Foreclosures are at an all time high and are growing daily as the financial meltdown gathers pace. Not a week goes by without some more bad news about write-offs by banks, waves of resets on adjustable-rate mortgages, tighter lending practices and deathly slow real estate markets. Even willing buyers are finding it hard to find a bank who will loan to them without significant money down and proof of high credit worthinesss. Most pundits are saying it's going to get worse before it gets better. I think they are right!

However I stand in this gloom as a real estate investor. So while Congress and the White House continue to look for ways to hold back the rising tide of foreclosures I see it as a time of great opportunity. I can help solve problems for home owners who are in trouble as well as the banks. The banks really don't want to own all this property. It's not their business, is a big distraction and ties up funds they can't loan out until they liquidate the asset.

From an inventory point of view, foreclosures have been hitting the middle and upper middle class that are normally spared so there are houses up and down the value scale and often in good condition. This makes them easier to sell. I have found that buying foreclosures is not for the faint of heart as it has its drawbacks and dangers. However if have done your research correctly, it is possible to find foreclosures at 30% and even 40% off the current depressed market value, but of course this number varies. But as banks take back more property as real estate owned (REO), the pressure to discount will be huge.

I rarely go to auctions as they are often cancelled without notice and I have competition. I don't like having to commit a $5-10,000 banker's check that will be non-refundable if I don't close. So I make my offers direct to the distressed homeowner, after finding out what the financial position is surrounding the home. By this I mean the amount of any mortgages that exist and the terms if possible. I do this by researching at the registry or going on line. As long as there is equity in the home, I make assumptions about the amount in default and construct an offer accordingly and show them local comps.

It's simply baiting a hook and if they are interested they call but to do this successfully you need to have accurate data about the property.