If you were a real estate investor watching the real estate boom of early 2000s closely, you could have predicted the foreclosure investing opportunities that would become available today in virtually every real estate market in the country.

In the last two years mortgage lenders have been reporting dramatic increases in defaults and foreclosure rates nationwide causing many sub-prime lenders to go under. But that's just a tip of the iceberg.

Will You Be Able To Capitalize On This Foreclosure Boom?

On the surface it seems easy enough. Get a list of properties in default. Contact homeowners. And get the deal done at a juicy discount, before the bank takes the house. Then you can fix it up and flip it, or keep it as a rental with an instant built-in equity profit. Right?

Well, not quite.

Getting into the foreclosure investing game could be an extremely lucrative move that alone could not only feed your family but pay for lavish lifestyle and vacations. Or it could turn into a big black hole consuming all of your time, energy and marketing dollars.

Very few real estate investors actually succeed in foreclosures on a consistent basis. Why? Because, they're using the wrong approach in a very crowded market.

How Will You Differentiate Yourself in a Crowded Foreclosure Investing Field?

To say it's crowded is a huge understatement. The field of foreclosures is probably the most competitive area of real estate investing. It routinely gets more attention from mass media. So more people flock to pursue it. Hundreds of investors in your metro area are mailing to homeowners facing foreclosure. They're even harassing homeowners on the phone and knocking on doors.

In short, if a homeowner is behind on payments, you can be prepared for a major fight for his attention. Just imagine for a moment that person sitting at his kitchen table plowing through a pile of letters from lawyers, bill collectors and investors.

Your mailing piece is just one of many that goes straight to the garbage can. You must find a way to differentiate yourself from the investment crowds. Here's an idea that will put you ahead of the competition.

The Only Ethical Way To Approach Foreclosure Investing

Truth be told, for most people who are behind on mortgage payments and in danger of losing their home - talking to a real estate investor about selling the home is the very last thing on their mind. They often perceive foreclosure investors as sharks taking advantage of their situation.

So, if you want your phone to ring with people in foreclosure, contact them with an offer to 'keep the home'.

Here are 3 Reasons Why You Should Offer Homeowners Facing Foreclosure the Chance to Keep Their Home, Even if You're Really Interested in Buying it

• First, trying to help a family in financial trouble is the ethical thing to do. You'll be preserving the American Dream.
• Second, you'll actually make money doing it. You can help them negotiate a repayment plan with their current lender (the process is called Loss Mitigation) and collect a fee for your service. There're several companies nationwide with an in-house list of Loss Mitigation department contacts for literally every lender in the country that will do all the work for you. So, even if you never buy a single home, with tens of thousands of foreclosures in your hometown, offering Loss Mitigation services could turn into a lucrative income stream by itself.
• Third, this is the most profitable approach. In many cases you will end up buying the home. Remember, the Loss Mitigation process will only work for those owners who got behind, but now recovered their ability to pay. Most won't qualify for a repayment plan because they can't prove their hardship is behind them. And they won't know it until you helped them to pencil their income and expenses on paper and submit it to their lender. Now they have undeniable proof they can't keep it. Once the reality settles in, they'll start talking 'sale'. Who will they sell to? You, of course. You have now earned their trust and it's the only next natural step to take.