Point being - you don't know what you don't know about what you are buying at foreclosures - so you are getting that discount for taking that risk.I would also point out that at 8% interest - VERY LITTLE cash flows well.  

Items you will be asked for will be:Address:Purchase Price:Rehab budget:Estimated Term needed:Estimated ARV:Square Feet:Configuration (Bedrooms, Bathrooms):Rehab short description:Explain why this is a good deal:Your history in real estate (including number of flips):Any other comments about the project:Include a Property Data Sheet (MLS Listing, FSBO Ad, Auction Listing, etc)Also include a minimum of 3 Solid Sales Comparables – preferable realtor generated*Once all of stage one above is sent in it can take up to 24 hours for approval to move on to stage 2.Stage 2 on the following page.1Page 2 of 2-Stage 2-After initial review we’ll need the following items sent to processing (Note: all costsat this point are your responsibility & don’t guarantee funding):Inspection from a professional inspectorBPO or Appraisal (Please see guidelines below for a BPO)REPCDates: Inspection Period, Settlement DateDetailed Renovation Budget from 3 contractors (please tell is which contractor you feel best about using)More info may be needed as we move forward, it depends on the best structure for the deal*Once all of stage 2 is submitted in will take a few hours to review and if everything is approved it can take upto 10 business days to close.BPO Guidelines:Please do not use your buyer’s agent to do the BPO.

The agent isn't probably negotiating a steep discount with a builder. 

We added value by re-doing the whole house, installed vinyl floorings, rebuilt 2 and a half bathrooms, re-painted the whole house, replaced all the hardware in the house, installed new lighting, ceiling fans, re-painted the kitchen, and completely remodeled the upstairs.

IE pull the cash out of it so I could go buy more timberland to log.. get payments from my buyer .. pay the bank their payment then when my buyer cashed me out I cashed out the bank and got my equity... for me it was not as much a tax play as a get stuck money out now without massive discount to a NOTE buyer pimper .. who is looking to get notes with massive discounts. 

For example, adding a bathroom can increase your home's value by 10-20%, depending on the quality and type of bathroom.

Been at it for 5 years now, and absolutely love it, a lot of kitchens, bathrooms, floors, a few decks, and a couple compete basement finishes.

If there is no real estate agent involve we provide the 2% discount back to our customers or we are happy to pay the buyers broker such fee.

So they can get a discount rate?

If there is no real estate agent involve we provide the 2% discount back to our customers or we are happy to pay the buyers broker such fee.