you understand the economic impact of your scenario, you'd be selling all of your real estate right now...so, either you don't believe what you're saying or you don't understand the ramifications of what you're saying...I'm willing to bet on which one it is...