I own a mortgage branch and I work with a money of investors.  They constantly make money on these deals so I finally decided that after all the years of them asking me if the deal made since and them making the money, maybe I should just go for it.  I have this complex idea I am working on.  So here goes.

There are some areas that are south of Downtown, they are really crappy but people live there.  I know you don't normally want to flip homes in these areas but I think it can work.  There are a bunch of boarded up homes in the neighborhood and homes that have been forclosed.  I know I can buy a bunch of them for less than 20k each.  They can appraise for 60-90 after repair.  Because of the neighborhood I know we will be selling to less than desireable clients.  My thought is to sell to people with really bad credit and just carry a second on the property.  We will make some money on the first at 80% and then have the second to sell to an investor or to hold.  If they don't pay we have a lein, if they do, we make more money.  The typical deal would work like this  purchase the house for say $20k, rehab for $15k, closing costs on hard money $5k. total of $40k.  home appraises for $70k, we sell it for $70 and the buyer gets lets say a loan for 80% with a 20% seller second.  we get $56k at close $16k profit, and we still have a $14k second that can be paid or sold.  I really feel like I can't lose doing this, what do you think?  Thanks.