Short sale, pre-foreclosure, REO – very familiar terms in today’s real estate market. In fact, recent statistics reveal a 23 percent increase in foreclosure filings from the last quarter of 2007 and a 112 percent increase from the first quarter. This translates to the reality that one in every 194 U.S. households received a foreclosure filing during the first quarter of this year.

Depressing numbers for America’s home owners, and for investors, undeniable evidence that opportunity is there. But investors beware, even in this buyer’s market. Be sure your intentions for your properties are in sync with the realities of this market climate.

If you’re planning a flip, can your property compete with the flood of inventory?

Can you rent your property if need be and realize a positive cash flow?

Have you padded your estimated expenses by 15%?

First time investors, make sure you’re ready to be savvy sellers. It may be wise to get professional aid in pricing and staging your properties for their return to the market. You’ll want to be very proactive with any strategy that can help minimize the carrying costs that slice into your profit.

Lastly, be wary of cash back investment schemes surrounding foreclosure - particularly involving properties that you don’t physically view yourself. Fraud abounds in this arena. Do your research thoroughly. If it sounds too good to be true – even in this buyer’s paradise – it most likely is.