Yes - you can buy property with bad credit and make money off of it by selling however you gotta have cash.
A friend of mine is actually investigating strategy on doing just that, however she’s only looking at properties that are on the Foreclosure lists via the county.
From what she’s told me, if you miss 1 mortgage payment (at least in Cook County, IL) your home automatically goes on the forcosure list and you can get it off if you make good on that payment within 30 days. Each home owner and their contact information is on that list along with the property and the address.
My friend is looking into buying property from the people who are on the 1 missed payment list (most of the time they just can’t afford to make the payments any longer because of illness, layoffs, bit off more than they could chew, etc.). She offers to buy the property from the owner (in essence take the remainder of the payments off that person’s hand) in cash with 10 to 15 thousand extra so that person has money to either put a downpayment on something else or at least get some money for their trouble, and then she assumes ownership of the property.
Here in the Chicago area where real-estate prices are out of control, she could feasibly buy something directly from the owner for $100,000 in Lincoln Park and then re-sell it to a real estate developer for 3 times that - everyone makes money (at least in theory).
Like I say - for this to work, you gotta have cash. My friend can do it because she doesn’t necessarily have cash, but she does own her home and can take out an equity loan or take out another mortgage to get the cash she needs. If the house she buys is bought and sold within a couple months at most, she can pay back the loan with minimal interest.