It's a buyer's market. You know that just from reading the paper.

There are lots of foreclosure properties available. You know that, too.

But how do you find the best foreclosure opportunities? As I talk about in my book The Millionaire Zone, the best ones are often right in your own backyard.

There are thousands out there already, and there are sure to be more. I believe the iceberg has just started to surface.

I also believe what lies below may be higher-quality properties, not just the neglected ones we often see. I predict coming to the market are a lot of good homes owned by good homeowners who are simply throwing in the towel.

Why? First, the adjustable-rate mortgage bite has just begun.

Loans granted during the go-go years of 2005-06 are just hitting their adjustments, and the impact to homeowners is starting to be felt. The National Association of Realtors just released a forecast for the first down median-home-price year since the Great Depression. This is bound to bring in more towels.

Second, lenders have been fighting hard to restructure loans and payments, but there's only so much they can do.

Real estate is piling up on their balance sheets -- in some cases inflating precious reserve requirements they must keep -- so I expect to see a lot of new lender-owned properties hit the market. Still more towels.

Click here for the video version of this story from Jennifer Openshaw.

Foreclosures tend to be good investments for professional real estate investors and especially those who can do or afford a fix-up. Condition and location can be bigger risk factors with foreclosures than with other properties. The changing foreclosure market and the sheer glut of opportunities, however, are bound to bring some bargains for the careful hunter.

Follow these four for-sale signs, and you'll find the best foreclosure deals.
  • For sale by the U.S government. Major federal agencies including HUD, FHA, VA and even the Department of Justice sell homes acquired through foreclosure. The main portal HomeSales.gov covers these listings in an easy-to-use format, showing the offerings and linking you to realtors and other marketing specialists in an area. I recently found a four-bedroom, three-bath home, five years old and in good shape in a nice suburb outside of Houston, Texas, for under $50 per square foot. But that was kind of an exception -- many of these homes are in depressed areas.

    If you're interested in rural properties, which can include farms or even single-family homes, the U.S. Department of Agriculture Web site shows properties for sale from farm loan programs.
  • For sale by quasi-government lenders. The federal government also sponsors or backs the large private lenders Fannie Mae and Freddie Mac. These sites (especially Fannie Mae) contain extensive listings and tend to cover homes owned by a more midrange clientele.
  • For sale by an agency. Lenders, especially smaller ones, hire special agents, or "asset managers," to manage their foreclosure transactions and sales. These tend to be regional and some have more listings than others. Examples include HomeEq Servicing, Keystone Asset Management or Lenders Asset Management Corporation, and there are many more -- just do a Google search on "asset manager foreclosure."
  • For sale by the bank. Banks and mortgage companies are becoming, to their chagrin, big property owners, and more sites are coming online to hawk their wares, known in their trade as REO, or real estate owned. Sites include familiar names like Bank of America, Countrywide Credit and US Bank. Some will look like the asset-managers sites mentioned above because they are operated by these managers.

    You'll find assets in all price ranges. A recent Countrywide search in Texas yielded more than 600 properties priced from $18,000 to over $600,000.

    The Web is a good place to start, but it isn't the only place to search. If you're looking to invest locally, it doesn't hurt to talk to local banks and lending institutions. Not only will you find out about foreclosures, possibly before they even hit the Internet, but you may also pick up a property in a preforeclosure state. Since the borrower doesn't want the foreclosure experience any more than the bank does, all parties involved benefit from working something out. Can you say "win-win-win?"

As a Millionaire Zone real estate investor, I really hope things get better for all of us. But today's opportunistic buyers will enjoy no finer hour, and these foreclosure sites may point to the best deals of all.

Jennifer Openshaw, a passionate advocate for helping Americans improve their finances and build their personal fortunes, is CEO of The Millionaire Zone and America Online's personal finance editor. In addition to appearing regularly on TV shows such as "Oprah" and "Good Morning America" and on CNN, Openshaw is host of ABC Radio's "Winning Advice" and serves as an adviser to some of America's top corporations. Her new book, "The Millionaire Zone," hit bookstores in April 2007.

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