If you catch these at the pre-foreclosure stage as slow pays or initially in default all the better as the bank has less in collection expense.You can still work out a discount but even buying at the payoff it can be profitable depending on the property value.You can practically force a lender to sell as it can fully indemnify them as a full payoff as demanded, continuing with a foreclosure becomes a rather vengeful act by the bank to punish a borrower, they don't want to go there.

I also do consulting from time to time to share how leverage and build a profitable holding company or fix/flip entity.

In an oversimplified view, revenue of $1,000 and expenses of $1,000 offset to $0 and you made no profit...yet.

With a passion for finding undervalued properties and transforming them into profitable assets, they are eager to learn, grow, and build a successful real estate portfolio.

Currently own a STR thats been profitable for almost 3 years now and in the midst of a Live-in Flip.

So there is no discount or profit to be made. 

small profit Lessons learned?

For traditional loans that rely on personal income and DTI (Conv, govt), there is no requirement that the properties be profitable.

Even if your GC is decent was able to get your job done in 100 days, if it doesn't resemble the comps in quality then your 300k exit is now 270k and with all the exit costs and holding costs your 40k expect profit is now under 10k. 

Take a look a look at the RPAWi. org, which is our local non-profit landlord association located in Milwaukee.