The incredible number of foreclosures are a massive problem for banks and communities around the nation. However, the current mortgage crisis is a golden opportunity for any investor looking to start making money with short sales.  It would be a shame for anyone who has the ability to invest in property to miss out on this once in a lifetime chance to make something good of a bad economy.

Though we know that this year has seen astonishing number of foreclosures, we'll point out a few numbers so you can get an idea where this is all coming from.  In the first quarter of 2007 a total of 437,498 foreclosures were filed. According to Realtytrac.com, this is an increase of 100,000 foreclosure filings compared to the first quarter of 2006. The President, Congress and the Federal Reserve working to solve the problem and heal the economy, but it’s still slow in coming.

In the meantime, any real estate investors can turn these rising foreclosure rates into a golden opportunity to start making money with short sales. It's easier than ever to buy distressed properties in short sales deals, and flip them with minimal renovations for a high return.

High Foreclosures Mean Lots of Real Estate...

According to realtytrac.com in 2007, the states;

·       Georgia

·       Nevada, and

·       Colorado

reported an average of one foreclosure filing for every 75 households. This is three times the national average of pre foreclosure properties and this year more properties than ever have entered the market.

What's more, according to Realtytrac.com, these states;

·       California,

·       Florida and

·       Texas.

 have reported the largest totals of foreclosure filings in the country!  It really is a buyer's market out there.  California reported a record number of 80,595 foreclosure filings in the first quarter of 2007.  The state with the second highest amount of foreclosures, Florida, came in with 45,156 foreclosures in the first quarter.

What Caused the Mortgage Crisis?

Many experts blame this foreclosure crisis on the practice of sub prime lending and a poor economy. Subprime lending, also known as 'near prime' or 'second chance' lending, basically involves gving homeowners mortgage loans with much higher rate loans than average.  These higher rate loans usually go to homeowners with:

·       poor credit,

·       low incomes and

·       other problems that make it difficult to get standard loans.

These potential homeowners usually have a harder time keeping up payments on their mortgages because of lower income and other debts.

As you can imagine the large numbers of foreclosures has created a problem for the banks. Banks do not want foreclosed properties. They simply don't have the time or interest to maintain these homes in order to sell them. Plus, banks must keep enough cash on hand to cover that mortgage should it foreclose entirely on every single one of those  400,000+ pre foreclosures. That’s millions, even billions of dollars that cause the banks to loose profits and even fail.
 

How You Can Start Making Money with Short Sales

The banks want a solution to the problem.  Either they want you to get rid of these properties and mortgages or have the homeowners pay up those bad loans!  It's easy to negotiate great short sales with the banks to pick up these pre foreclosures at a discount.

The credit crisis that's been looming for the past three years has finally exploded on the economy and the real estate market. As the governement and the other creditors eventually adjust to create more realistic market conditions, you can expect the number of opportunities for short sales on foreclosed properties is going to increase.

Making money with short sales is an excellent way to take advantage of these foreclosures. By negotiating with the banks on short sales deals you’ll be able to pick these properties before they are foreclosed on, and you’ll be helping the homeowner avoid bankruptcy. However, you'll have to jump in sooner rather than later, because the market will eventually recover and the deals just won't be as easy to make anymore.

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