By D.C. Fawcett, Business Building Coach to the Foreclosure Industry

The first step in any business is to understand the terminology that goes with it. Real estate is no different and that's why foreclosures definitions are important. Foreclosures definitions you need to be familiar with include:

Bank Owned Foreclosure- When a property is lost via foreclosure it goes back to the bank and then becomes one of the now thousands of bank owned foreclosures (or REO properties) on the market today.

Preforeclosure- Any time prior to a foreclosure auction, a property is said to be in preforeclosure, a time when you can work directly with property owners.

Short Sale- When a preforeclosure property is negotiated to be paid off for less than what is owed to the bank, this is referred to as a short sale. Massive profits can be earned with short sales because deals don't just exist, they are created.

Lis Pendens- This is the initial filing by a lender that a loan on a property is in default and that they are pursuing foreclosure as a remedy. This is usually when investors can first discover that a property is in preforeclosure and worth pursuing. It is also when your competition (who include realtors, mortgage brokers, bankruptcy attorneys, and loan modification counselors) discover the same so you need to have a solid game plan in place to effectively operate in a competitive marketplace.

Real Estate Investment Training- This is any dedicated effort by an investor to learn the tools of their trade from those who have walked that path before them. Serious investors should consider real estate investment training (including training that is specific to foreclosures and short sales) as mandatory precursors to running a successful real estate investment business. Whether the training is of the free variety or through paid training services offered by real estate experts, the point is to do anything to avoid going into a new business unprepared.

While this is just a start, these foreclosures definitions should be studies and committed to memory because they will soon become the foundation for your business as a real estate investor.

In today's market, foreclosures as much as part of real estate investing as any other part of the business. Make sure you have a steady source of leads and a professional team to assist you because the deals are out there to be had. Commit yourself to real estate training (including knowing the foreclosures definitions I've mentioned in this article). I wish you the very best in success in real estate foreclosure investing and in business as a whole.