What would you look for to gather paper losses and a nice risk-adjusted yield?  

I have criteria on the types of properties I purchase, but again those can be adjusted based on the actual numbers of a property.

I already have my own plans but they will need some adjusting based on square footage and layout I would like.

I can only tell you from personal experience that I wasted many hours of my life looking at properties and listening to "gurus" because I did not have an identity. 

You'd adjust depending on everything that needs to be replaced....brick or wood siding, central A/C vs window units and baseboard heat, carpet vs vinyl flooring, etc.  

Easy to adjust.  

A kitchen, two bedrooms and a bath identically laid out on both floors.

Here is the #Original loan: $132,000.Original rate: 7.5% adjustable cap at 13 %.Monthly payment: $925Amount owned stsince default: $80,000Current Loan + default amount = $189,000Current status; in Foreclose, Bank said we can send in offer for short sale.Current Zillow est. property value: $140,000Est.

Don't start adjusting what you need/want to do or your exit plan to accommodate a seller that wants more than a property is worth.  

You are welcome to post the same content in both places -- your site and your blog here on BP, but Google doesn't love seeing identical content in multiple places.