With foreclosure numbers in the tens of thousands nearly everywhere across the country, many people who have never invested in real estate are wondering “is now the right time to find great deals?”

The answer is yes as the indicators are strong for investors -- banks are selling foreclosed properties at huge discounts and strapped homeowners with foreclosure looming are looking for ways out of their predicament, including selling to investors.

Done right, buying a home pre-foreclosure directly from a homeowner creates a win-win situation. The homeowner gets needed cash, and the buyer a solid investment property.

Whether you opt to buy a discounted REO property from a bank or lender, or an individual homeowner, it’s essential to pay attention to the details.

1. Understand Your State Foreclosure Laws.

It’s imperative that before anyone sets out to buy a foreclosure from anyone that he or she understands the foreclosure laws of that individual state. They vary dramatically, and affect the foreclosure process timeline well as sellers’ and buyers’ legal rights. For example, some states give former homeowners specific rights, such as the option to buy back their properties after foreclosure auction.

2. Use the Right Lead Sources.
Locate solid potential property leads with the help of reputable foreclosure listings web sites like ForeclosureS.com. Alternatively, you can manually cull county property records at your county recorders office. A warning: Not all web sites are equal. Some have incomplete and inaccurate information that is unreliable.

3. Beware Marketing Come-ons Like “Instant Riches”.

Avoid web sites or foreclosure “gurus” that promise instant riches with no effort and no money, or their “secrets” for a price. Keep your wallet in your pocket until you have first thoroughly “googled” that person and company. If a web site requires a user fee and won’t allow you a free trial first, look elsewhere.

4. Do Your Homework Before You Buy.
Whether you’re looking for an REO property from a lender or a pre-foreclosure directly from a homeowner, know the local market and the current prices for comparable properties in the area, as well as what kind of financing is available. Even in today’s tight credit markets money is available. If you plan to fix up a property then turn around and sell it quickly, don’t overlook a short-term cash loan from an individual money partner (check out places like craigslist.com or newspaper classifieds for Money to Loan ads). You can get free information and guidance online at sites like ForeclosureS.com (www.ForeclosureS.com) and the National Association of Realtors (http://www.realtor.org/).

5. Investors: Build Solid Relationships with Listing Agents for Lender-Owned (REO) Properties.
These are the people banks and lenders work with to sell the properties they own. With the right relationship, REO listing agents will contact you directly (before it hits the Multiple Listing Service) so you get first shot at the good deals.

6. Know the Quick Sale Market Value of a Property.
Whether shopping for your own home or investing, before you buy a property, you must calculate the market value of the home if you needed to sell tomorrow. That value, minus your costs to fix up the property, to hold it, and to market and sell it, is the fair price to pay for the property today. If you’re buying the property as an investor, include your profit (I use 15% of the sold price) in those costs, too.

7. Know Your Not-to-Exceed Offer Price.
Set the number based on your calculations above, and stick to it. If you’re buying the home for your residence you may have a tiny bit of wiggle room, but as an investor, it’s an absolute top offer price.

8. Reach Out to Potential Sellers.
Don’t be afraid to call people or knock on doors. If you’re looking for properties pre-foreclosure, you will need to meet them face-to-face many times to close the deal. That person needs to understand you’re there to help them (as a white knight, not the grim reaper) solve their problems and buy their home only if selling is their best option. If you’re shopping for a lender-owned property, reach out to REO listing agents. Once they know you’re reliable, dependable, and fair, they’ll work with you often.

9. Look for Motivated Sellers.
All discounts—read that ‘asking prices’—are not equal. REO lenders with overflowing properties in their portfolios likely will be willing to cut prices more significantly in order to remove the nonperforming asset off their books, especially given today’s credit crunch. For pre-foreclosure buyers, sellers need to understand how selling you their home will help them avoid foreclosure and put cash in their pockets for a fresh start.

10. Follow-up and Patience Is Key.
Whether you’re buying a bank-owned property or pre-foreclosure from a homeowner, success is in the details. Address and plan for all of them. Patience is critical, but as a buyer, time is on your side. Yes it takes time and effort to buy foreclosures as a discount. But with the right knowledge and tenacity, your first deal is just around the corner.

There are great opportunities to invest in real estate today – and help strapped homeowners in the process. But, like so much in life, those who do their homework are the most likely to succeed.

Alexis McGee, president of ForeclosureS.com and a widely-noted real estate expert, has been studying foreclosures for more than 22 years. She is the author of The ForeclosureS.com Guide to Advanced Investing Techniques You Won't Learn Anywhere Else (Wiley, 2008), and The ForeclosureS.com Guide to Making Huge Profits Investing in Pre-foreclosures without Selling Your Soul (Wiley, 2007).