Many people are either losing their homes to foreclosure or walking away because it doesn’t make sense for them to keep making expensive mortgage payments, when the house is worth less then the remaining mortgage. Currently 50% of home sales across the US are foreclosed homes. Although the real estate crisis is worrisome for homeowners, it is providing opportunities for families and investors.

Most real estate investors see this current crisis as an opportunity as it’s the perfect time to buy cheap and hold until the market returns to normal. “There are always opportunities”, explains Donald Trump. “When I first started out in Manhattan, everyone was saying what a terrible market it was”. It’s a good thing he didn’t listen to anyone else’s advice or he won’t be where he is today.

Many real estate experts including Donald Trump agree that now is a great time to invest in real estate and understand that pre-forecloses offer one of the best, if not the best, real estate opportunities.

The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.

When looking to purchase a pre-foreclosure you also need to pay closer attention to the macro aspects (I’ll cover micro aspects in a later article) of the property in order to limit your risk as much as possible. Some of these property macro aspects are:

- Look around the neighborhood to see how many homes are being foreclosed. It’s best that the house you’re considering for purchase is the only one facing foreclosure. Obviously the more homes in forced sale, the more likely the properties will depreciate.

- Ask around to find out what the average rate for rent is in the neighborhood and if it has changed lately. This will indicate if local housing demand is on the rise or not.

- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?

- Contact the local government to find out about any upcoming infrastructure plans. Plans such as new building permits, train lines, shopping centers and corporations establishing a local presence, would be a good indication of community growth.

- Consider the age of the majority of the population within the community. If the majority of the local population is seniors that own homes, that could translate into an excess of future housing as they move into elderly care facilities.

If these macro aspects all work out in your favor, and if the inspection of the house goes well, then chances are it’s a great opportunity for you to buy that pre-foreclosed home. When it comes to making a mint in real estate it’s all about timing and location.