It’s a tragedy that many people are forfeiting their homes during this sub-prime real estate crisis. It was recently reported that foreclosures account for 50% of the homes currently being sold in the US. Even though many people are losing their homes, there are many others who can finally afford a home or are now investing into real estate and taking advantage of these discounted prices.

Donald Trump is a great example of someone who was investing in real estate during a downturn in the market. Now look at him! “There are always opportunities”, he is quoted as saying. “When I first started out in Manhattan, everyone was saying what a terrible market it was”. He admits if he had listened to the nay Sayers he won’t be were he is today.

Many of the top real estate investors, including Mr. Trump, now feel that this is currently a good time to invest in real estate by purchasing pre-foreclosed or foreclosed properties.

The main reason to consider buying a pre-foreclosed property rather then waiting until in becomes a foreclosure property is because that way you can buy it from the current owner. This will give you more time to inspect the home as well as developing a mortgage with the bank.

It is important to understand the surrounding community or macro aspects when purchasing a pre-foreclosed home. Here are some macro aspects to consider:

- Do you notice an extremely unbalanced number of foreclosures available in the area? It’s preferred that your pre-foreclosure deal is the only one in the neighborhood.

- Ask around to find out what the average rate for rent is in the neighborhood and if it has changed lately. This will indicate if local housing demand is on the rise or not.

- How strong is the economy at the town and county levels? Is the current employment rate growing or stagnating?

- Check with local authorities to become informed about any infrastructure projects that may be planned within the next two or three years. Things such as new buildings and highways being built or corporations moving into town can be a positive indication of future growth.

- Demographically if there is a high number of elderly people living in town who are home owners, then there could be an over supply of housing in the future, as they move in with family or nursing homes for care.

If you do your due diligence and find positive answers to these questions when considering a pre-foreclosure then you can feel secure that it is a good community in which to invest. Successful real estate investors buy discounted properties at the right location at the right time.