The surest way to enjoy profit from your real estate investment is by finding the best deals. At present, the housing market is full to the hilt with foreclosed properties as a result of the foreclosure crisis. Although many consider this an unfortunate consequence of the mortgage mess, a growing number of investors and home buyers are glad for the profitable investment opportunities it brings.

Distressed homes sales, which include foreclosures and short sales, have continued to account for a large percentage of the total home sales. It is not surprising, simply because given a choice of buying a cheaper home, a buyer would most likely pick the one which offers him more savings and return potential.

It Is Always About the Location

Ask any seasoned real estate investor and you will be advised the same thing when it comes to finding the perfect property to buy – choose the right location. Considering the current housing situation, you would want to look at states or cities hit hardest by the mortgage mess, but are already on the brink of a housing pop. There usually lie the sweetest deals.

For example, a breakdown of the total California home sales for the month of June showed 35 percent involved foreclosed homes while 17.6 percent were short sale transactions. Median sales price declined from $270,000 recorded in June 2010 to $253,000. From these figures, it is clear distressed homes are generating much buyer interest, which should not be surprising, considering California has always been a favorite among investors for its beaches and laid back lifestyle.

So, if you are looking to find the best deals, simply go where there is a huge inventory of distressed houses for sale.

Going Around the Tight Lending Requirements

Home buyers and investors with enough cash to pay for a distressed home are lucky since they will not have any problems dealing with the tighter lending requirements being imposed of late. But if you are like most buyers who will need to apply for a mortgage loan, you might find it more challenging than before.

What you can do is to make sure your credit score is high enough and you have an impeccable credit history. All your financial documents should also be in order and ready for submission. You should also have enough money for a 20 percent down payment, which most lenders require nowadays.

It is indeed a lot of hard work. But you can always think about the considerable profit you stand to gain if the purchase is successful. That alone should keep you motivated.

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