You are here: › Atlanta Foreclosures

Atlanta Foreclosures Hit New Records

Are these foreclosure records good or bad for house flipping?

(Note: This article was written in December 2010) The number of Atlanta foreclosures is still soaring even after two years of the market crash. I Just read this little tidbit about foreclosures from the Atlanta Journal Constitution that confirmed my suspicions regarding my local market:

"Foreclosure notices in metro Atlanta soared to new heights in November, setting monthly and annual records, according to data released Monday by Equity Depot. A total of 13,834 foreclosure notices were published in the 13-county metro area in November. The previous record of 13,130 was set in August. Also, with one month of the year left to go, the annual record already has been shattered. A total of 117,437 notices were published during the first 11 months of the year, topping last year’s 12-month record of 117,107. November notices were 24 percent higher than in October and 47 percent greater than a year ago, according to Equity Depot. Gwinnett posted the most notices in November with 2,924. Fulton was second with 2,557, followed by DeKalb with 2,114. Cobb came in fourth with 1,656, followed by Clayton with 1,252."

Since Georgia is a non-judicial state the foreclosure does not have to be filed in court. That means that once the foreclosure notice is filed the owner has 4 weeks to “catch up” the payments. If they don’t then the house is auctioned off at the court house steps the following month, more or less.

I already knew that my market, specifically Gwinnett County, where I do most of my investing, is saturated with foreclosed homes currently for sale. What this means is that this inventory of foreclosed homes is not going down any time soon. At this rate, Atlanta foreclosures will be a huge part of the market for several years to come.

This of course is bad in general for the people involved, the local community and the local economy. Not only are tons of people losing their homes but such a massive amount of vacant homes is bad for everyone.

So what is a real estate investor to do?

On the positive side this presents plenty of investment opportunities to choose from. On the negative side this presents two major problems for house flipping:

1) It will make it very challenging to sell a house at retail price. If the house I am selling is surrounded by houses priced at 20, 30, 40% less it will make mine harder to appraise at the price I am selling for and probably lower the price on mine.

I learned that lesson the hard way with House Flip #2 (see Flip a House link). Even though that house was the nicest in the neighborhood there were bigger and functionally better houses around it selling for $20 and $30,000 less.

In order to avoid this happening again I got to buy lower, fix up nicer, price lower and probably take longer to sell…

2) It will make it harder to find a property that is not surrounded by other Atlanta foreclosures. People don’t like it when they are buying a house at say, $120,000 when there are several houses in the same neighborhood going for $70,000 or less. Of course, my house will be move-in ready with lots of upgrades but still many people all they can look at is the price. This is the current situation I am facing with House Flip #4 and why I think it has taken so long to sell.

The only defense that I got left for the next property is to buy ultra low, fix up extra nice and then price lower than the retail sales I might be competing with. I cannot compete with Atlanta foreclosures on price so I have to do it in quality. Looking for those neighborhoods with fewer foreclosures in them will also help. This probably means moving to different neighborhoods and probably to a different price range from what I have been buying so far.

Send Me the Wealth Insights Newsletter!


And I will send you a FREE Ebook and my investing spreadsheets

Your Best E-mail: spa First Name:


E-mail will not be shared with anyone.See our privacy policy.


Related Articles:


Return from Atlanta Foreclosures to Foreclosure Investor
Return to Homepage

Have Questions or Comments? - Have your say about what you just read, use the box below (you don't need a Facebook account).

wealth steps rss feed

wealth steps facebook

wealth steps twitter

wealth steps google plus

Get on The Road to Wealth!
Subscribe and get access to my FREE ebook and tools for investing and managing your money.

Your Email:

Your Name:

Then

E-mail will not be shared with anyone. See our privacy policy.

wealth steps blogWealth Steps Blog
Newest Content:

wealth insights newsletterNew Posts by Email


Lets Connect!

Best of Wealth Steps
Most Popular:

My Current Project: Flip That House

Importance of Financial Planning

Signs That You Need Credit Counseling Debt Relief

The 6 Steps to Basic Financial Planning

My First Flip: Flip This House

Simple Net Worth Calculation


My Favorites:

Going From Debt to Wealth by Focusing on Wealth

Solutions To Credit Card Debt: The Debt Snowball Plan

Dealing With Problems When Flipping A House

Buying Foreclosures – Creating Wealth with Foreclosure Investing

Building Wealth Through Dynamic Planning