Yes, we have all heard about the foreclosure rates.  We have all heard about the subprime industry woes, because of the lax standards for qualification of payment affordability after the loan adjusts.  We have also heard about big investors pulling their funds out from subpime lenders.  But, how can all this be an advantage to a smart real estate investor?

• It is easier to get good deals, by buying foreclosures, or purchasing from owners who only know traditional ways to sell a property.  This can be by using traditional mortgage loans, or some of the creative ways to structure the purchase by using some of the methods below.  Most important is, to buy at a discount.

• Rentals are, or will be more in demand.  If you professionaly self manage, or have a good management company do it for you, the benefits will outweigh the drawbacks.  Guidelines for this can be found in my previous posts: Rental Housing Heats Up, Avoiding Disaster in the Rental/Landlord Business,   Pros and Cons of Owning Rental Houses    Is It Possible to Become a Millionaire Through Real Estate Investing

• When selling a property, the wise investor will offer some, or all owner financing.  At times it won't be needed, but if a credit crunch continues, it may be the only way to sell a house.

• Use options with leases.

• Offer subject to purchasing.  This is taking over payments already in place.
  

• If the house is free and clear you can offer straight owner financing with a call or balloon.

• Or offer to carryback a second from the equity in your property.  Often, the most a mortgage company will allow is a 20% owner finance, second.

With any of these methods you must carefully screen the applicant, and collect a deposit, and have the terms of the purchase clearly stated in the contract.  Owner financing can give the investor residual like income for years to come, or in retirement, and with the interest collected it is not unusual to double your money in a few years.  Before holding on to a property month after month without a sale, consider offering incentives with owner financing.  Smart real estate investors prosper no matter which way the real estate market swings.