The land trust "guru" is Bill Gatten. Check his web site at http://www.landtrust.net
They have a large, active bulletin board to provide advice and guidance. Also, his 3-day seminars give you a lot of information.
Another land trust proponent is Bill Bronchick. I haven't heard him speak, and his use of the land trust isn't as elaborate as Gatten's. He's very active at http://www.creonline.com
Land trusts are very safe if done properly, but very dicey if done incorrectly. (For example, in a land trust, you do not want the trustee to be one of the beneficiaries of the trust.) So make sure you're working with someone, or some organization, that really has experience in land trusts.
The basics of using a land trust with a short sale would be:
(1) Find short sale candidates, as you're doing now.
(2) Find prospective resident beneficiaries. (The ultimate buyer.) (You'd do that similar to finding people for a lease option: Run ads in newspapers, CraigsList, distribute fliers, network in real estate clubs. An ad might be something like: "Rent-to-Own. Bad Credit OK. As little as 3 payments moves you in. 3 bed/2 bath in West Wichita. Call Tony at 555/555-5555."
(3) Create a land trust for the short sale property.
(4) Once you acquire the property via a short sale, move the property into your land trust. You're now the sole beneficiary of the land trust. There's a third party trustee who actually owns the property. You're the beneficiary of the trust.)
(5) Find a resident beneficiary (See step (2), above.) This is someone who wants to buy the property, has some up-front money, and can make payments equal to the mortgage payments. The resident beneficiary has two roles in this. First, as a beneficiary of the trust, they get to deduct the tax and interest payments on the property. And they have the right to purchase the property at fair market value. Second, they are leasing the property from the trust. (So, if they default, you remove the tenant via an eviction...as a tenant...rather than through a foreclosure, as an owner.)
(6) Ultimately, the property is brought out of the trust and sold for fair market value. The resident beneficiary has first rights (in this scenario) to buy the property. And although it's sold for fair market value, the trust has been structured to provide some equity to the resident beneficiary (similar to option credits in a lease option), thereby lowering the effective purchase price.
That, in a nutshell, would be Gatten's approach to using a land trust with your scenario. (For anyone familiar with the PACTrust or NEHTrust, yes I know I've greatly oversimplified the process. I provided LandTrust's site information, for more details.) This is not something you want to do on your own. You need the right documents and the right structure.
If you have any more specific questions, please feel free to post them.
Hope that helps.