Another part of foreclosure investing is the huge discounts available on distressed properties. Investors buy foreclosure properties for less than their market value.

A distressed property is one that is in poor physical condition or in poor financial condition. However, it is not the property that is in bad financial condition, it is the owner of the property that is suffering from poor financial shape.

That is part of the foreclosure investment game. Most foreclosure experts agree that 20 percent discounts are common. More rare, but always possible to find, are properties that can be acquired at even larger discounts below market value.

Sometimes the discounts can be 30 percent to 50 percent below market value. Even a property obtained at 10 percent off current market value can offer significant value. For example, a $250,000 foreclosure property purchased at 90 percent of market value offers the buyer a $25,000 discount.

There is no compelling reason to invest in a foreclosure property that is not discounted. Without the benefit of a near instant gain of equity, the hassles and problems are probably not worth it. When there is an opportunity to purchase real estate at a wholesale price and sell at a retail price, profit exists. That profit is what attracts real-estate investors to acquire foreclosure properties.