5 Ways to Invest in a Declining Real Estate Market

This is the beginning of a lucrative market for investors. The US real estate market has proven over the years to be a sound investment, even in both booming markets and surprisingly, in depreciating markets. It has been a steady performer over the long haul, and now with a significant dip in property values, it's quite notably the single greatest decrease in values we've seen in decades. Good profits from investments can be made in real estate. Both individual investors purchasing in small scale and multi billion dollar investment firms have the opportunity to make great profits. The changing real estate market is proving itself with dropping prices. Investors with foresight should take the opportunity to cash in on available deals. Here are a few ways investors are making a profit in this present day market.

1) Use a realtor to help purchase properties at wholesale. Realtors can be made a part of your wholesale purchasing team. It's a numbers game when purchasing houses to rehab and retail for profit. You will have to make hard money, line of credit or cash offers until you lock in on a wholesale purchase. For those with limited money, "hard money" loans are used for leverage and buying power.

2) You can wholesale properties to investors. You can put properties under contract and wholesale them to investors or pre-qualified home buyers for a profit. This is done by collecting a list of wholesale buyers. When you get a property to wholesale, you can pick up a phone and call your list of buyers as soon as they pick up a deal to wholesale.

3) A "short sale" is a popular way for investors to wholesale properties to their buyers. This is a process of negotiating with the bank to purchase properties at discount. Sellers often take this direction to prevent going into foreclosure. Banks do this to avoid the costs of paying attorney fees and the headache of foreclosure procedures with the homeowner. Investors can do this one at a time or in volume. There are many instructors who specialize in short sales.

4) One of the most overlooked forms of making money and by far less risky is to be a "finder" of deals. There are different ways to be a finder; you can find an investor who has access to funding and connect them with a motivated seller. If a deal is done, you make a finder's fee for putting the two together. The fee will range from $500 to as high as $5,000. Keep in mind, the larger the deal, the greater the fee! Always get your fee agreement in writing prior to introducing the buyer to the seller.

5) Currently, the highest compensation is for capitalized investors purchasing bank owned property (known as REO.) These properties have already been through the foreclosure process and re-owned by the lender/bank. Due to the changes in the real estate market and influx in foreclosures, some lenders need to sell off their large inventory of properties in the shortest amount of time. As a result, they can be purchased in bulk at steep discounts.

Large numbers of defaulted loans, record numbers of foreclosures, increased bank inventory or re-owned bank property all contribute to the significant changes in the real estate market. Over the last year, the media has focused on sub-prime lenders, mortgage companies and credit unions having financial difficulty and many going out of business. It's a good time for investors to look for opportunities with prices taking a down turn.