Since the credit freeze is getting no closer to the thawing stage than the winter snow in Alaska, homeowners are having a tough time seeing a "sold" sign placed in their front yard. Most buyers are still unable to get conventional loans, and sellers are forced to lowering their prices to rock bottom. In spite of this, the inventory of homes grows high, and many are beginning to wonder if things will ever turn around. That is, except for certain real estate investors.

The Perfect Storm

Investors have been waiting for years to see a market like this one, and are taking part in a virtual flip-fest in most parts of the country. The amount of available bank-owned and short sale properties are at all time highs. These conditions have produced the ideal environment for anyone with access to quick cash. It seems the planets have lined up perfectly for these investors, as many are making deals and flipping homes as fast as they can hand out offers.

Traditional real estate investors are not the only ones benefiting from the current housing situation. Many people from the stock market are now coming over to the real estate game. These former stock investors get together and pool large sums of money to form Private Funding entities, and are providing short-term funding for many real estate investors who primarily flip homes. It's a marriage made in heaven.

Private funding works particularly well for these transactions. The investor simply enters into contract with the seller for a set purchase price, and then resells it to someone else at a higher price. Since there are actually two transactions taking place, a double closing occurs at the title company. The investor walks away with the difference. It's completely legal, ethical and in most cases provides a much-needed relief for the seller. Everyone leaves happy.

Flipping homes is fast becoming the norm again for many savvy investors. They have little at stake in the deal, and can make a considerable amount of profit on a single transaction. Depending on the price-range of home, it can be from a few thousand dollars to as much as 6-figures or more. Not bad for a few hours of work.

Considering how many homes that will sell for 50 cents on the dollar, and the predicted amount of foreclosed homes that will be entering the market this year, it appears the feast will continue for many fortunate investors for some time to come. Until banks stop requiring borrowers to come up with ridiculous down payments, as well as lighten up on their credit score minimums, the only sub-prime source for borrowers will be these very same Private Funding Groups.