Things are rapidly changing in real estate investment and smart, resourceful, pre-foreclosure investors will have their best year in 2008. Those investors who continue doing the ‘same old, same old’ hoping for the results they got three years ago, will perish.

Investors resistant to change who take on the rigidity of the Sequoia tree will be forced to crash into the ground of financial failure by the changing real estate winds. Smart investors are like palm trees, willing to be flexible with the changing winds. They’ll generate huge profits, adapt to the new real estate market and increase their net worth substantially in 2008.

There are two things you should know about the future of real estate investment. One, there will be more foreclosures this year than last and two; there will be fewer investors able to successfully complete a short sale. Based on this information I’ve created five Pre-foreclosure Predictions for 2008. Read them and keep them in mind as you get to work in this new year ahead.

Five Short Sale Predictions for 2008:

1. Volume counts more than quality. Successful investors will see that their spreads per deal are falling and to grow and continue at the rate they are used to, they have to do more deals with less time. This will force investors to create seamless systems or perish.
2. Double closings are on their last leg. There will be creative ways to do options and there will always be a few "on the DL" title companies that might do them, but they are harder and harder to find. The perfect timing needed between getting short sale approval and actually closing with your end buyer becomes more difficult with a softening nationwide market. Plus, the pressure for those title companies to conform will outweigh their ability to capitalize by being one of the few shops in town willing to do these double closings. The deep discount that once sold your houses in a weekend aren't as alluring as they once were with the over abundant supply of discounted options including Real Estate Owned homes (REOs), other short sales, and new build discounts on homes. This in combination with tougher financing and less flexible loan products for investors, make timing even more challenging to pull off a successful double close.
3. A Realtor must be utilized on the successful investor’s team as a way to generate revenue. If there's not the spread between the first Department of Housing and Urban Development (HUD) deal and the second, then a 3% commission is better than a sharp stick in the eye. Even on a bad month when your company does only four homes but gets the 3% commission on each home, with a sales price of $150k that’s still okay!
4. Education must improve. End strategies must evolve. Let's face it; many of us (including myself) loved the idea of doing short sales because there were no tenant issues involved. It used to be, beat the price down on the mortgage, sell it for a discount, try to make $20k minimum a deal, rinse, repeat. In this new market we must branch out into other areas of real estate, from managing rental properties to setting up lease-to-own option properties in order to survive and still make that profit. This branching out comes with a need for further education.
5. Private cash is key. Having access to cash will be vital for huge success in real estate. Investors can use this cash for a variety of reasons. Successful investors will use it to do "transactional financing." They will use it to buy a house that they shorted because it is in need of repairs. Then, after they fix it, either hold it until they flip or refinance and do a standard lease, lease/option, or lease purchase.

It is a clear indicator of weak and outdated investment information if you are getting real estate investment tactics from some guru who isn’t addressing the 'changing winds' of our economy, or at least mentioning them.

The idea of property management invokes thoughts of repairs, vacant houses, insurance issues, trashed properties and so on. It sounds like a chore to change your tried and true practices. However the practice of holding properties, getting Realtors on your team, setting up auctions, practicing aggressive marketing, and many other strategies and tools will need to be utilized in this soft nationwide market for a successful year in 2008.

At RealEstateInvestor.com we have worked hard to gather the best and most current information concerning our rapidly changing real estate market. If you have the right education, the right team, and the right resources developed, you can beat the competition in 2008. While other investors are picking up their old stock market courses as they hang their head in shame, you will clean house!