Florida, which has notoriously been home to a quarter of the nation’s foreclosures, saw a 62% decline in foreclosures during 2011. Add to this a new report from the Department of Commerce showing inventory levels of homes are in a better-than-healthy 5.6-month supply and it is obvious that real estate investors need to begin polishing their marketing plans, negotiating skills, and adjusting their investment strategies to continue finding homes to sell.

The threats of massive amounts of looming ‘shadow inventory’ appear to have dissipated, and lenders have taken a proactive approach to finding other ways to distribute REOs in bulk and preserve home values. A few months ago, the biggest problem for real estate investors was eliminating the flood of short sales, foreclosures and REOs on the market. Now the problem is fighting the competition to get the best deals and hoping that bidding wars don’t drive prices too high.

So what can real estate investors do to get ahead of the competition and find deals that still make investment sense?

Jumping on the bulk REO train is one way, but it also means holding large amounts of cash and getting stuck with properties that the banks have no longer managed to sell.

At the very least, investors should look for ways to automate their contracting and bidding processes so that deals keep flowing. This will also make it easier to cover larger areas. Some parts of the country are just getting too hard to find at wholesale prices like Miami and San Jose. Looking at those regions that have yet to feel the rally and are not as enthusiastic about foreign investors as the Midwest, they could strike easier deals.

While realtors and banks may have been easy sources of discounted properties to choose from over the past two years, investors starting to upgrade and try direct marketing to individual home sellers could be ahead of the wave of new investors who jump to the market. Test the copy, test the packaging, test the phone numbers and time to get the maximum return on investment and make the budgets go further.

Finally, gather a pack of ‘bird-dogs’. Enroll as many people as you can to find you great homes with equity and profit. If you pay them based on having successfully closed the deal using flash funds, it doesn’t matter how much you offer. It could be $ 5 for someone abroad scraping property records all day or $ 500 to $ 1,000 for some local partners.

Investors must realize that they cannot wait. Every day more people are returning to invest in real estate.

What are the best areas to invest in real estate today? Certainly, there are still discounted properties in most neighborhoods in the US, although some clearly have more than others. Miami, San Jose and San Diego can quickly become overheated and mean much tougher competition. While cities like Atlanta, Phoenix, Chicago, and Las Vegas are still awash in foreclosure settlements.