More than a million homeowners are in default on their mortgages and about 10 million more are upside down – owing more on their homes than they are worth. Daily reports on CNN paint a grim picture of the current housing and banking situation. As real estate investors, we have an unprecedented opportunity to create real wealth for ourselves while helping homeowners who are desperately looking for an exit strategy from their homes without the societal stigma – and lasting credit damage – that comes from foreclosure. They’re looking for a graceful way to quietly exit stage left with their dignity intact before their lender takes it along with their homes.

As bad as the situation may seem for the homeowners, it’s even worse for banks. Every homeowner that winds up on the street due to foreclosure costs their lenders dearly – they face growing public scrutiny from Legislators, the media, and anyone with an ax to grind – and adding insult to injury, they have to set aside funds to cover their anticipated losses, which further reduces their ability to provide other loans and places their very futures in jeopardy.

Now there’s a new threat.

Foreign investment funds, many of them financed by record oil profits, are circling like vultures moving in for the kill. Their target? REOs. A handful of these investment funds have amassed more than a trillion dollars that’s burning a hole in their collective pockets, and they’re itching to snap REOs up in mega-purchases of several billion dollars at a time, hoping to pick them up for as little as 40 cents on the dollar. A number of these funds are controlled by some of the wealthiest countries in the Middle East, looking for yet another opportunity to turn a huge profit.

Individual real estate investors like you and me can secure our futures today, but only by acting now. These properties will go somewhere. These market conditions won’t last forever, and foreign interests with an almost unlimited supply of blank checks and favorable currency conversion rates are causing oil tycoons to take on the dual role of real estate mogul.

There’s a silver lining for homeowners as well. They’ll bounce back. Once they get their financial houses in order they’ll look to re-enter the housing market. As this happens, the historic real estate downturn could turn into a surging market as increased demand causes prices to escalate. The question is: how thick will your portfolio be when this happens?

Real estate isn’t a bag of Lay’s potato chips. So get all you can while you can because, unlike potato chips, they won’t make more.

Happy Investing!
Charrissa Cawley

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