Foreclosures have long been a popular property type for investors. They're cheap, they're easy to finance, and there's usually some good potential ROI there, too.
But overall foreclosures have been on the decline lately. In fact, according to a new report from ATTOM Data Solutions, the first half of 2020 saw foreclosures hit a record low. Just one in every 824 housing units (about 0.12%) has gone into foreclosure so far this year.
Luckily for investors, real estate is local -- and that drop didn't happen everywhere. In fact, some parts of the country actually saw increases in foreclosures (as much as 161%).
The top six
Are you on the hunt for the best place for your next investment property? If so, here are a few of the markets where you might be able to find an affordable foreclosure:
- Peoria, Illinois: According to ATTOM's data, Peoria had the highest foreclosure rate in the country last quarter, with one in every 751 housing units receiving a foreclosure filing. That's 0.37% of all housing units in the city.
- Stockton, California: Stockton has seen a whopping 161% uptick in foreclosures over the year. It's one of only 10 cities where foreclosures have increased, the data shows.
- Trenton, New Jersey: In New Jersey's capital, the foreclosure rate is three times the national average. According to ATTOM, 0.36% of all Trenton's housing units went into foreclosure this year -- or one in every 1,573. In June, the city had one of the 10 highest foreclosure rates in the country.
- Chico, California: Chico's another California city where foreclosures are on the rise. Over the year, foreclosure filings are up 61%. Like Trenton, Chico had one of the highest foreclosure rates for the month of June, too.
- McAllen, Texas: This south Texas city claims one of the few upticks in foreclosures (up 42%), as well as one of the year's highest foreclosure rates (one in every 1,148). McAllen had the single-highest foreclosure rate for June as well.
- Lake Havasu, Arizona: You might not have heard of this tiny vacation town, but apparently, it's a foreclosure hotspot in 2020. Foreclosures are up 39% in the area over the year, and it also claims one of the highest foreclosure rates in the country at 0.30% of all housing units.
Other notable mentions, according to ATTOM's data, include Fort Wayne, Indiana; Atlantic City, New Jersey; Bakersfield, California; Columbia, South Carolina; Fayetteville, North Carolina; Cleveland; and Chicago.
Get ready to compete
If you're looking to buy a foreclosure in one of these areas, make sure you come ready to compete. Have your paperwork and proof of funds ready, and be prepared to make a decent earnest money deposit to help you stand out. You may also want to propose a quick closing date if at all possible; most banks want their money back on these properties stat, so the quicker you can make that happen, the better.
And if you need help finding a foreclosure, here's a good place to start. Pre-foreclosures may also be an option.