I know a guy that does this, and has as a side project for a while now.

You need to know your way around the registration rules where you live, and in neighboring states.

You also have to typically get your dealer's license so you can attend and buy bikes at insurance auctions.

In my buddy's case, he will buy bikes at insurance auction in a neighboring state that does not require the ins. company to re register the bike before auction. That way, if the insurance company totaled the bike they don't have to slap a salvage title on it. Then he can buy the bike with a clean title before rebuilding. Since he's a dealer, there is some way he can avoid having to plate or insure the bike while he is rebuilding and reselling.

Remember, if you were doing all of that as a private party, you'd be responsible for registering and insuring the bike while it was in your name.

Since it is at auction and he can look the bikes over before buying, he stays away from the worst damaged bikes, as he isn't interested in parting out, but rebuilding.

 

Another thing he has pointed out, is that with so many companies buying up bikes and parting out on ebay as their business, the price for replacement parts has gone up a good bit over when it used to be private parties parting out. But, he states that the selection is better, and he typically has some recourse if something wasn't in the condition he expected, or is not the correct part.