Also, what are the pitfalls to avoid when buying a short sale through the banks or a motivated seller?

That inspired me to start buying rental properties because I saw how many benefits there are (as long as they are managed properly) I joined the site to learn the hidden aspects of real estate that can be easily overlooked by someone just starting off.

There's also some provision in the IRS code to avoid this tax if you are insolvent.The lender (actually, the investor who holds the loan, which is most likely someone different than who you make your payments to) will indeed write off the bad debt.

We are considering using a lease to purchase or something of that sort, in order to avoid an extra mortgage payment.

There are no programs or options that will allow you to avoid paying taxes on the difference between what you currently owe and what the lender eventually nets.What if you offered it to an investor in your area?

What does the seller need to avoid bankruptcy?

I have been totally slacking on the whole networking aspect of investing.

I would not go as far as to say that flipping, rehabbing, etc is not investing, but Tracey makes some very valid points and I agree.Buy and hold is the single most reason of wealth creation and when done correctly. can provide not only the net worth aspect, but a passive income stream for life whereas flipping and the like require an onging effort to retain an income stream.I think it is the very best way to start, although I also agree one should do a few "flips" (which can be a wholesale deal, sell a contract, rehab project, etc.) to gain some capital for buy and hold acquisitions and reserve accounts.

My wife and I will of course get the benefit of learning from people who have "been there, done that" and be able to possibly avoid the longer learning curve and pitfalls of roughing it on our own.

Both have more pleasant and less pleasant aspects.