The dramatic increase in foreclosed homes can spell disaster for many a home owner, but real estate investors are reaping the benefits, while at the same time offering distressed home owners a way out of their predicament. Foreclosed homes offer the savvy investor a way to purchase homes for pennies on the dollar and realize tens of thousands of dollars in profits.

The "sub-prime" mortgage crisis has been very much in the news as of late, and is a main reason for the recent surge of foreclosed homes. The reason for this is that these types of mortgages offer adjustable rates which can fluctuate over time. When the home owner purchases a house at an attractive low rate they often become unable to make their payments when that rate unexpectedly increases. This leads to foreclosure.

Whatever the reason that the homeowner is unable to make their normal scheduled payment, the lender has the right to seize the home and sell it off in order to pay all outstanding debts. The lender who seizes the property is typically desperate to sell - after all, the mortgage debt may have sat unpaid and collecting interest for many months or even years. Many times the lender simply places the seized home on the auction block and sells it off to the highest bidder.

Investors have been making money in foreclosures for many years, but the opportunities presented by today's foreclosure market have never been seen before. The sheer number of foreclosed homes means more opportunity to buy homes at bargain prices than ever before. It's not just single family homes that are being foreclosed upon - condos to multi-million dollar income properties are all available to foreclosure investors.

The high-end executive homes that go up for auction are much rarer than the more middle-income homes, but if found they can prove to be a huge money maker. A single high-end home, bought and resold by an investor, can earn that investor more money than most people earn a year. In fact, many seasoned real estate investors focus solely on executive properties, easily earning them six or seven figure incomes each year.

No matter what type of property you intend to focus on, it's important to realize that investing in foreclosed homes is not a get rich quick scheme. It takes patience and due diligence to ensure that you find the right kind of property, and the knowledge and know-how to sell it for a profit. It is important that new foreclosure investors take the time to learn the ropes of the foreclosure market so as to avoid the most common and costly investment mistakes.

There is plenty of free foreclosure investment information available online, particularly lists of foreclosed homes. Use these lists to get an idea of the kinds of properties you're interested in purchasing for investment. Consider joining a real estate investment club in your area or even an online forum for real estate investors. Take advantage of their shared experience to guide you in the right direction. A community of real estate investors will lead you to the information you need to succeed.

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