How do you make money on no equity properties?

[Lee Allen]

I get about 10 calls a week from sellers that have no equity in their houses that need to sell. Most Realtors or investors won't touch these deals. Is there any way to make money from these.

I am an agent and I have considered adding seller financing to get these deals to work.

Here is a sample deal I run into.

House is worth $170,000
Owner owes $167,000
Monthly payment is $1325
House would rent for $1200

Should I advertise it in the MLS for $185,000 and Seller Will Finance. Many of the same houses in that area are being liquidated by banks for $155,000.

I have considered taking the $5000 that a tenant/buyer would put down and then just letting the buyer pay the seller directly and hope that the seller pays the underlying loan.

Is this to risky?