A seasoned real estate investor needs to bear in mind all possible contingencies and accordingly keep their monetization and exit options open. Despite the "best laid plans" there is never any guarantee of a deal working out exactly how we may have originally envisioned it to work out, so having multiple exit strategies is recommended for any pre-foreclosure or foreclosure investment.

Accordingly, before deciding to invest, it's a good idea to be aware of the "big picture". At any given point of time, property in general may be skewed towards either a "buyer's" market or a "seller's" market. While pre-foreclosures and foreclosures are generally a buyer's market (since the home owner is being forced to sell), general market conditions and the competition for local properties may limit your bargaining power when it comes to either making an offer on a pre-foreclosure or bidding on a property at a foreclosure auction.

Recently, the U.S. property market has suffered a downturn, giving investors greater negotiating power with regard to pre-foreclosures and foreclosures. However, just as you may be able to buy pre-foreclosure and foreclosure properties relatively cheaply, the downturn in the property market also affects your ability to sell such properties at a desirable price.

Again, the advantage of buying a pre-foreclosure or foreclosure is the ability to buy the property at a significant discount to its retail price. Regardless of whether or not market values have fallen, the retail price will ideally still be higher than the discounted price you paid for the home. Therefore, you should still be able to sell the property and make a profit. However, if market values are falling rapidly there is a chance that the retail price will be lower when it comes time for you to sell.

Another monetization strategy that may no longer be viable in a falling market is rehabbing and fixing - where you invest substantial amounts of money in improving a property in order to sell it. If the retail value of the property has fallen substantially, you may end up in a situation where you have overcapitalized the property - i.e. you have spent more money on improvements than the corresponding increase in value.

I do have some good news though! If you have chosen your pre-foreclosure or foreclosure property wisely you should still have options other than selling in order to make a profit. One obvious option is renting out the property. Typically, since more people will be looking to rent during a property downturn - particularly after a record number of foreclosures - rental yields go up as property values fall. So you could end up earning a good income from your property if you choose to rent it out.

The bottom line is that keeping your monetization options is important from the point of view of being able to exit, and profit from, your investment regardless of the market conditions. Get more details at www.insiderpreforeclosureguide.com/7secrets

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