Met this lady yesterday....

[Herm M.]

....and she explained to me how she is making a killing right now.

I want to see if this is the same method that a lot of you are using. I haven't had time to read all the forums here, as I'm focusing on getting investors for a big purchase.

Here's what she does:

She's a realtor that finds short sales. As the realtor, she negotiates an approval with the bank for the lowest amount possible. She aims for 70%-80% of FMV. Once she knows what the approval amount is, she looks for a buyer at 50k higher than the approval amount. She considers the buyer serious once they have submitted to her a purchase offer with a loan approval. She has cash on hand, and purchases the property from the bank at the approval amount. She then flips the home to the buyer who offered 50k for.

I'm looking to start working with her, since she has cash and I don't. Here's my questions:

1) Is this what a lot of the investors here try to do?

2) How can she get away with not forwarding the buyer's higher offer to the bank, and basically saving that offer for herself after she becomes the owner?

3) How long does it take to close escrow when she buys the property cash?

Here's a scenario:

My uncle purchased a condo for 505k, loan amount 450k. Lien-holder is Chase (previously WaMu). The property might get appraised at 350k (just a guess). My uncle is looking to get out of this property. I am going to have this agent list the property as a short sale. She is then going to negotiate the approval. My guess is that we're going to aim for about 275k on the approval. Then we will look for a buyer at 325k. Once we have that buyer, she will purchase it cash for 275k, and flip it for 325k.

So my question is this: When the house is listed for short-sale with Chase being the owner...the new purchased will submit the realtor an offer of 325k with a loan approval. So how does she get away with not forwarding this offer to the bank?

Is this what a lot of you do? I read one of the threads that had the rule of "always have your buyer ready." Is that rule referring to this type of investment strategy?