In some cases, there will be a plausible reason why the homeowner wants rid of the property, for what ever reason like: he is on the verge of bankruptcy or there is an illness in the family which makes in necessary to move quickly.

Actually, you are better off to invest in real estate today more than ever, and the reason for this is that not only are the housing prices low, but the mortgage rates are lower than they have been in decades.

Markets like Southern California, Las Vegas, Phoenix, and Florida are seeing prices that could drop to 50% of highs of just 2 years ago, and cash out buyers are now coming in and taking properties at near 50 cents on the dollar in some places.

Foreclosures look bad on the banks record, and lenders often agree to take less than what is owed, because they really don’t want to repossess the property, and that creates more equity for the investor who purchases the property.

In the event that a homeowner can’t bring his mortgage up to date by paying the lender any money that he is behind on, or agreed upon, the property will likely go to public auction where it will be sold to the highest bidder.

Do you really want a tenant living on your property that has a history of being a credit risk and who habitually doesn’t pay their bills, and maybe didn’t take care of the house either.

Owning long term positive cash flow rentals is not as exciting as flipping properties but once you own enough of these you can relax and not have to buy another property, where as a real estate flipper has to continue the buying and selling whether the market is good or bad and has no choice.

Will you be able to handle maintaining the property for the length of time it takes to sell and can you afford the taxes & insurance & vandalism while the house is vacant and, if so, do you have the cash reserves to cover possible damages, over and above the fixed costs you will have.

One of the highest risks a real estate investor can take is letting the previous owner come back and reclaim their property because they misunderstood whatever agreement you had made with them.

Real estate is a unique investment and the way to make money in the real estate market is to invest in either partially or unfinished constructed homes or cheap foreclosures and/or distressed properties.