Loan location matters. Here’s why.

To lend, or not to lend? That is the question. As originators, our work is admittedly less romantic than Shakespeare, but when risk gets factored in, it can sometimes be just as dramatic.

Risk comes in many different forms, of course. We could wax poetic about experience, leverage, or credit all day long. For the purpose of this email, however, let’s take a look at what’s commonly referred to as the most important factor in real estate: location, location, location.

Research you investment property location.

According to ATTOM Data Solutions, as of July 2024, 1 in every 4,414 American housing units is in foreclosure. It’s a fraction of the overall market, but the pressure is not applied equally nationwide. The five Metropolitan areas that have been hit the hardest include:

Provo-Orem, UT: 1 in every 940 housing units

Macon, GA: 1 in every 1,167 housing units

Columbia, SC: 1 in every 1,587 housing units

Spartanburg, SC: 1 in every 1,895 housing units

Atlantic City-Hammonton, NJ: 1 in every 1,910 housing units

While some of this recent activity is driven by economic pressures, much of it has come as a result of the COVID-19 moratorium on foreclosures expiring. It’s not all bad news, though. In fact, despite the end of the moratorium, foreclosures overall are down roughly 4.4% from last year.

As a real estate investor, understanding the nuances of location-based risk is crucial to making informed decisions. The data on foreclosure rates isn't just a statistic—it's a signal of where potential opportunities and pitfalls may lie. By paying attention to these insights, you can better navigate the current market landscape, identify areas with heightened risk, and make smarter investment choices that align with your financial goals.

It can be a lot to digest, but we’re here to help. Your partnership with Lima One gives you access to our team of in-house experts, who’ll help you evaluate all the risk factors when working on your next big deal. That includes looking at the borrower’s experience, credit, the leverage required, and of course: location, location, location.

ROC Financial Solutions is here to help you fund your future.