Making Money with Short Sales

[John Romero]

Hi Everyone,

I just attended my first local real estate investment meeting. It was a very good experience to meet others, as well as keep up to date with the latest trends.

The group leader, who is also a real estate lawyer did an excellent job explaining topics and engaging the group. He touched upon certain topics such as Short Sales and the majority of the people in the room were making good money with "Short Sale Flips". I understood this as locating sellers in distress and offering a below market offer on their home. Then negotiating with the banks to agree to the offer while you're soliciting buyers to buy the property you are negotiating for more money than you're buying it for.

They use transactional funding "bridge funding" to secure the deal, and make a quick dollar. For example

FMV = $100k
Offer/Agree to = $60k
Sell to buyer for = $70k
Turn a profit of = $10k

Supposedly, the investor never "Holds" the property for longer than a day or two. While they're working out the deal with the seller/bank, they're soliciting buyers so the same day they close, they sell the property and turn a profit.

Am I reading into this correctly?