I've been meaning to comment on the real estate market, which is going up or down depending on which financial publication you read or TV news channel you watch. I'm not sure we're out from under the sub-prime lending mess, but real estate prices seem to be stabilizing and that's good news for homeowners everywhere.

One area that people keep asking me about is foreclosures. Specifically, some folks think it's a great investment opportunity. Let's take a look. According to the real estate data firm RealtyTrac, the total number of foreclosures on homes in the U.S. skyrocketed 90% from May, 2006 to May, 2007. In the latter month alone, foreclosures totaled 176,137, up 19% from April, 2007. Those numbers are showing no signs of slowing down. Those numbers should spell opportunity. "After a barely perceptible dip in April, foreclosure activity roared back with a vengeance in May," James Saccacio, chief executive officer of RealtyTrac, said in a statement.” Such strong activity in the midst of the typical spring buying season could foreshadow even higher foreclosure levels later in the year," Saccacio added. "Certainly not every community nationwide is seeing an increase in foreclosures, but foreclosed properties are becoming more commonplace and adding to the downward pressure on home prices in many areas." RealtyTrac said there was a national foreclosure rate of one foreclosure filing for every 656 U.S. households during May. California, which saw its foreclosure activity rise by 30% from one year earlier, Florida, Ohio, Arizona, Georgia, Michigan, Indiana and Connecticut were at the top of the list of states hit by foreclosure increases.

So how does the average Jane or John Doe get in on the foreclosure action - - especially at a time when so many opportunities are available in the foreclosure market? First off, getting involved is easier than you might think. Some people seem to think you need tens of thousands of dollars in down payments, pristine credit, and/ or a real estate license to get involved in real estate in general, and foreclosures in particular. Not really. In my personal experience – and I’ve made some good money in real estate -- foreclosures are both simple to understand and easy to execute as an investor. In fact, you can use as little as a few hundred dollars to buy foreclosure properties and resold it weeks later for a huge profit. Not always, but a lot of the time. Plus, the people you're buying from need to cut a deal. Why? Because, among other things, you’re dealing with motivated sellers, a negotiation atmosphere tilted in your favor, and a targeted market that is fairly simple to learn and understand.

Here’s the skinny:

1. Great deals. There is no better way to buy a property at a deep discount. I’ve seen thousands of foreclosure properties that were offered for as low as 50 percent below market value.
2. Extremely motivated sellers: With foreclosures, folks have to sell -- today. Consequently, with such a short deadline to sell before lenders step in and take over the property, sellers will accept a significantly lower price.
3. Quick deals: Lenders are in the business of making loans and not holding real estate, they want to cut a deal - - and fast. And, because you got such a great deal on the property, you'll have little problem flipping it quickly and easily.
4. Odds in your favor: Do your due diligence, i.e., knowing the local property values, and check out the house before you buy, you are well positioned to turn a profit with your foreclosure property.
5. Rise in foreclosure listings: As I listed above, the amount of foreclosures is rising fast. Consequently, there are many free foreclosure listings available, many of which are updated very frequently. Focus on web-based foreclosure listings, local real estate agents, and local newspaper listings.
6. Quick, easy credit: The banks and homeowners are looking for buyers for pre-foreclosure and foreclosure properties, even if some folks don’t have a great deal of upfront capital or strong credit. A bonus: because you can flip the house so quickly, you may not even need to take out a mortgage.
7. Low or no commissions. Foreclosure investors normally do not have to deal with a real estate agent, thereby saving more money – how about several thousand dollars in commissions?

On the negative side, you really have to be diligent and investigate properties you may want to buy. And you'll also need some avenue to financing - - either yourself, another private investor, or a professional lender. Oh, and if you are the type who can't sleep at night when your money is at risk, foreclosures may not be for you. Otherwise, foreclosures have potential for smart investors. While the real estate market is strong in many areas, no corner of the market is stronger than foreclosures. Motivated sellers, low entry costs, great deals, and little or no commissions? What’s not to like?