Buying a house short sale is one of the most lucrative ways to make money in real estate investing.  Using this method to buy houses and hold or flip them for profit normally involves getting the home far below what it’s actually worth on the market.

One of the most common ways to buy a house via short sale is to purchase it from someone who is going through a foreclosure.  The idea is to get the house before it is foreclosed upon by contacting the lienholder and negotiating a deal that is well below what is actually owed on the property.

For example, let’s say an individual or family currently owes $100,000 on a mortgage and they are on the brink of foreclosure.  You could contact the lender and work up a deal where you would buy the home for $50,000.  The obvious goal is to get the property for a low price and to either wholesale it to an investor or fix and flip it yourself.

You may be thinking that banks are never going to sell you a house for half the price of the current mortgage but you will be surprised at what they will do.  The simple reason for this is that most banks are not in the real estate business.  They are in the money business and do not want to hold a long list of foreclosed properties on their books.

This goes against their basic business model and they need to lend and transact money not houses.  Based on that, banks are often very keen to negotiate the short sale of a home rather than have the hassles of foreclosing and then selling the home later.

There are some simple basics that you need to know before negotiating these types of profitable deals or you can just partner with a real estate investor that specializes in these types of money makers. A good place to find partners is by joining local real estate investment clubs and attending their meetings or by finding similar clubs and forums on the internet.  (Free webinar on how to flip houses).

Learn more about buying a house short sale and how to do wholesale real estate.