Just because the housing market is horrible for some and great for others does not mean there are capital gains opportunities in high-yielding Real Estate Investment Trusts (REITs) for everyone. While the idea of making money is good, foreclosure investing might seem appealing but there is a downside. In many cases, foreclosure buyers are seen as the vultures of the real estate world, profiting from others' misfortunes. "There is well a deserved stigma associated with this from the old school of thought, If done honestly and professionally, the process can be a win-win for both buyer and seller.

What is a pre-foreclosure property? It is a house whose owner has gone into default on his or her mortgage payments but one which the lender has yet to repossess. This, according to industry insiders, is the crux of all foreclosure investing. "You are able to leverage an exclusive deal with a motivated seller, before the competition knows about it."

For those who like putting real estate deals together, without being a total financial specialist, the pre-foreclosure system maybe the launching for most. However training is still critical. Trying to figure out someone's financial picture in a few minutes is not the goal. The better real estate training focuses on how to explain why the homeowner selling their house is a good option for you and them.

The training involves the important critical step of how to figure out all the costs involved: repairs, selling, commission, insurance, taxes, title, and escrow fees. At that point, you're ready to approach the bank and test the waters to see if that price matches expectations.

"If you structure the deal in the right way, the owner gets a fresh start and cash at closing. If there is no action, the house would be foreclosed and his credit would be ruined. Investors get a below-market purchase, and they help a homeowner."

The opportunities for those hoping to get into this line of investing have never been better. Foreclosures were up 30% in the third quarter and are nearly double the rate they were a year ago. In fact, August and September had the two highest monthly foreclosure filing totals.

P.S. If you haven't signed up for my Free Short Sale Course yet, then you are really missing out, go here: http://www.freeshortsalecourse.com/

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