Far from being mysterious or hard to implement, the process for finding and landing a top foreclosure deal is fairly straightforward. Once you know the steps, it's really just a matter of following them each time you wish to invest in a foreclosure property.

Step 1: Get your financing in order

There's no point investing in a foreclosure without having the necessary financing in place. While it may not be essential to have a pre-approved loan from a bank or other lender at this stage, it's a good idea to get a notion of how much cash you want to put down, and how much you can borrow, under what terms, and from whom. This also gives you a framework for choosing an appropriate foreclosure deal.

Step 2: Have a game plan

You don't necessarily want to be rigid at this point. Often the best way to maximize your profits from a foreclosure investment will emerge when you're considering a particular property. However, it's wise to know how, ideally, you'd like to monetize a foreclosure - whether it's renting the property out, flipping or rehabbing it, etc. This will also help guide you in selecting potential properties.

Step 3: Choose a market

Ideally, when scouting for properties, focus on one or more geographical markets with which you're familiar. The profitability of the deal is going to depend on how accurate your valuation of a given property - so you probably don't want to look for a deal in unfamiliar territory. The only exception to this is where you have a local, totally trustworthy expert to help you value properties in that area.

Step 4: Gather information

Once you've worked out the area in which to look for foreclosures, it's time to hit the Internet. Visit the relevant county recorder's site for notices of default indicating homes that have gone into pre-foreclosure. And visit the foreclosure listing sites for upcoming foreclosure auctions and trustee sales.

Step 5: Approach home owners

If you've identified a promising pre-foreclosure home, don't hesitate to get in touch with the home owner. Time is of the essence here - they only have a certain amount of time in which to sell their property before it goes into foreclosure. Further, you may have some competition from other prospective buyers. Ideally, you want to quickly arrange for an inspection and valuation of the property and, if it looks like a good opportunity, put an offer on the table. If, subject to the approval of the bank that has commenced the foreclosure proceedings, your offer has been accepted, you can finalize the transaction and take possession.

Step 6: Foreclosure

If you are unable to seal the deal at pre-foreclosure, or have identified a property that's going to public auction or trustee sale, the next step is to attend the auction or trustee sale. The auction or trustee sale may be a high pressure affair, so it's important to keep your wits about you. Don't get into a bidding war and only bid for properties that you're sure will be profitable for you.

Step 7: REOs

When it comes to real estate owned properties or "REOs" you'll be negotiating with the bank. In this case, the bank has been forced to buy the home and is likely to want to offload the property as soon as possible. This gives you the upper hand, but be aware that you are unlikely to get the bank to agree to undertake repairs or settle liabilities that attach to the property. You'll probably have to buy the home "as is". Nevertheless, if it's still a wonderful deal, there's no reason to object - make a reasonable offer and get that property!

The subsequents steps are to repeat the last 7 plus continually learn and educate yourself on all the facets of real estate foreclosure investing such as what is indicated in the resource box below or to obtain books from your local bookstore and the Internet.