I recently began jotting down the most frequently asked, and it looks something like this:

Q: Where should I look in metro Atlanta to find a really good deal?

A: The search for the next "hot area" in Atlanta is like trying to find the fountain of youth. Great deals are more a function of the seller's motivation than of the location of the property, and there are motivated sellers all over town.

What's most important is to know how to locate motivated sellers, and to put yourself in a position to come into contact with a lot of them. If you do those two things, you are very likely to see a lot of good deals.

For example, due to a huge increase in the number of foreclosure homes in the Atlanta area, many lenders are experiencing an uncomfortably heavy burden of unsold post-foreclosure homes, sometimes called REO properties. REO stands for "real estate owned" by the bank.

If you were to contact Realtors who specialize in these REO properties and plan on viewing ten each month for the next six months, you would likely come across several outstanding bargain homes.

Q: How much cash will I have to have to get a house?

A: It all depends on the type of house you want to purchase. In today's world of financing, it is entirely possible that you might qualify for a "100 per cent" loan, requiring no down payment whatsoever. If your seller paid your settlement costs, you would need only a few hundred dollars for prepaid items such as insurance and escrow account set-up.

Even so, most lenders like to see that you have "reserves" or emergency funds equal to at least three months of your projected monthly payments. These would be guidelines for a conventional loan, and assume you have fairly good credit.

In contrast, under the world of creative financing, a motivated seller might be willing to sell you their house for literally no money down, if they chose to do so. While most sellers would like to see some down payment as a sign of good faith, I have bought homes that were completely financed by the seller.

Typically, sellers will offer to accept payments based on a thirty year payback period, but may want an option to "call" the loan, meaning they can require payment in full after a certain number of years. In owner financing, a five year call is not unusual, and it means you either have to refinance or pay off the loan somehow in five years. How you accomplish that is up to you.

I do want to state clearly that you can buy a nice home without cash and without credit, but you will have to find a seller who is motivated to sell and will accept creative terms to effect the sale.

Q: If I want to own rental real estate, how will I be able to compete with you and other, more experienced investors?

A: The vast majority of residential real estate investors own between one and ten rental properties. As a result, most active investors set a goal of acquiring one or two houses per year. Typically, this activity is in addition to their regular, full-time employment. In contrast, since January of this year, the 13 county metro area has averaged more than 3,600 homes advertised for foreclosure every month.

And the foreclosure market is just one of many areas of opportunity in real estate. There are fixer-uppers, older homes, improving neighborhoods, out-of-state owners, don't-wanter owners, estate sales, probate sales, and lender sales, just to name a few.

There are literally so many opportunities to invest in residential real estate that competition among investors is not a limiting factor. Instead, being prepared to take action when a deal comes along is always a challenge.

Q: Is it smarter to "flip" a house or hold it for the long-term?

A: There are advantages and disadvantages to each strategy.

By my definition, flipping means buying a house at a wholesale price, doing some amount of work on the house (whether it's simply paint & carpet or a major renovation), then reselling quickly on the retail market for a relatively quick cash profit.

The advantage to this activity is that the investor earns a profit that can be used for any purpose, whether that's paying for a vacation or investing in the next house. The disadvantage is that the profit is considered regular earned income, and is taxed at almost 50 percent, once you consider Social Security.

In contrast, a long-term hold property raises the issues of financing for the acquisition, the repair, and then financing for the hold. It also requires that you rent the property to pay for the debt service, meaning you are now in the landlording business, which some people prefer to avoid.

The clear advantage to a long term hold is that there are no income taxes imposed on the increase in value of the property until you sell, and if you plan to hold long term, you are likely to see a substantial increase in value over time. As equity builds, you will be able to borrow against it, again tax-free, and count on rental income to repay what you have borrowed.

Next week: Is flipping an illegal activity?