You need an engineer more than an attorney on that.The short sale will be rather straight forward, it's a principal reduction not really a SS as homeowners would go through, you should be able to review the buyer side without much concern.If you have legals on each lot the development headaches are pretty much over.

Inventory level has increased whereas reduction in prices are widespread now.

I run anywhere from 50-80k in just overhead realtors taxes/recordation on both sides and interest (using a line of credit at 4-6%} and you need a fat spread to cover those costs.

Like you stated, it was in their best interest because they mainly rented to low income people who eventually were conveniently evicted due to loss of employment, welfare reduction, lack of child support (I could tell a horror story about my neighbor regarding this that involved missing cs checks....but that's something I cannot prove, only a bad feeling.)Regardless, it definately was a bad experience and I refuse to rent ever again.

But I love what you call "difficult-to-fix problems"... those are great for getting huge reductions in the price...

Next, IOs aren't made as often on a long term basis, you may have renewal fees and be looking at future LTV requirements with no principal reduction.

Property has been for sale for 2 years now with a price reduction every few months.

Do you foresee any reduction in Sec 8 due to sequestration?

The second already gave rate reduction.

The plan in motion now is we have trimmed all the fat in the personal finances and are now beginning to bank sufficient cash to float my family so I can then have two or three of these properties at one time to ultimately do one big cash out refi in a portfolio.