(Business 2.0 Magazine) -- Two years of interest rate hikes and flattening home prices have put the squeeze on homeowners who gorged on debt during the boom. Now they're struggling to keep up with ballooning payments or, worse, losing their homes to creditors.

In September alone, more than 112,000 U.S. homes fell into foreclosure - a 63 percent jump from September 2005, according to RealtyTrac.

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Ideal market conditions, in other words, for a niche group of real estate investors - foreclosure gurus who deliver panicked homeowners fast cash in return for property acquired at enviable discounts. They used to go door-to-door and staple ads to telephone poles.

Today, though, an array of new online services like PropertyShark.com and Foreclosures.com is making a once-shady business more respectable - and teaching a new class of investors how to turn hard times into sweet profits.

Take 37-year-old John Cordero. From 9 to 5, he's a broker for a financial-services firm in Burlingame, Calif. In his spare time? Relying on Foreclosures.com for good leads and guidance, Cordero has purchased and resold nine houses in some stage of foreclosure since 2003.

What Cordero calls a hobby is looking more and more like a dream career: Foreclosure sales have so far padded his net worth by $700,000.

Web sites haven't changed the basic rules of the game, of course; they've simply sped it up and invited more players.

Here's what several pros consider essential knowledge for rookies.

Many sites update foreclosure listings as soon as they're available, and often include the amount owed and the estimated value. Some even mention code violations or complaints against previous owners.

"It's stunning," says Bill Rohlfing, who does about half his business of acquiring "shell" buildings in Harlem through foreclosure. "I'd be doing hours and hours more work if I didn't have PropertyShark." Other sites provide useful hand-holding for first-timers.

Don't even consider attending public foreclosure auctions, which are typically controlled by banks and other big lenders. Small players get their best shot by scouting a property right after it goes into default, when there's a brief window to negotiate directly with the owner.

"The whole idea is to get the property before it goes to the [auction] table," Rohlfing says.

After spotting a default notice online - the first stage before the formal auction process - he goes into action.

"First I call the lawyer who represents the owner to ask if there is a way I can negotiate with the owner before it goes into auction," he says. The typical answer is a firm no, but Rohlfing takes that as his cue to try to do it anyway, preferably in person.

Currying favor with the owner is another way a small player can get the necessary leverage to strike a quick deal. Cordero, for instance, often promises to solve the owner's immediate problem by covering enough mortgage back payments to get the loan out of default.

Then, in exchange for the deed to the property, he provides the owner with an apartment, rent-free, while he refurbishes the house. When he sells the home, Cordero cuts the owner a check for a portion of the profit - usually 10 to 20 percent.

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