The only problem is in some states you can forclose on the lien and the IRS steps in on the forclosure.

I would like to move more into flipping houses, just need to take that step.

From reading John's post I guess it is that is how I was calculating the 3% cash flow left over in my hypothetical.I really appreciate all of you pointing me in the right direction, my next step is to find out whether this idea is a legal 1 and then incorporate somehow the great feed back you guys provided, if anyone else has an opinnion please feel free to share it with me, thanks again to all for taking the time to respond.

For example, say you pick up a bank REO for cash on the court house steps for $50K, but the FMV on the property is actually $125K.

All appliances and garage door opener functioning properly.After you've done each room, step to just inside the front door and take a hard critical look.

I have no experience with short sales and indeed agree with Mike and will take it a step further to say dealing with banks can be a Pain In the A**.

Once I took a step back, I realized the marketing scheme!

Put a plan together and remember that even the longet journey begins with a single step!

As the junior lien holder you have the right to step in and bring the 1st current.

If there are fewer lenders then it means investors will have to step up their game.Third is the idea of seller financing and motivated sellers.