Atlanta foreclosure investing is viable both in the residential and commercial sectors because of the availability of foreclosed properties in the area and the continued foreclosure activities in both sectors.
In January, Atlanta foreclosure listings in the residential sector continued to grow, with the percentage of mortgage loans in foreclosure climbing up to 2.81 percent of all mortgages. This marked an increase from 1.63 percent of completed foreclosures and pre-foreclosures in Atlanta in January 2009.
In the metro commercial sector, the claws of foreclosure have crept into all kinds of buildings. Among these are a small office building and a mini-mall on Peachtree Street which were owned by the firm controlled by former legislator Pat Swindall. The development loans secured by the buildings were around $2 million and $10 million, respectively.
Another is the storage facility Extra Space in Marietta, whose developer, East Cobb Self Storage, took out a $6.1 million loan from Security Exchange Bank in 2007 to construct the facility.
Lawyer Thomas Austin Jr. said that he has been working out an increasing number of commercial foreclosures over the past 6 months. Lack of tenants is among the major causes, he said.
Another Atlanta lawyer, William Rothschild, said that foreclosure is more viable for banks than refinancing as they can sell troubled buildings to business entities that have been successful in Atlanta foreclosure investing amid the downturn. He explained that those who borrowed for commercial investments from 2005 to 2007 have depleted their funds.
According to the Federal Deposit Insurance Corporation, loans provided by banks in Atlanta and in other cities of Georgia to developers of office complexes, hotels, shopping centers, apartment properties and other commercial buildings that are delinquent by more than one month have climbed up to more than $2 billion. More than 50 percent of these loans are already considered by banks as bad loans.
Largely because of these bad loans, more than 30 banks in Georgia have collapsed and closed over the past 2 years. The number of failed banks could grow as loan losses continued to grow. Over 300 banks in Georgia lost a combined total of over $3 billion in 2009.
Nevertheless, according to metro Atlanta analysts, Atlanta foreclosure investing is viable because of the lower prices of commercial and residential properties in the area and the strong prospects for economic recovery for Atlanta as one of the largest metro areas in the nation.
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