What is the typical short sale buying process?

After doing over 100 short sales in Atlanta, my process might be different than what you might be told but it has worked extremely well for us. However, before I answer the question I must say that each bank handles their short sale slightly different, so i'ts important to know what to do whenever you find the right deal. We market the property to get an offer and THEN submit a complete short sale package to the lender with the offer. From there a bank requests an evaluation called a broker price opinion (BPO) to figure out how much the home is really worth. After they (the bank) gets this you can start negotiating and it's important whether you are a home investor or a real estate agent that you know the process is for each bank.

What are the best ways for home buyers to find short sales to buy?

Short sales are typically listed and they are dwindling in numbers. Real Estate Agents likely don't want to do them anymore so you could definitely market to them. Another angle is to look for a Notice of Default lists. Ideally you get a list of people who are 60+ days late. Some states publish this information and others require you buy it from a list seller.  Ultimately it's likely easiest just to work with a buyer's agent to look at the MLS.  In the event that you find a short sale on your own, you would still need an agent as part of the short sale process in most cases.

What are the best loans / mortgages to use to finance a short sale?

Any loan would technically work. The easier the loan is to do (a 20% down conventional for example) could be ideal vs a harder to do FHA.  The reason is that sometimes the short sale lender will only give you a short period to complete the short sale, so loans that take a while can make the process more difficult.  In addition, some short sale lenders only allow a small amount for closing costs so if you are getting a costly loan it might come all out of the home buyer's pocket.  If you're a first time home buyer then I'd recommend steering clear of trying to any part of this on your own.

Who are short sales best for (from an investment perspective)?

Short sales are often a better deal than retail but not as good as a foreclosure. For that reason I think they are good for rental properties investors or buyers trying to do a "home hack" where they move in, renovate (after the sell), enjoy the home and then sell for a profit.  You can search for Atlanta Distressed Properties here.