If you have seen the skyrocketing foreclosure rates lately, you have probably thought the housing market was off limits as an investing arena. Reports last week said that foreclosures in the 4th quarter of 2007 were the worst in US history. What if there was a way to start investing in those foreclosures? There is. By investing your time in helping those facing foreclosure get out of their mess, you can also make a profit.

Not everyone realizes how little the banks like the idea of foreclosure. Many people think banks don't care one way or the other what happens with the real estate market. The truth is as the housing market continues to stay weak, banks are having a tough time as well. They don't want people to default on their mortgage payments. Every failed mortgage and subsequent foreclosure is not only going to leave a ding on the credit of the homeowner, but also on the bank's credit rating. That's not something they're fond of. For this reason, banks are often willing to help things a little bit on what is owed on a mortgage, through a short sale strategy, in order to get the property off their books without a negative credit hit.

This means smart investors, like you, have an almost endless market of individuals who need help getting out of a mortgage, especially if they are facing foreclosure. Good news is that you can help the homeowner, while also making a profit. The way to do this is to learn about short sales. Homes going into foreclosure are pubic record. Instead of seeing them lose their homes, a savvy investor will pick up the phone, call the trouble-plagued homeowner and offer to assist them in getting rid of their real estate. You can then help them make a deal with the bank that will allow them to sell their house and have the money to pay the bank, the real estate agent's commission, and you.

You should get either a set fee or a percentage of the sale for your part in the process. There is paperwork and footwork you'll be investing, and you deserve to get a fair price for it. The homeowner will be happy to pay your fee since you have just been the hero who helped them get out of a seemingly bottomless pit of debt.

When considering getting involved in short sale investing, there is some research to be done. The rules for using this strategy will differ from state to state. For example, states such as Texas and Georgia are strict and have very tight time frames. There is a month, or less, in which to act, from start to the time the home goes into foreclosure.

California has a 3 month and 3 week timeframe. Oregon has a 4 month period while Washington and Colorado are 3 months. Other states, such as New York and New Jersey, are much more lenient giving folks over a year. Some Mid-West states, like Michigan and Indiana, can have very long waits and redemption periods. This allows homeowners to buy back the house after foreclosure. So if you buy a foreclosure there you may not be able to do anything with it for awhile.

Check with a realtor in your area for the exact timeframe. Work with realtors. They can find you choice properties and assist in getting things done correctly and in the right order.

Thanks for the ear and have a great day!

Bill

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