foreclosure investing, big risk, big rewardsAs foreclosures experience a boom, some real estate investors are wisely purchasing distressed properties, even in your own neighborhood. Investors do some minor rehabilitation and then quickly put the houses back up for sale.

By just a straightforward process like this, the investors end up pocketing double digit profits, explaining why foreclosure investing is skyrocketing of late. These investors have been branded the name of 'winnable investors', due to the tactic they use to increase their wealth in this complex market of real estate. They are always on the lookout for ‘Flip This House’ deals.

In a normal year, houses actually get auctioned at the county courthouses. However, as a result of the malaise that has infected residential real estate markets, the number of houses being auctioned has skyrocketed to double digits. Nevertheless, even with this boom, foreclosure investing still applies the same mechanics it used in the past, putting real investors at an advantage. Due to their courage of trying out their luck in the time consuming, risky and difficult process, they are able to target the high returns harbored in this sector of the market. Anytime a property owner loses his or her home to foreclosure, what happens next is they have their property auctioned off publicly in an environment that is usually chaotic and in the presence of bank representatives, onlookers and lawyers.Proceed with caution Once the folio number has been called, interested buyers bid on the property and the whole process is over within a few minutes, with the property being transferred instantly to the new owner. The purchase is often made in cash.

Generally, foreclosure investing assures real estate investors as high as 30% or more return on the investment made. However, the investor must understand that the property is disposed as is. So, if there is a family currently living at the house, the investor must launch the eviction proceedings immediately. In some cases, the buyer also risks buying a house that is in need of serious repair considering that inspections are rarely arranged before the auction. In addition, if the house has another mortgage on it, you can expect that no one will remember to tell you that. In short, while foreclosure investing has a high potential of generating immense returns, the fact is that it is not to be tried by novices. Before you become an expert investor in foreclosures, you must do intensive research and be knowledgeable on how to throw your fishing net where the waters are deep.

The least lucrative, yet an easy way in which you can make investments in foreclosure is purchasing the property once the bank has repossessed it. Nowadays, finding such homes shouldn’t be difficult as lenders are keen to list the repossessed homes online where large auctions are later organized. This is perhaps the best way to reap maximum benefits from the skyrocketing foreclosures.

by Sherlin Lindsay - EquityBuild News Contributor