But the case is different with California housing investors, Patrick F. McMillin and his son, Patrick L. McMillin. The father-and-son team of McMillin Ventures buys foreclosure homes, spends a large amount of money and time fixing them, and sells them to military veterans.

Patrick L. said that military veterans deserve to have a home because they dedicated their lives to serving the country. He added that he and his father are very proud to have found a way to help someone who served in the military.

When father and son established the McMillin Ventures in 2008, they did not plan to buy foreclosure, repair and sell them to military veterans. However, they pointed out that their housing projects are tailor-made for military veterans.

The housing projects of the McMillins are affordable and eligible for low-cost loans guaranteed by the Veterans Affairs (VA, which means that no down payment is needed). Also, buyers are spared the trouble of waiting for weeks for the lenders to decide if they will approve the loans.

So far, eight out of the 12 buyers of McMillins’ houses have been veterans. Both father and son relish the idea of selling to military veterans because their ancestors also served the country.

Meanwhile, the McMillins said that they find it very easy to work with VA-insured buyers, adding that VA loan transactions are often the smoothest to handle. However, the case is different with turning a house in a deplorable condition into someone else’s dream home.

Both father and son said that the buying and rehabilitation process often involves months of waiting for banks to approve the deal and another three months to finish the renovations. When the McMillins buy foreclosure houses, they expect them to be in the worst conditions, with missing fixtures and appliances, illegal room additions, cracked slabs, outmoded electrical lines and malfunctioning plumbing.

To clinch the sale, the McMillins make it a point to meet the prospective buyers before signing the sales contract, adding that it is their way to establish a personal relationship with the buyers.

Based on the Move.com study, the number of investors buying foreclosures rose by 200 percent since March this year. Their chief reasons for entering the residential real estate market are low foreclosure prices and availability of housing units for sale.

The study also found that one in every 8 homebuyers or 12.1 percent planned to buy a house for investment purposes. This percentage is a significant rise from 5.6 percent in March. Of these homebuyers, more than 8 percent were women and nearly 16 percent were men.

Comprising more than 25 percent of all homebuyers, foreclosure home buyers have become a significant group in sparking movement in the housing market. An estimated 42 percent of prospective foreclosure buyers plan to buy for investment while nearly 58 percent plan to occupy the homes they buy.

Among prospective foreclosure investors, more than 13 percent plan to turn repo homes for sale into rental houses, more than 11 percent plan to repair the foreclosures and the resell them and nearly 18 percent plan to have family members occupy the properties while waiting for home prices to go up and then resell the homes at a bigger profit.

Of the 42 percent prospective investors in foreclosure homes, the age group 35 to 49 was the largest in the survey, accounting for nearly 53 percent of all respondents with plans to invest in foreclosures.

Most of the prospective investors plan to profit by finding bargain-priced properties and then wait for home price appreciation for at least 5 years. More than 58 percent expect to buy at a discount of 20 percent compared to market price levels while almost 39 percent expect a discount of 25 percent. Seventy-three percent expect a price appreciation of at least 10 percent in five years while 28 percent of investors expect their houses to appreciate by 20 percent.

If investors look at price appreciation records in the country, houses have appreciated by 15 percent on average nationwide since 2004, based on data from the Federal Housing Finance Administration.

The study also found that many Americans are still not aware of improvements in home affordability nationwide. Because of record numbers of repo homes for sale, home affordability has risen considerably. Today, an American household earning the median income can afford to buy about 70 percent of houses listed on Move.com web sites.

Bryant is one of the partners in corporations which owned the Three Bears Hotel. The sale of the campground was authorized by a judge at the Juneau County Circuit Court. The ruling to sell the campground was made in response to a loan foreclosure lawsuit that was filed last year against Ed Van Der Molen, an Illinois-based developer, by Bank of Mauston.

The hotel, water park situated indoors and convention center have yet to reopen since they were closed and placed on foreclosure property listings last year. But the campground was reopened this year although under court-appointed receivership and later closed last October 17. It is slated to be opened again by 2010. In addition, Bryant plans to renovate some of the campground’s cabins and to construct more cabins.

Industry experts said that the receiver for the property, who was appointed by the court, has been looking for potential buyers. Nearly $282,321 in back property taxes were received by the county government after the sale of the property to Warrens Lodging.

Meanwhile, Monroe County officials are planning to start tax lien foreclosure process against the Jellystone hotel resort on September next year, unless the delinquent taxes were not settled. The hotel resort and the campground owed a total of $1.7 million in delinquent property taxes.

According to Bryant, he does not have any plan to purchase the indoor water park, hotel and convention center. However, he is confident that the hotel resort could find a buyer before the county starts foreclosure proceedings September next year. He pointed out that the property is first class but embroiled in some legal issues that have been resolved in the past few weeks.

Industry experts said that Bryant has been an investor in the Jellsytone hotel resort in 2007. But they clarified that Bryant was not involved in the campground.

Bryant said that he purchased the campground which was on foreclosure property listings because it complements other campgrounds on his portfolio. He explained that the campground was the largest property on Jellystone Park franchise and features amenities such as two small golf courses and an outdoor water park.

Some investors are even scouring the housing market for troubled residential loans that they think they can fix. Industry experts said that the current low home prices are just too hard to resist for people who have the cash. Additionally, foreclosure investing is also viewed as a way to hasten the recovery of the housing market and economy.

Some investors took a plunge on the foreclosure investment market in Maricopa, Arizona. The desert city saw its population grew to almost 45,000 during the peak of the housing market. The city has a significant number of subprime loans and foreclosure properties.

Many investors were attracted to Maricopa as a spacious alternative to the city of Phoenix. In April, both Phoenix and Maricopa saw their average home prices dropped to an all-time low of $125,000. It increased gradually month after month to finally reach $134,000 last August.

According to industry experts, investors are starting to return to the Phoenix market as they see home sale prices dropping far below the usual market trend. Many of them consider Phoenix’s housing market as a good place to put their money into.

Meanwhile, across the country, property prices increased for three consecutive months in July. This increasing trend encouraged investors to purchase properties. According to the S&P/Case-Shiller Index, property prices in 20 metro areas across the country increased by about 4 percent during the period.

Experts said that majority of the purchasing activity was attributed to first-time homebuyers who are enticed by the $8,000 federal tax credit, low property prices and interest rates. But absentee buyers, such as second-home owners and investors accounted for 41 percent of the total home buying in Phoenix in August.

The home buying activity is so intense that in California and Southwest areas, distressed properties are receiving multiple offers as investors and first-time homebuyers compete for good deals.

One example that foreclosure investing is becoming a trend is the increase in the number of people who attend auctions of foreclosed houses. It used to be that a foreclosure auction would get only five bidders. Now as many as 70 people would join the intense bidding for a foreclosure home.

The current housing market is a gold mine for young people who have good jobs. Many of them believed that now is the best time to invest their hard earned money. According to industry experts, many young people were spared from the devastating effects of the recession and foreclosure.

They said that a great number of young people were renters and did not put that much money on the stock market. They were even spared from the impact of the drop in home value and 401(k) account, adding that they are now in the position to invest their money in the housing market where prices are at their record low.

Market data showed that home prices dropped by as much as 50 percent in some areas in the country. The drop in home prices and low interest rates enticed many young people to buy foreclosed homes.

Meanwhile, the Standard and Poor’s 500 stock index dropped by 34 percent from its peak in October 2007. There are also other ways that make young people benefit from the current economic situation. One is the Cash for Clunkers program which allowed them to exchange their used automobiles and purchased new cars at discounted prices.

Industry experts said that young people who have the means are taking advantage of the many ways that they could safely invest because they know that the opportunities would not last long. Market data showed a 1.5 percent drop in the Consumer Price Index for the previous 12 months. The drop in goods and services is even greater, allowing many young people to invest more in stocks and housing.

George Jaramillo, a 35-year-old business analyst, said that the current market is a great time to make some profits. Aside from low home prices and interest rates, many young people were also enticed by the $8,000 federal tax credit given to first-time homebuyers.

Young people who buy foreclosed homes for the first time accounted for 45 percent of the total home sales in July.

The declining residential and commercial real estate market is not unique to the city of Denver. Most major metropolitan areas across the country are experiencing the same problems. However, what makes this Colorado city unique is despite the problems, it is still one of the fastest growing cities in the country today.

Several significant factors that put Denver on the map as one of the most progressive cities in the country include the Denver Transportation Expansion Project, its great recreational facilities and quality education.

Market data showed that the city’s high livability score and buoyant corporate environment continue to be major factors that attract the interest of businesses and potential homebuyers. Industry experts said that Denver may be suffering from the impact of the foreclosure crisis but it still fared better compared with other cities across the country.

This is because restrained development prevented excess inventory that burdens other housing and commercial markets. In the first quarter of this year, the number of Denver foreclosure homes filings dropped by almost 46 percent compared with the same period a year ago.

Statewide, the picture is not as rosy as Colorado’s foreclosure activity rose last month, earning it the eighth spot in terms of high foreclosure rate in the country.

According to market data, 6,472 homeowners across the state received at least one foreclosure filing in August. This means that one out of 329 houses were in some stage of foreclosure. The August figures represented an 18 percent increase from the previous month and over 39 percent higher from August 2008.

In the second quarter, 12,135 properties were placed on the initial stage of bank repossession. From April to June, about 5,000 actual foreclosures were reported, meaning the properties were sold at auctions or returned to the banks.

During the period, the Denver areas saw some improvements. The total number of actual foreclosures dropped by almost 30 percent in the counties of Denver, Arapahoe and Adams. Industry experts said that despite the high foreclosure rate, Colorado’s housing market is showing some recovery compared with its performance in 2007 and 2008.

According to industry experts, condominiums as low as $20,000 and single-family homes at less than $60,000 are generating multiple offers and overbidding. They said that despite market data showing a slow rise in home prices, it appears that foreclosure houses will prevent further improvement in the pricing trend.

Experts said that many cheap properties are located in neighborhoods severely affected by the foreclosure crisis, including Antioch, Oakland, Richmond, Pittsburg and Vallejo. These cheap properties are mostly short sales or bank foreclosed homes.

As an example, experts pointed out that a one-bedroom condominium at Lakeview complex in Pittsburg is short selling for $48,000. The owner purchased the property in 2007 for $228,000.

Meanwhile, many homeowners’ properties are worth less than the total mortgage they owed to their lenders. This is one factor that is a cause of concern to industry experts. They said that homeowners whose mortgages are higher than the values of their properties are candidates for foreclosures.

They added that these homeowners would lose interest to continue paying their mortgages and instead would walk away from their distressed properties and leave them for lenders to be foreclosed.

Meanwhile, the popularity of bargain-priced properties has helped entice more buyers, who are just waiting for the right time, to get on the bidding frenzy. Industry experts said that banks, burdened with repossessed homes on their inventory, have started to offer properties at very low prices to attract cash-rich buyers, especially first-time homebuyers who are laden with federal tax credit of $8,000.

Furthermore, banks are in a hurry to dispose of properties clogging their inventory because the longer bank repo homes remained unsold, the higher the costs they would incur.

According to industry experts, banks prefer homebuyers with cash for quick closing of sales deals and because many foreclosed homes are uninhabitable which means they could not qualify for a loan.

On the other hand, experts said that condominiums are cheap buys because of some financing issues. They said that government-supported loans which accounted for about 90 percent of loans in the current market, are not made available to owners of these complexes.

They pointed out that many condominium residents are delinquent on their homeowners’ association dues plus the fact that most of these units are not occupied by their owners.

Some of the buyers are former top executives at financial companies who have discovered good profits that can be found from buying and selling foreclosed homes for sales.

One of these investors is Matthew Cooleen, a former managing director at Deutsche Bank, who formed his own Connecticut-based investment firm HudsonCross Financial to buy foreclosed homes for sales in battered states like Arizona, Florida, Nevada and California. Cooleen expects to earn much because he says he is paying bargain prices for good homes. Since the launching of his firm, he has spent around $30 million in acquiring foreclosure homes from banks.

Another investor is a former executive director at Morgan Stanley who has formed his own company in San Francisco to buy and sell foreclosed homes for sales mostly at auctions. He has purchased four homes for 75 percent less than their prices four years ago. He is also raising another $6 million to buy other properties.

The third investor is former D.R. Horton division president Mark Allen who has partnered with Oregon-based Gorilla Capital to buy foreclosed homes for sales in Phoenix. He said he has been buying foreclosure houses at court auctions with money from Gorilla Capital. He reiterated that buying foreclosure homes is the best way to profit from Phoenix’s housing market during the downturn.

Realtors in many housing markets said that investors backed by investment firms have been outbidding first time buyers and other types of buyers because they bring loads of cash with them.

Some of the investors are even so lucky because they profited during the housing boom and are now again profiting from the housing decline. In contrast to their comfortable executive offices, some are staying in lodging houses looking for bargains in suburbs and courthouse auctions.

Home purchases by small investment firms are often not tracked by real estate research firms, but their purchases can be determined by the number of cash purchases.

In Phoenix, about 38 percent of all single family houses sold were paid in cash. In Punta Gorda in Florida, about 67 percent were cash sales and in Las Vegas, almost 40 percent were cash sales.

Buying foreclosed homes for sales, rather than apartment complexes, fit small investment firms because small investors are knowledgeable about local submarkets.

This report highlighted that California holds 13 percent of the total home loans in the nation. However, the report also indicates that 19 percent of all foreclosed homes are located in California, which registered one of the states with the highest foreclosure rate.

As some people continue losing their homes to foreclosures, other people are turning this misfortune into opportunities as investors take advantage of the troubled market and buy homes way below their original appraised values. Homes that were previously valued at $600,000 are now selling for only $275,000. Several more homes are in this situation and are being sold for less than half of their original values.

Hundreds of investors and homebuyers are bidding for the more than 300 foreclosed properties being sold by the Real Estate Disposition Corporation (REDC) auction in Oakland. The REDC has reported that more than $3 billion worth of properties were sold by their company for this year alone. First time homebuyers are finding this a wonderful opportunity to own a home that they would not have bought otherwise should prices remained as they were.

However, homeowners living in the neighborhoods were these foreclosed homes are located are not too happy about the situation. The tremendous drop in prices for these properties has caused property values in nearby homes to decline, to the chagrin of their homeowners. Most are troubled by this state of the economy, but they cannot do anything else about it but wait for the recession to recede and the real estate market to stabilize.

If you take into consideration the millions of homeowners who lost and/or about to lose their homes to foreclosure, you can assume that there will soon be a high demand for rental homes. Already, cities and states hit hardest by the mess in the subprime mortgage industry have shown a dramatic rise in the demand for these rental properties.

As a businessman, you cannot ignore the reality that foreclosure properties are a lot more affordable than the other existing homes for sale in the market. Most of these repo homes are sold at hugely discounted prices because: (1) the owners/ sellers are being burdened by the holding costs and (2) market conditions are currently favoring buyers over sellers.

Choosing foreclosure homes as rental houses will also be a lot convenient since there is currently a large inventory of foreclosures. You can choose from pre-foreclosures, foreclosures at auctions and bank foreclosures. Of course, you should expect these repossessed properties to require some repairs since most of them have been long abandoned and some have even been vandalized.

If you are thinking of entering the rental or leasing business, it will be a smart move to consider these foreclosed properties for their better return potential. With the government doing everything it can to unfreeze the credit crunch including the approval of the controversial $700 billion bailout plan, you will soon be in the position to own one of these foreclosures.