The crash of the residential real estate market is no reason to think that it is impossible to still make money in real estate. Even while the economy appears to be heading into recession, you can still make money in today's market.

Real estate is one investment that is needed by everyone. We all need a place to live. If you cannot afford to purchase a home of your own, you have to rent. One way to make money in a declining real estate market is to buy a home that is on the verge of foreclosure where the residents are still living in it.

By purchasing a home that is on the verge of foreclosure, you can allow the former owners to stay in the house and continue to make payments to you as their landlord. You can refinance the mortgage so that the interest rates are lower and the mortgage rate is much less than what the people were originally paying. You can help them out by lowering their monthly rent payment and allowing them to stay in their home until they can afford to either buy the home back from you or move on.

If they cannot afford to continue to live in the home, you can rent the home out to other people. The home will be a long-term investment for you as well as a tax write off. If you are planning on investing in real estate in this manner, make sure that the home is located in a desirable area. Property values are more stable in the most desirable areas. When the market rebounds, your home will be worth a lot more than you paid for it.

In many cases, a person who is on the verge of foreclosure has no idea what they can do to help themselves. If they have children who are attending a nearby school, they may not want to uproot them. You can help them, and make a wise investment, if you purchase the home before it goes into foreclosure. By negotiating with their lender, you may be able to purchase the home for less than the loan amount. This is known as a short sale.

Helping people, who are on the verge of foreclosure to be able to stay in their home, as well as have the potential to make you some money, is a win-win situation. You will have made a solid investment and they will most likely take care of the home. Also, they will be able to avoid having a foreclosure on their credit report. A foreclosure on their credit report will make it almost impossible should they ever want to buy a house in the future.

Source Doug Digs Real Estate

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