Real estate investors who acquire and rehabilitate distressed properties are part of a true win-win economic boost. At first glance, taking a foreclosed property off of a mortgage company’s hand is a process that includes buying low and selling for a profit. And while that’s the case, there is another benefit that lifts all local boats. How is that?

First, when banks are saddled with non-performing real estate, their ability to make other loans is hampered. Banks are required to have a specific amount of reserves at the end of each business day based upon a variety of factors but one factor is how many loans are outstanding as well as physical real estate the bank owns.

Banks must keep a certain level of liquidity to meet their own reserve requirement and when a bank is forced to hoard cash to meet reserves, that cash can’t be used to make loans to local businesses, finance cars or fund student loans. When an investor buys a banks’ foreclosed property, the bank can pump more money into the local economy in the form of loans.

Another good deed that real estate investors do is greasing the real estate wheel. Foreclosed property is often in disrepair. So much so in some instances that a mortgage company will refuse to finance the unit. Real estate investors, using private money, acquire distressed real estate at a discount, completely rehabilitate the property to the point that the home will qualify for any type of financing such as FHA, VA or conventional loans. Without real estate investors, homes could sit in a state of disrepair until the property was ultimately condemned.

Real estate investors also provide an opportunity for other investors to earn double digit returns on their investment. Real estate developers need money to fund their projects and often the only source of funding is through private lending. Individuals can provide their own funds or pool with others to finance real estate investments resulting in returns of 12, 20 and even 30 percent or more.

Yes, real estate investors make money by buying low and selling for more. But in doing so, so many other lives are touched along the way. It’s about much more than just making a profit.