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The basic idea is to look for a house that needs work and can thus be bought for a lower price. The buyer will then buy the house and do the majority of repairs themselves to save on costs, and then sell the house for market price. Many homes are available at a discounted price and with a little effort, they can be found extremely discounted. These deep discounted homes are often referred to as HUD homes. They are homes that have been foreclosed on, usually for default of payment, and will be auctioned off. Usually the minimum price is what is owed to the bank. If the mortgage lender is owed a hundred thousand dollars on a fifty thousand dollar house, then if the auction isn't very aggressive, the winning bidder could potentially walk away with fifty thousand dollars in equity...
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