As far as the current housing market is concerned, every cloud has a silver lining, and the rise in California home foreclosures is no exception - especially if you're hunting for a good deal when purchasing a home.

Investing in foreclosures is no low-risk venture.  You often need to act quickly, have ready cash to buy, and may need to earmark money for repairs to make properties sellable.

Here are some distressed home buying strategies:

Identify properties:  An important tool in locating distressed or foreclosed homes is to connect with a trusted real estate professional in your area who has access to the MLS and other resources to search for properties meeting your criteria.

Options to buy include:

Short sales:  When borrowers are unable to keep current with mortgage payments, some lenders agree to allow the sale of the property for less than the loan balance.  Frequently, you can find such deals through real estate professionals representing troubled homeowners.

Auctions: Auctions typically offer the best buys, but the risk to you is greater.  You must research liens against the property and decide on your maximum bid price.  You're also required to have cash on hand; remember, you're bidding on homes you haven't inspected and competition can be stiff.

REOs:  These are properties that have been taken back by banks.  You can contact banks' REO or asset management departments to locate properties.  Such homes are frequently listed in the multiple listing services, so REALTORS^® can assist you with purchase.  Unlike at auctions, you'll be able to inspect properties and banks may have made repairs to a home.

More Information regarding foreclosures and distressed properties there are a couple books or publications I can recommend:

(1) Foreclosure Investing for Dummies  and (2) The Pre-Foreclosure Property Investor's Kit: How to Make Money Buying Distressed Real Estate--Before the Public Auction.