1. Bid Online - An alternative is to bid on websites which update their listings of foreclosure properties as much as twice a day. Whether you are a mediator, dealer, home buyer or financier, these sites have all the information you need. The search functions are advanced, allowing you to just click on a map and you can then browse through the listings displayed. Many sites allow you to search their database for free for a week. Review the top foreclosure sites online now for a wealth of resources to get you started.

2. Take over the seller’s loan. If the loan provisions permit it, you can make the payments the seller was supposed to. The seller will be happy as it will keep him away from foreclosure and being a buyer you can continue with the same loan without having to put up with additional fees for processing a new loan and the time spent (making sure of course, that this is allowed). Veteran’s Administration loans are known to give you this kind of flexibility. Be prepared though, these stipulations want you to bring the load current, and depending on how far behind the owner is, you need to have sometimes as much as $100,000 cash on-hand.

Foreclosure properties, Real Estate Owned (REO) properties in possession of banks or other financial institutions or properties that are on the verge of foreclosure are an immense opportunity for those wishing to purchase property as an investment.

Three reasons people are investing

Like most investments with high returns, foreclosure properties are not for people who would be content to let their money earn one percent in a savings account. There is a risk, but the rewards are such that the risk can certainly be worthwhile! Especially if you do your due diligence and research, the results can be outstanding. Here are three reasons this is a good time to invest.

1. The downturn in the economy has made this a perfect time to buy foreclosed property. This is a fantastic opportunity to jump in if you want to get into foreclosure investment. The rewards, however, only go to those who know what they're getting. You need to make sure that you know what a good value is in your local market and know the condition of the property. Others are buying too, and the way you're going to come out on top is to be smarter. Your best best is to educate yourself, and by utilizing one of the top foreclosure listing services online, you can learn just what you need to know before you jump in.

Be sure to find out all the information you can about the property. Is it still occupied? How is the condition of the structure? Be sure you know as much as you can. It's not just newbies that are competing against you. There are some who have been buying at auctions for decades. These people can be very smart, so be careful.

2. Even with the competition, you can find great properties for unbelievable prices. Foreclosed homes are sold at a discount, which can vary from 5% to 15% or more. This is a perfect deal for smart investors. With a good property you can turn a nice profit, or turn it into a rental property.

3. Buying a foreclosure can help the neighborhood. When a home sits empty for months and months, it can become an easy target for vandals to break into and wreak havoc, not to mention a breeding ground for rats and other vermin. A blight like this brings down property values all over the area. When a foreclosed house is bought and made to look presentable again, the whole neighborhood looks better. Then when you sell it, it gives the new owner something to be proud of.

These and many others are good reasons to invest in foreclosures. It can be a great way to invest your money. But, it's not something to be taken lightly - you'll have to spend some money to get the home ready for sale. You also have to account for the possibility of not being able to sell it as quickly as you might think (especially in today's market–and depending on your area). You may even need to become a landlord and rent it for a while. But when do sell it, the profit will make it worth all of the effort.

Finding Ways to Fund Your Purchase of a Foreclosure Property

Just because you don't have $200,000 sitting around in your savings account doesn't mean that you can't take advantage of the foreclosure market. Here are three ways of getting the seed money that you need in order to profit.

1. Leveraging (partnership). A partnership can be a great way to share the risks and rewards by pooling you money with other people. If you have $50,000 and can find three other investors with $50,000 each, you'll be able to invest $200,000 in a property. Not having to pay a bank or mortgage company's interest makes is it easier and more lucrative all around. Plus, when you show up at an auction, you must have a cashiers check. Since you organized the deal and did the research you can rightfully get a larger share of the profit. The investors only needed to put up their money, but they'll be happy because they made a profit, too. MAKE SURE you use an agreement that is rock solid, you should have a lawyer draft one for you before attempting this.

Remember, people won't throw their money in with just anybody. You need to gain their trust by having a good credit record and some trustworthy references who will attest to your ethical character. Your partners need to know that they are doing business with someone they can trust. By partnering with you they are trusting you to keep their investment safe and turn a profit. Additionally, you probably should not attempt this method until you have a few (or more) successful buys under your belt. You're not going to find many partners to throw in money, if you have no experience. A GREAT way to get experience is to take advantage of the many reputable free online seminars in foreclosure buying. (Follow this link, then scroll to the bottom of their page.)

2. Equity line of credit. If you're a homeowner right now and have good credit you may be able to qualify for an equity line of credit with which you can finance the purchase of your foreclosure property. This is essentially a second mortgage based on the equity you have in your current home. Unlike a second mortgage, though, the bank will give you a checkbook and will not insist on knowing what you are spending the money on. Interest is charged only on the balance that you've used. You can have this ready and waiting for the right property to come along, one that passes all of your tests. BE CAREFUL though. Depending on where you live, the downturn in your local market could affect YOUR home value. You do not want to end up owing more on your home that it is worth!

3. Pledged Account Programs. In this type of loan, either you or a willing friend or relatives pledges money they have on deposit to a lender for collateral on a no down payment loan. The pledged funds and interest earned still belong to the person who pledged them. But, the pledged funds secure the loan and lower the lender's risk. This is usually a very short-term arrangement, as the people pledging the money won't want their money tied up forever. If you are unable to sell the property quickly, you will need to refinance at a fixed rate. You will then be able to rent the property and your tenants will be making the mortgage payment until you can sell.

Beyond these three options, there are other creative ways to fund your purchase of foreclosure property. You can check with your bank or credit union to find out what options they offer. Or, better yet, visit some of the excellent online forums, make contacts, and discuss options with seasoned buyers who have already "been there".

When you have a client in pre-foreclosure, dealing with their (understandable emotions) can sometimes be cause for worry. But, if you arrive prepared, knowing how you will direct the meeting, then things can go much more smoothly.

First of all, make sure you have all of your paperwork in order. Know which documents you will present first, and why. This way you won't fumble. They need your confidence and assuredness, after all, they are placing a lot more than just their trust in you.

Second, make sure you have a notary lined up and ready to go. Closing the deal is crucial.

Third, make SURE you have done your deed research. You can easily obtain all the information you need at the county recorders office.

Westmoore Inc. in Anaheim Hills is suing Ed McMahon for more than $275,000 that it says the former “Tonight Show” sidekick owes from a 2006 loan, reports the Associated Press.

Although the lawsuit was only just filed, he and his wife had defaulted on the loan in early 2007. More proof that the foreclosure process in California is excruciatingly slow.

Mr. McMahon's financial troubles have been widely reported in the media. Many scratch their heads when hearing about the financial trouble he's in. It's hard at times to feel compassion when someone so famous, and obviously in a position to earn great sums of money over a long period of time, goes broke.

His publicist Susan DuBow said he broke his neck in a fall and couldn’t work.The AP reports creditors say the McMahons also owe money tied to prescription drugs, credit card debt and attorneys’ fees for their daughter’s divorce.

The lesson here is simple: don't live above your means, or lives as though your means will last forever. Save and invest!

Even the BBC is talking about the foreclosure crisis in the United States.

Of course, those of us at home know that foreclosures are on the rise, we only need to look around our own neighborhoods.

According to the BBC report:

More than 272,000 people in the US received a foreclosure notice in July, a rise of 55% on a year earlier, according to analysts Realtytrac.

Florida and California had the highest rate of foreclosures, figures showed.

In a further indication of the severe problems affecting the US housing market, more than 77,000 homes were repossessed in July.

As a result of this increase, 17% of all homes for sale in the US are repossessed properties.

What does this mean for investors? Well, for one thing, there's a market glut. Where once competition was fierce for good-condition foreclosures, there is now an abundance of stock in many areas, particularly in California (especially Southern California) and Florida. I am watching a certain city in Southern California and have noted that many homes in pre-foreclosure and foreclosure have been untouched by any potential buyers, and the homes have gone all the way to REOs.

There are a lot of would-be investors anxious to buy, and their lots out there to buy. It's best the you take one step at at time, take care to learn the process AND the pitfalls, before you jump in.

Reducing risk when buying foreclosures is important. If you're hoping to make a wise investment of your time and money, then paying for a home inspection is a no-brainier.

As a best practice, you should always pay for a home inspection when you buy a foreclosure. It's not required, but it's a must-have risk reduction tool. Depending on whether or not the occupants are still there, you may or may not have active utilities for the home inspector to test. It's a good idea to see if you can have the utilities turned on, so that vital systems (like pipes, plumbing and water pressure) can be checked.

In addition to major systems, a home inspector can gain access to see what shape the structure is in. Many times if a home has been empty for some time, there can be issues of vandalism, or the former occupants could have carried off the bathroom toilet! (You just don't know.)

Best practice is to always get an inspection.