EP NNA 90 – The Top 40 Markets For Distressed Notes (40-21) In 2021 – Part 1

NNA 90 | Top 40 Markets

NNA 90 | Top 40 Markets

 

What’s your game plan for 2021? In this episode, Scott Carson breaks down a list of the first half of the top 40 markets for distressed note deals in 2021 and beyond. He ranks these markets by his own ranking system by a variety of elements, including percentage of 30-89 day lates, 90+ day lates, % of vacant homes, unemployment rate, number of foreclosures (pre-covid), median income, median home price, home affordability, and available programs at the state or county level. Scott believes that there’s plenty of opportunities if you know where to look, but you have to do your research. So don’t miss out on this information-packed episode. Tune in!

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The Top 40 Markets For Distressed Notes (40-21) In 2021 – Part 1

Hopefully, you had a rocking weekend. It’s a beautiful Monday here in Austin, Texas. Hopefully, it’s beautiful wherever you are. We’re honored to have you here whether you’re here domestically or internationally. I know we’ve got people from across the globe that read this or the catching it early in the sunrise or late in the day on the West Coast or the East Coast or even the other coast to hop across the pond. Anyway, I’m jacked up for this call. I’ve been doing a lot of work to bring this information to you. I was honored to speak at another event. They asked me to come on, talk a little about some of the future opportunities in the market here in the next 12 to 24 months.

NNA 90 | Top 40 Markets

Top 40 Markets: There are plenty of opportunities if you know where to look, but you have to do your research.

 

That’s what spawned this. I came across some articles that I melded together to come up with our own top 40 market lists. Before we dive into that, thank you so much for reading. We host these every Monday night, excluding travel, vacation and holidays but you can always catch us here. You can always go to WeCloseNotes.tv, that’s our YouTube channel, to catch all the episodes. You can always try going to NoteNightInAmerica.com. For those of you that are reading for the first time and you don’t know who I am, I’m known across the country as the Note Guy.

I’m an active real estate investor for 2002. I’ve been buying distressed debt since 2008. I’ve been doing it, not the longest but that would be two lifetimes for most investors who have less than a ten-year experience. I’ve been buying solely focused on many nonperforming notes to write from banks and hedge funds. I’m excited about this topic. There are a lot of opportunities out there. I’ve purchased over $1 billion in distressed mortgages on both residential commercial. I’m investing in roughly about 30 different states across the United States. Our markets are always constantly changing. I call Austin, Texas home but I’m not buying the stuff here. I’m also the host of the Note Closer Show Podcast. If you’re on Clubhouse, check out the NCS Note Investing Club as well.

If you’ve got an iPhone, I’m the host of that. We were live streaming this to that on Clubhouse as well, the audio side of things. If you’re on there, give us a shout and connect with me. I’ve helped thousands of investors buy nonperforming notes. The thing I’m most proud of is helping a lot of people capitalize not only on the distressed market but those looking to capitalize on the market. There’s plenty of opportunities if you know where to look but you have got to do your research. You can’t just be relying on, “I’m going to go and buy from the same sources. I’m going to go buy from the same websites. I’m going to buy in the same states because I have everything done.”

I get it. The same states can be very valuable to you. David, I’ve always loved nonperforming notes. You’re a little confused. I do by performing notes but I love nonperforming notes. I love working on the nonperforming side and getting people back on track with the homeownership and keeping them in their house. The biggest thing is creating win scenarios for the bank, the borrowers, ourselves and our investors out there. We’ve got a lot to cover. I am in Austin, Texas. That has been home since 2001 since I graduated college, South of here. I traveled across the country and the world. What I love about note businesses, you can do this from anywhere, whatever your location is, with a cell phone, a computer and the internet.

Let’s talk about it. Before we dive in, I want to make a big announcement. From 9: to 5:00, it’s an all-day event, not a half-day event, we’re going to spend the day. If you want to join in and hear me call banks for the day, spending the full day calling asset managers at banks. We’re going to be featuring the mo Texas foreclosure list off of Harris County. Something that we covered at the beginning here. We’ll be covering that as we’re calling banks for the nonperforming notes to get lists sent to us. You’ll be able to listen to if you go to CallingBanks.com, you can register, you can RSVP your spot there. It’s $99 for the full day. You’ll get the replay. We will record it the entire time. Something for you to take advantage of if you’re looking up lists like me. You can hear it from me, be a fly on the wall as I’m calling banks. You can peek over my shoulder and be ready to rock and roll.

NNA 90 | Top 40 Markets

Top 40 Markets: The best states are Idaho, Montana, South Dakota, Wisconsin, and Utah. Those five states have less than about a three-month less than a 4% default rate.

 

Anyway, have an idea of where the opportunity is. You always have to look back at history. What happened back years ago? Is that going to happen? Will it happen now if things will be different? We can all agree there have been good and bad on both things. Some of the good is people have learned how to pivot. They’ve gotten more creative in their marketing. They’ve gotten creative in doing business virtually versus having to go to the office.

We know what the bad is. People were getting sick and losing their jobs, businesses closing down. At the peak, what I did was the comparison of where the peak numbers were years ago and compared them to where they’re at now. This is for COVID. In the beginning, the worst part here, April, May 2021, unemployment across the country was at 14.88%. It’s calmed down roughly right at 6%. Those are the features out nationwide from the Bureau of Labor Statistics. We looked at the peak. It’s peaked at 8.22% in defaults, 1 in every 12 borrowers was in default. Not 30 days behind, that number is a whole lot more but at least 90 days behind, peaked at 8%, it’s under 8.25&, that’s April 2021.

Now, we’re at 4.18%, which is still high, over double what it was prior to COVID but it’s coming down almost to half. 2.4 million people were 90 days plus late. We’re at 2.1%. That number hasn’t changed. 2.1 million people are still at least 90 plus days late. Forbearance agreements peaked at 9% of all the mortgages originated. We’re at a rate of 4.9%. Not quite half of where we were at the peak here. You think about what’s going to happen. Everybody keeps talking about looking for this foreclosure tsunami. “Where is the wave going to hit? I’m going to go get my real estate license and become an REO agent. I’m going to call the banks. I’m getting prepared for that REO.” There are things that are going to lay that, if not make it impossible for you to find REOs. We’ve seen executive orders push out evictions and foreclosures to the middle of 2021.

Some states have more dramatic foreclosures and evictions. Some are starting over and starting to start foreclosures. Some have done a clean slate. It varies across the board. We also know that different states have different foreclosure timeframes. Whether it’s a judicial foreclosure like New York and New Jersey, they could take you 24 plus months, to a non-judicial foreclosure like Texas or Georgia, they could see things in 30 days or less. We also know things that are affecting the foreclosure wave is what type of mortgage you have. If you’ve got a government-backed loan, FHA, a VA, Freddie Mac, Ginnie Mae, those things are being kicked down the road as far as forbearance and foreclosure stoppages.

Whereas if you’ve got a second home, an investment home, a non-owner occupied, you’re trying to rent it out and aren’t getting people in it, you’re responsible for those. Is this time around differently from a large percentage of homeowners out there have equity above their balances this time around versus last time where we didn’t have a lot of big negative equity. Also, look at migratory patterns. Not of birds but people across the country. I’ll give you an example. Here in Austin, we’re getting a lot of people moving to Austin from California. That’s affecting inventory and avoiding a lot of foreclosures because people are selling their houses for $25,000, $50,000, $100,000 over listing sites unseen because there’s such a lack of demand.

You only need to look at what’s affecting that stuff and realize, if it’s a hot market like Austin compared to San Antonio or other places, you’re going to have a peak or a valley foreclosure. Looking at the individual employers on a city-by-city basis, as far as industries or employers, especially major employers like colleges, who still don’t have students coming back or industries have been laid off like tourism hospitality, the cruise industry. All those have been affected by COVID-19 in a lot of ways. You need to know what’s going on in the city and looking at where the big foreclosure can be.

It says it all on this one, sharp right here. This is mortgage delinquency, taking them straight from the MBA association, talking about delinquency types, as far as the type of loans. That blue line at the top is the FHA loans. First-time home buyers, FHA. 14.65% of all FHA loans are in default. That’s your first-time homebuyer. I hate to say it but before, that’s been the loan type where many banks have donated the 3% down payment. They’ve paid towards $10,000 and beyond towards closing costs. People have been getting into their houses with subpar credit scores and not having to put a lot of skin in the game. That’s why there’s a big default. Obviously, purple is VA loans, are next. You have all the other loans that are somewhere around 6.73%, roughly.

Conventional loans are 5.19%. Why are those numbers a little bit higher than the 4.19%? These are a blended base of everything. You have everything being thrown into 4.19% but here’s what you see the most on a lot of banks and institutional lenders providing that type of debt. There is a default of those things. When you compare it to the wealthy and the poor. This is a heat map, dark red, almost maroon is the poorest. Alabama, Mississippi, Louisiana, New Mexico and West Virginia are the top five poorest states. You look at the top 50 states, the richest, you have Hawaii being number 49.

You got Utah at 48. Minnesota was a surprise at 47. New Hampshire in there. Massachusetts is doing well. Also, Maryland was also doing good stuff at 46. It varies across the poor. You’re going to see more deficiencies in the poorest states than you will in the richest states for the most part out there. Every city is going to have defaults for the most part, excluding the top hottest markets out there. There’s going to be an opportunity if you know where to look and you’re doing your homework.

This episode is a little about doing some of that homework. It’s not, say, “I’m here to try to convince you to buy in one city particularly. No, you still need to do your own due diligence. Some of these states or cities I talk about, I would never buy-in but there are opportunities if you’re a local opportunity if you have some systems. We’ll talk a little about that as we go through. We’re not going to get through all 40 states or all 40 cities.

We’ll get through the top 40 through 21 then we’ll have part two being next episode, where it’s the top 20. There’s a lot of opportunity in 4 through 21 as well for you. If you look at potential US home losses, this is a map that scares me. I did not fade it. It came and faded like this. Here’s a look at the share of people in each state who are most at risk. Louisiana, 56% of their population expected to be in eviction or foreclosure. New Mexico, 52.7%. Those are the two states that are the highest. When you start looking at massive numbers, here’s how the top 50 states plus DC pan out.

This surprised me, Texas is expecting to have over 719,000 people likely to be foreclosed on or evicted. California is about 30% less, 510,000. New York is 509,000, 510,000. Florida is a distant fourth at under half of what Texas had at 314,000. North Carolina’s 5th, New Jersey, 6th, Ohio, 7th, Georgia, 8th, Illinois, 9th, Michigan, 10th. The least amount is Vermont, probably a bunch of people up there. Burt’s beeswax living in tents, 4,400 people maybe. North Dakota, where you got more cows or bison than you have people, 5,500. Delaware 6,600. Alaska, 11,000, nobody wants to foreclose or evict you from an igloo. You need to know this when planning for your note business. I got this chart from the Visual Capitalist, you can pull it up online very easily. Thank you for providing this. That should tell you the numbers and some idea of the states you need to be looking at.

NNA 90 | Top 40 Markets

Top 40 Markets: The state of Kansas has 200 million allocated for rental assistance programs.

 

If your state doesn’t fall on at least the top 20 states or the top 25 or top half, you’re probably spending time. There are going to be cities that are going to be impacted worse than others. Austin’s not going to be impacted but there are other cities in Texas that are going to be dramatically affected. You’re going to see a lot but it’s a much bigger state and a lot of other cases. There’s not a single city in California that hits our top 40 list. Let’s talk about some of the states that have the highest and lowest rate of 30 plus days past due. This is your first indicator of people in trouble. States that are the highest since December 2020, Louisiana, Mississippi, New York, Maryland and New Jersey are the top five states with people that are at least 30 days past due to the least amount.

The best states are Idaho, Montana south Dakota, Wisconsin and Utah. Those five states have less than a 4% default rate as far as people did not default 30 days late. When you compare that looking at the ten largest metropolitan areas, see how those states and the largest metropolitan areas match up with the highest number of 30 days past due. Miami, a hot market out there but unfortunately, it is an overpriced market compared to what the average income is. Almost 10% of Miami is at least a month behind. Here’s the thing, 10% of America was at least a month behind before everything started off. New York, about 8.5%. Houston, over 8%. Las Vegas 8%. Chicago is roughly 6.5%. Washington DC, over 6%.

You can see how it goes from there. LA, Boston, Denver and San Francisco. Those are the ten largest metropolitans. You can see how they match each other. When you start comparing the default rates, the 30 days behind and the unemployment rates and start looking at what cities have a higher unemployment rate than the national average, that can give you a good idea of what it’s done. Top markets that have at least a million or more people. Birmingham, Alabama has a very low rate, it’s 3.5%, which is not quite under 70% compared to the national, all the way down to LA. What I did in this chart, I took it in half and said, “National default unemployment rates at 6%, let’s take it right halfway in the middle.” You pull those numbers up, you can see it.

Orlando, Florida

6.2%, Virginia, Memphis, Miami, Portland, Orlando. There are some markets in there all the way into LA, New York, Las Vegas. What I’ve also done too is filter that list. I came across another article talking about top cities and I started implementing what they figured in. They provided a couple of things up there. They are 40 cities out there. I didn’t pick the cities as they ranked them. I took those 40 cities. I liked what they said as far as vacant homes, people that are 30 days behind or 30 to 89 days behind, people that are 90 days over. I also started taking a look at the number of foreclosures per thousand versus homes, the average median home price compared to the income levels and how affordable is this.

We’ve come up with our own ranking system for these top 40. The idea here is where are the opportunities, they’re not in this thing as 40. You need to know where they’re at. The mentality here isn’t to buy and flip. If you’re in a buy and flip mentality, you’re probably going to get burned trying to time the market. You’re should have a buy and hold whether it’s buying the decks and you’re getting it re-performing or buying and holding it and riding out the wave. If it is a longer foreclosure process in an area, you should be getting some deals relatively cheap. Balanced commercial properties, sub $2 million to $5 million in value. There’s a lot of opportunities. We are not going to talk about commercial loans. We’re going to talk primarily about single-family homes.

Opportunities buying that and restructuring alone for the tenants or the borrowers in place. There may be vacant commercial properties into some other asset class that is needed by that city. Hotels to apartment, big box to self-storage, offices storage to executive space. Those are the things that we’re seeing needed the most across the board. We are going to be having a note expert on here, buying hotels. Vacant hotels are struggling to get them converted. Here’s where we see a lot of the opportunities and why these 40 fall into. Buying loans on single-family residences and modifying loans and buying loans that are non-government backed. If something weird happens and Biden comes out with administration and he puts a foreclosure stoppage to every type of loan out there, we’re going to have a civil war. There will be riots in the streets.

He’s only going to stick to the government back loans. Honestly, there are going to be a lot of people that need to get paid. A lot of investors need to get paid. A lot of mom-and-pop investors out there that have second homes, rentals, Airbnbs, they don’t have the reserves to go without. The biggest opportunity is buying this stuff now and holding it for cash flow, holding on for a while, foreclosing and taking the property back and then holding onto the asset for a while. Before you get to any questions, hopefully, that makes sense for you before we dive into the first half of the top 40 markets. If you’ve got some questions. Please, don’t ask me about specific states.

Every issue is a little bit different. We’ve done a lot of research and I’ll share with you my madness to what we looked at but let’s keep the questions for the very end for you. I promise I’ll be here as long as you need to be, to answer any questions you have about these twenty markets we’re going to cover and we’ll go from there.

Top 40 markets for distress notes. This is based on our opinion, our ranking system and what we did. Before I do that, I do have to give a big shout-out. I get so many people. They’re like, “Scott, how do I invest out of state? How do I find people out of state to help me with BPOs, O&Es, vendors, property preservation?” You need to talk with Dickie Baldwin at BaldwinAdvisoryGroup.com. I have to give a big shout at him for sponsoring this episode.

Check them out, Baldwin Advisory Group, your one-stop-shop for your vendor list for the most part. He’s done a great job. We’re so proud to support Dickie. When he does, he does a lot with our clients. We use him. I highly recommend his services. He’s got an amazing amount of vendors that support him as well. If you’re worried about investing in another city, talk to Dickie, he can help you. One bag for all your real estate needs. Let’s talk about how did we rank these cities. We took individual rankings, 1 to 40, on the percentage of homes that were 30 to 89 days late. That was individually, also another ranking of how they rank for borrowers that were 90-plus days late. We looked at how many homes were vacant in a particular city.

That’s an important thing to keep in mind. There’s hardly any vacancy. That’s a good thing. If there’s a lot of vacancies and they’re already getting hit far, that could be a very bad thing. We also looked at foreclosure rates prior to executive orders. A lot of cities have zero foreclosures now. We went back and looked at, what was the foreclosure? What was the last rate of foreclosures we could see back in January and February of 2021? Do we think it’s going to get better or it’s going to get worse? Whenever they get around, we know it’s going to get worse in some fashion. To give you a bit of an idea of how many they have per capita. We also looked at existing unemployment ranks, how each city ranked compared to the national average.

Top 40 Markets: If you’re buying in a city with more than 200,000 people, there are some programs available for you out there for tenants, which is not bad.

 

We also looked at home affordability these days. It’s so important. How do we calculate that with each city having different average incomes versus average median home price? We took the median income and divided that by the median home price. An average divided by an average. When you see a low percentage, that means it’s an unaffordable city. A high percentage means the income coming in could pay off the house in 3 years or 2 years. If it’s ten years, one of them, which was one where they got 9% overpriced, that means it’s unaffordable. You are outpacing your median income. There are a few markets in here that are like that. We ranked that. We took 1 through 4 to cross them, rank them individually on each of these 6, 7 categories.

We took an average across the different categories that helped us come up with a number 1 through number 40. If you want a method to the madness, don’t worry about it. Email me. I’ll be glad to send you the spreadsheet and you can make heads or tails of it. For what we’re covering, this is short and sweet for you to help identify. Another thing that we did that didn’t affect our ranking is I went and started looking, “Are these cities starting to see foreclosures? Is this state starting to see foreclosures?” Also, I looked at, “Are there government programs in the city, the county or the state that are there to help the tenants or your borrowers out as an opportunity?”

Topeka, Kansas

Some states have a lot of opportunities. In other states, it’s business as normal. “You no pay, you no stay.” I’m going to focus on numbers 40 through 21 and then top 20 next episode. We don’t want to be here all night. There are opportunities in every market. Some of these cities might surely surprise you as they did me. Let’s start it off. Number 40, Topeka, Kansas. Rock Chalk, Jayhawk. I know that’s Lawrence, Kansas but Topeka, Kansas is a Rock Chalk state. I was surprised by this. I own notes in Topeka. There are 60,000 housing units. 2.7% of all the households are behind at least 30 days. 30 to 89 days, even 90 plus, at least 2.7% of households are behind of some sort about 3%.

The foreclosure rate was the third-highest on the list, though. 1 out of every 2,800 homes were in foreclosure. It did have nice high affordability right though, 36%. The income is roughly 36% of the home affordability. It was the sixth-highest on the list, which is a nice rank. An average of eight across categories, eight is the lowest. That’s why it was number 44 across the board. Median home price of $133,000. It was not also bad either. I’ll give you an example, Kansas does take you about 4 to 5 months to foreclose. It is a judicial foreclosure. It’s a faster foreclosure statement on the judicial side of things. You also brought up next to Missouri. Missouri is a much vaster state but Topeka is a little bit longer foreclosure process.

Cedar Rapids, Iowa

That’s why you’re going to see more opportunities there because things are dragging out a little bit there for you. The State of Kansas has $200 million allocated for rental assistance programs. Tenants, they’re in place. There’s an opportunity. If you buy a nonperforming note, work with your bar. It’s a hardest hit fund but work with your bars and tenants if you’re buying a non-owner-occupied asset. Have them go out and apply for it. Have them go through this to get rocking and rolling. Topeka, I bought it there before. It’s not a bad city. It’s not your biggest city in Kansas but as a state capital, there are some opportunities there for you. Number 39, which I only hear the city most of the time when I think of a movie, Cedar Rapids, Iowa but I’ve been surprised.

I started to see some more nonperforming notes trickle out through the different things in Iowa. This made me sit up and take notice. Cedar Rapids, I’ve been through there once or twice on the way to Minnesota as a young kid, nothing any relatively new but there are 62,000 housing units about the same size. 2.7% of households are behind, anywhere from 30 to 90 days or more behind. 1 out of every 2,700 homes is in foreclosure though prior to this. It’s the second-highest who’s been impacted pretty badly. It does have a nice affordability ratio. The 37% was the fourth highest on the list as far as affordability, which is interesting compared to some of the bigger markets around it, which may make it desirable. You see a lot of people moving to more affordable places. Cedar Rapids is not bad.

It did rank an average of twelve across all the different categories we have. The home prices are a little bit higher than Topeka at $157,000. 3% of homes are vacant in Cedar Rapids. The 3% might not seem like a lot but that screams rentals, university students, out-of-state landlords or out-of-state owners that may be struggling. They can’t put the blame in there. There is some opportunity in there. It’s a judicial foreclosure state. Iowa takes about six months to foreclose. In March of 2021, they created the Iowa Homeowner Foreclosure Prevention Program. This is to incentivize. It’s a program for lenders and your homeowners that will provide up to 4 months of payment assistance plus 2 months for arrears.

Technically, you could get 2 months of back payments plus 4 months going forward, 6 months on the homeowner foreclosure prevention. I like this in Iowa. Cedar Rapids being one of the bigger cities up that neck of the woods, I thought this was an opportunity for you in Iowa. If you keep something in Cedar rapids, I wouldn’t be throwing it away. In Iowa, I would be looking at it. That’s why this made the list. Don’t ask me specific questions about programs. You need to go to the website for these and figure it out yourself. In most cases, you’ve got to get the borrowers to apply for it and work through it but some opportunities there. There will be another hardest hit fund. What you’re seeing is a lot of states and counties are even creating their own aspect to come in. Whether it’s rental assistance or a homeowner foreclosure prevention system, you’re going to see that prevalent throughout a lot of these top 40.

NNA 90 | Top 40 Markets

Top 40 Markets: You’ll see more opportunities in Hartford, Connecticut, where more affordable homes are going to foreclosure.

 

Jacksonville, Florida

The one on the opposite side, a little bit further South, God’s waiting room State of Florida, Jacksonville. I’ve invested in Florida and Jacksonville for quite a while. Jacksonville was the last major market in Florida to rebound and recover back. It was obviously the most Northern market compared to Miami, Fort Lauderdale and stuff like that. They’ve got 397,000 housing units. Over 3% of the households are behind. A foreclosure rate of 1 every 4,000, the ninth-highest on the list. Decent home affordability wasn’t high, it was 25%, which is not bad. It was the 27th highest on the list. Right in that mid-range there. Four years to pay off your house when your income is not too bad.

It ranked an average of fourteen across all categories. It was not quite in the middle but a little better. Median home price, the highest so far, $218,000. Median income was roughly right around $50,000. It was a judicial foreclosure state, Florida. There are foreclosures starting to start back up there. It takes 8 to 14 months to foreclose. You’re going to start seeing them trickle in and then after June 2021, you’re going to see the mass amount of foreclosures hitting Florida coming to the end of 2021 or the first quarter to mid of 2022. This is why the note business is important. You can start tapping into deals now and be prepared to ride the values as they increased a little bit because values are going up but also rebounding side and helping borrow you back on. Here’s another nice monetary thing, Florida has put another $850 million together called the Florida Rental Assistance.

Louisville, Kentucky

It’s for cities with 200,000 or more people. There are other programs for smaller cities in some cases but individually, to check on a county-by-county basis. If you’re buying in a city with more than 200,000 people, there are some programs available for you out there for your tenants, which is not bad. Louisville, Kentucky, the Bluegrass State. I don’t usually talk about Kentucky because of the need to either have a $1 million net worth, $1 million lender or a $250,000 bond, which is not bad but there is some opportunity compared to what’s in there. If you’re there locally or you can take that opportunity to get that bond or work with some other people. There’s some opportunity in Louisville in the next 12 to 4 months. It’s got 283,000 housing units.

3.3% of households are behind. 1 out of every 3,600 homes are in foreclosure. This was the fifth highest. That’s why there’s some opportunity. People are behind and they’ve already had some foreclosures beforehand. It had a decent affordability rate of 27%. It was the 24th highest on the list. It ranked an average of fourteen across categories as well. The median home price is under $200,000. That is what screams the most. You start seeing sub $200,000 price ranges as median home prices in established markets. Louisville is not a small market by any chance with 283,000 housing units. There’s some opportunity there to come in, take some stuff down and hold onto it. It’s only about a five-month foreclosure process. Foreclosures are starting to start back up there too. If you step out buying some notes and some debt in this neck of the woods, if you had to foreclose, you will be done by the end of the year, first of the year.

Clearwater, Florida

Kentucky’s also ponied up some money. The Homeownership Protection Center providing resources may help homeowners. It’s a $254 million fund. They put some money together that you may be able to step into and keep borrowers in their houses are stepping by in a nonperforming note and get people back on track, which I like. Clearwater, Florida, Sunny Beach is in Clearwater. This one surprised me that this was on the top 40 list. It’s not too far from Bradenton and Tampa Bay. Clearwater has got some issues. 60,000 housing units. It’s quite a bit smaller than Jacksonville. 3.2% of the households are behind. 1 every 6,300 homes are in foreclosure. This is a higher rate than Louisville, about twice.

Hampton, Virginia

It didn’t have a very good affordability rate. That’s the big thing. You have a lot of people being outpriced there locally, 18.9% home affordability. It was the fifth-highest affordability. It ranked an average of fourteen across categories. The median home price is $257,000. I’ve seen a spike before because of the rehabs and people moving to Tampa and in a lot of areas. It is a similar process to what I see in Jacksonville, 8 to 14 months to foreclose. Foreclosures are starting to back up. There are cities that have more than 200,000 people. They do have that Florida rental assistance for homeowners. Hampton, number 35, surprised me. I hadn’t seen a lot in Hampton until I started looking at some of the things that I was seeing.

I looked back at the tapes and I hadn’t paid attention to it. Hampton has 60,000. 3.7% of households are behind, 5,600 homes are in foreclosure. It had a decent affordability rate, 28%. It was the 21st in the list. An average rank of fifteen across the rest of the categories. The median price was that $200,000 or below. I was like, “Some opportunities there.” It is non-judicial. Virginia, non-judicial foreclosure. Four months to foreclose. They do have a protective order in place that stops 90 days after the emergency filing of Virginia, the government files. I’m willing to bet the foreclosures will start kicking in later in August, if not September 2021 if they don’t extend the foreclosure moratorium past June. There are our tenant assistance programs across Virginia.

If you go to StayHomeVirginia.com, you can take a look at some of the different things that are available for your borrowers if you’re buying the neck of the woods. That’s what I like. There are some opportunities and money from the government. We’ll check it out there in Virginia. It’s not for Hampton but that’s an opportunity there for you as well. If you’ve got renters, there are $524 million in Virginia Rent Relief Program. If you were dealing with renters, you’re buying notes where the tenants haven’t been paying and the borrowers are getting foreclosed and you’ve got a tenant in place, that may be a way for you to take the property over and then assist the tenants to stay in place and convert it from a nonperforming note to a rental.

Tulsa, Oklahoma

I don’t like rentals but if it’s giving you free money and you have somebody that’s living in the property, it might be an easy way to convert them and get that higher payment, like you put somebody in the house and going from there. Some opportunities there for you. Tulsa, Oklahoma is number 34. 188,000 housing units, 3. 8% of households are behind. It’s a pretty good-sized city. 1 in every 3,900 homes is in foreclosure at the peak. It’s got a 33% home affordability. I was surprised at that. The average income is worth about 1/3 of the average median home price, which was the ninth highest in the list as far as that ratio.

An average of sixteen across the categories. The median home price is $144,000. If you can stand living in Oklahoma, a nice home price in a good large city. It is a non-judicial state, four months to foreclose, relatively fast, not as fast as Texas but still relatively faster than other states. They’re starting the foreclosures up. There are some programs available, the Oklahoma Department of Commerce. It wasn’t clear. You have to go check out and see what’s available for tenants or for borrowers to avoid foreclosure stuff.

NNA 90 | Top 40 Markets

Top 40 Markets: Judicial foreclosures are starting up in Orlando, and this is an opportunity for you guys to step in.

 

Winston-Salem, North Carolina

The next one didn’t surprise me. Number 33, Winston-Salem, North Carolina. I spoke in Winston-Salem, along with Raleigh Durham as well. The Tar Heel State, North Carolina has been a very popular state for over a decade. I’ve liked Winston-Salem and bought there for years, 109,000 housing units. It’s a little bit smaller than the other ones but almost 4% of the households are behind, 3.9%. 1 out of every 8,600 homes were in foreclosure prior to this.

The 25% of home affordability was the 25th highest on the list. Not bad, not too expensive. It averaged a ranked of 16.7 across the rest of the categories. The median home price is at right $122,000. It’s less than other areas of North Carolina like Charlotte or the coastline but it’s a very affordable, nice city to be looking in. That takes about 3 to 4 months to foreclose as non-judicial foreclosure. They’re starting the foreclosures back up. The state does offer eviction avoidance programs, nothing about mortgage relief, though.

Hartford, Connecticut

Foreclosure relief, eviction avoidance programs on a state level. That could be one state. You get in, you foreclose, you take the property back if you can’t get them on a forbearance or loan modification. A little bit more of a demand to do something if the state’s not offering beyond June 2021. This one surprised me, Hartford, Connecticut, number 32. Only 47,000 housing units but 3.9% of those are behind. It’s a little bit smaller community compared to some of the others we’ve talked about. 1 in 8,700 homes were in foreclosure. Not the highest, not the lowest by any means. It had a 0.9% home affordability. It ranked nineteenth highest on the list. It averaged a ranking of seventeen across the rest of categories. The home price is $125,000.

That’s the thing that stood out the most to me as an opportunity. $125,000 median home price on that. If it’s a 30%, it’s roughly $40,000, $42,000, $43,000 median income. A little bit of that home price is what stuck out as affordability. It is a non-judicial foreclosure. You’ve got to have at least three months of nonpayment before you can start the foreclosure process and the lenders must comply with reaching out to them. There’s an interesting thing with Connecticut.

It’s Law Days, they call it but they do have a Connecticut Temporary Mortgage Assistance Program that you can tap into for your borrowers out there to stay on track. Connecticut being in an affordable state compared to some other areas, especially nearby other markets is an opportunity for a lot of people. Hartford, Connecticut is coming to my crosshairs to keep track of that. The big thing that is scary with Hartford, 8.4% unemployment rate, way above. Almost 50% above the national rate of 6%. It’s the fifth-highest on the list here. You’re going to see more opportunities here. Affordable homes, going to foreclosure and having opportunities there. Keep an eye out for Hartford, Connecticut.

Birmingham, Alabama

Birmingham has been booming for a while. At number 31, I was surprised it made our list with it. Birmingham is a metroplex with 113,000 housing units. Some of the cities I compared it to, it’s a good-sized unit, 4.4% of households behind them. That’s stood out. 1 in every 4,000, roughly 4,100 homes, in foreclosure. 19.45% home affordability. This is not. It had low affordability because values have been going up quite a bit in Birmingham. Most of them you want to be at 25%, 30%, where you got a $60,000 salary, it’s $180,000. It’s one of the lower affordabilities compared to it. We’ve got some friends that have been investing a lot in Birmingham because it’s been booming.

It averaged seventeenth across the rest of the categories on average. Median home price is still below $200,000, $190,000. Birmingham is a shining star in Alabama for the most part. It should be 2 to 3 months to foreclose. Non-judicial, you do have a redemption period that could drag out a little bit for nonperforming notes. It’s 6 to 12 months. There is no protection going on. It has a nice rental assistance program that they’ve put in place there that you can get past and present months plus three months going forward. You can get a total of 6, 7 months of rental payment if your tenant or a borrower can qualify for an emergency rental assistance program. It might be something neat to consider if you’re buying contract for deeds in and around Alabama that comes in handy.

Killeen, Texas

Birmingham is in our top 40 list here for you. I’ve liked Birmingham for a while. Some of you should be going, “Cha-ching cha-ching,” because it’s still pretty affordable. It’s a booming market, though. The next one, it’s just up I-35, about 80 minutes, an hour maybe depending on how fast I drive, Killeen, Texas. Where the hell is Killeen, Texas? This is near Fort Hood, Fort Hood being the large Army base here in Central Texas. Killeen has often been, along with Temple, a very feast or famine market. It’s outside of that hour timeframe. You start getting Austin investors, they’re looking at Killen in some cases. It’s got 64,000 housing units. 3.7% of the households are behind. 1 out of every 10,000 homes is in foreclosure. That was one of the lowest foreclosure rates across the entire board.

It does have an affordability rate of 28.6%. It ranked on average of eighteen across the rest of the categories. Median home price, $174,000. Part of that has bloomed a little bit in the last couple of years because of Austin and the growth here taking place. A lot of people are going there. It’s an hour away from the airport, all highway miles for the most part. They do have a 4.3% vacancy factor.

Part of that is due to military people being stationed there then being shipped and moved to other places. The vacancy factor is high. Being in Texas, it is a fast foreclosure timeframe unless you’re dealing with the active military. There’s no protection in place here. It does have a higher unemployment rate. That’s why I believe you’re going to see an increase in foreclosure numbers. 7.4% unemployment rate, higher than the national average and the Texas average.

Texas has put together a $1 billion fund called the Texas Rent Relief Fund if you’ve got tenants who can’t pay or you’re buying investment properties out there. I don’t think a lot of people are aware of these relief funds that are available all across the country, not just here in Texas. This is the first time I’ve heard about it, researching this stuff. I’ve heard that Houston had a small one of $15 million that got gobbled up in the first 30 minutes of people calling in for it. $1 billion is something to keep in mind when you start considering back to that infographic that I showed about the number of people facing foreclosure and evictions of over 700,000 across the Lone Star State.

Amarillo, Texas

Number is 29, Amarillo. It’s a city that I never expected. Eighty-six thousand housing units. 4.2% of the households are behind. 1 in every 4,300 homes is in foreclosure before COVID. It has a good size home affordability rate, 34.7%. It’s the seventh-highest home affordability, which is good. It ranked an average of eighteen across the rest of the categories. Median home price, $124,000. It had a higher-than-normal vacancy factor of 3.4%. It’s fast to foreclose in Texas and not anybody stopping them.

NNA 90 | Top 40 Markets

Top 40 Markets: If it’s a vacant home, go in, and you can buy it cheap enough because you can use that 38-month timeframe to foreclose in your favor to get deals.

 

I believe most of the counties here in April and May 2021 across Texas will start having most of its foreclosures kicked back off. It does have a high unemployment rate, a 7.4% unemployment rate. High vacancies, high unemployment rate. You may have to look at the vacancies. If you’re buying something, looking to keep it as a rental, you may have to drop rent rates in a little bit to get it but if you could pick stuff up relatively cheap, great. Amarillo’s not as flashy and shiny as Austin, San Antonio, Dallas, Houston, even Corpus Christi out there but there’s some opportunity up there if you know where to look.

Atlanta, Georgia

I have started to see some things in Amarillo, Killen, Fort Hood. I haven’t seen stuff in this neck of the woods, and they’re starting to pop back up unless that we see. $1 billion Texas Rent Relief Fund is out there for renters up there if you have some. Another one I was surprised to make the list because of all the hotness going on there. We’re talking about Atlanta. It came on our list at 28. It cracked me up there as it’s going through such a big boom but they’re overbuilding a lot of places compared to other areas.

Two hundred fifty-four thousand housing units, it’s one of the largest cities on our list. 3.7% of the households were though already behind. 1 in every 4,400 homes was in foreclosure. This has high home affordability, 34.7%, the seventh-highest on the list, which is not bad. It ranked an average of eighteen across other categories. The median price though is a little high, $314,000. Still less than Austin but it did have 2.7% or vacant. You got to keep that in mind, a little bit longer vacancy factor for you.

Although Georgia is a fast foreclosure state, it’s non-judicial with 1 to 3 months to foreclose. There’s no protection. Georgia did put together a rental assistance program where you can get fifteen months of rental assistance for your tenants. That goes a long way. Not only towards the mortgage but the utilities and other things out there. That’s something to think about. That’s why I was like, “Whoo.” That’s not a bad thing if you need to know about it. For fifteen months, rental assistance to somebody who’s been out of work because of COVID, that’s an opportunity. You can put somebody in our house and they would not even pay the first rent payment for a year and three months, who knows.

Moving on to one of our favorite cities, it’s 1 of the 3 homes that we traveled to a lot in Orlando. This wasn’t a surprise that it made the top 40 list because it has been impacted dramatically with COVID because of Universal Studios, Disney, the tourism industry conventions ceasing there for a while. It’s an opportunity. One hundred thirty-eight thousand housing units. 3.7% of the households were behind. You do get a lot of people that are working 2 to 3 jobs to survive in Orlando. 1 out of every 4,400 homes is in foreclosure. It had a low affordability rate, below 20%, 18.6%. It’s not an affordable city if you’re barely making minimum wage. Fourth lowest on the list. It ranked an average of eighteen across other categories. Median home price, $279,000 but a 6% vacancy. 6% of all homes in Orlando are vacant. That’s people not coming in, tenants not paying, moving out.

People in with family, moving in with roommates. Two-bedroom, two-bath. You got people in bunk beds. A little bit longer foreclosure process, 8 to 14 months to foreclose. Judicial foreclosures are starting up. This is an opportunity for you to step in. There is that big $850 million Florida Rental Assistance. Orlando counts as a city with more than 200,000 and an opportunity for you to step in by some nonperforming notes from borrowers on investment properties outer state that is not there. Out-of-state landlords can be a great target for mortgages that you could buy on those. It does have a high 6.5% unemployment rate. That’s above the national average by half a point. That’s not as extreme as some of the others but that area is going to drag on for a while.

Memphis, Tennessee

It’s going to be an opportunity for you to step in there. Florida is making a comeback in our top four states out there for the most part, including Orlando. A little blues in Memphis. I couldn’t believe Memphis made the list in the top 26 here, but it did. If you’re ready to get some hankering for some Southern barbecue, blues and good live music, Memphis might be a market for you. You got to be careful a couple of ways. Memphis has 301,000 housing units. 85% of those are rentals. 4.8% of the households were already behind, to begin with. 1 out of every 8,400 homes was in foreclosure. 36.6% home affordability, which was good. You can have a house paid off and three years of all you put was your income into it.

Fifth highest on the list. It ranked an average of eighteen across other categories. Median home price is still very affordable, $113,000. I haven’t seen a lot of appreciation like other markets in Tennessee. It is a fast foreclosure market in Tennessee, Volunteer State. 3 to 4 months to foreclose. Foreclosures are starting to start back up. It does have a high unemployment rate in Memphis, 6.3% is the second-highest on the list. You need to know Memphis, not ZIP code by ZIP code but on a street-by-street basis. There’s a lot of regentrification going in the opposite ways. Good neighborhoods are turning to bad. Bad neighborhoods are turning to good. You need to know this on a step-by-step basis but that’s why Memphis, there are a lot of opportunities here because they have a high unemployment rate, high rental market, high vacancy.

Memphis, it’s only a 1.7% vacancy. That’s lower than the rest for the most part, which is okay. That’s why I left it off because it wasn’t that valuable. You have a lot of rentals and people in trouble there. The people are moving. An opportunity there that they don’t have a lot to choose from. Affordability rate, I would be looking at marketing Memphis as one of the cities I highlight when I see and worth getting up there and getting to know it.

Little Rock, Arkansas

Moving on, Little Rock, Arkansas. We don’t usually see a lot in Arkansas. Usually, we will see a lot of rural stuff but Little Rock has started to climb back up. This came on our list of top 25. Under 100,000 housing units. 4.5% of those households were already behind. 1 out of every 8,100 homes was in foreclosure, to begin with. 32% home affordability rate, eleventh highest on the list. It’s affordable. It ranked at an average of eighteen across the board. As you see, there are a lot of homes that ranked 18, 18.1 18.4 across different categories. It’s still below 200,000. As a major city as Little Rock is, still a very affordable home price, $160,000. Non-judicial foreclosure. Foreclosures are starting back up. Arkansas doesn’t have any protection, for the most part. 5.4% unemployment rate, which is lower than the national average but still some opportunity there for you.

Corpus Christi, Texas

You have 4.5% of the households behind, 30 to 89 and the 90 plus fall in that category. I like that because you’ve got some opportunities there for you. Keep an eye out for Little Rock. It might be worth me making a trip down there to see, check it out. Moving on. One of the cities I grew up in, Corpus Christi, Texas, the home of Lou Diamond Phillips, Selena, Korn, you may not know that for the rockers out there. There are a bunch of other people that are from Corpus Christi. It is a city I grew up in. I was surprised to see this make the top 40 list. When we started looking at the numbers, it makes a lot of sense. People don’t realize the Port of Corpus Christi is going through a huge expansion to be the fourth-largest port on the East Coast behind New York, Houston and Norfolk.

Corpus Christi, surprising numbers. I have started seeing notes in Corpus Christi pop up. I am surprised. This is one of the cities that when I see something pop up, I always pay attention to. “Corpus, where I grew up? Is it near my mom or my sister or my friends in the neck of the woods?” Corpus Christi, a good-sized town, 135,000 housing units, about 300,000 people in total. It had the seventh-highest default rate so far, 5.3% of households. This was a surprise to me. Already, 10,000 homes were in foreclosure beforehand. Before COVID, it wasn’t that bad, which is a surprise. Now, it did have a pretty decent home affordability rate, 31.1%.

It’s the fourteenth highest on the list. It averaged nineteen ranking across the categories, still affordable median home price, $181,000. It has the lowest vacancy factor out of any of our top 40 list, 0.4% vacancy factor. It’s in Texas, fast foreclosures there in Nueces County, Refugio, San Patricio, counties around the Gulf Coast there. You got Rockport, Texas, which is up the coast, 30 minutes away. That image shows the downtown bay, Corpus Christi on the bay and the marina there. 9.4% unemployment rate. I found that crazy because it is big like Diamond Shamrock, petroleum, oil and gas industry. Big with the Port of Corpus Christi. The big unemployment rate, 9.4%.

Baltimore, Maryland

It is a high Hispanic population. We have a lot of people living with others. That may be why it’s a low vacancy factor but an opportunity is there for you. We’re going to see a lot more foreclosures in Corpus Christi as things start to make their way through the foreclosure timeframes. Being in Texas, it can be a faster timeframe than other cities and states out there. There is the Texas Rent Relief fund. One of the things about Corpus Christi is in the Lone Star State. Another big city that hit the list. Number 23, it wasn’t a surprise it’s on the list. I thought this might be a little bit further up the list and the top 40 versus number 23 when everything shook itself out. There’s opportunity. I’ve been talking with somebody. Baltimore is an opportunity if you know where to look.

Maryland, Virginia, we’ve talked about this. We’ve talked to a couple of places in Virginia already but Maryland has some opportunity, specifically Baltimore. Two hundred ninety-four thousand housing units. 3.6% of those households are behind already. 1 out of every 2,100 homes is in foreclosure. This was the highest rate out of all 40 of them. You would think that would be higher but if it didn’t rank when it ranked them across everything else, it didn’t make sense but it’s the highest foreclosure rate. Home affordability rate was still decent, right in the middle, 29.8%, sixteenth on the list. An average of nineteen across the rest of the categories. Mean home price in Baltimore, you have a high-end and low-end, $169,000. 3.2% of those were vacancies. That was the eighth-highest. You do have vacant, affordable properties.

A judicial foreclosure state, 3 to 4 months to foreclose. Here’s the big kicker, the big important thing in Baltimore and Maryland as a whole, foreclosures can start up again on April 1st, 2021 if no forbearance request. If you’re a lender and the bar requests a forbearance, you have to give them one. You also have to prove that you offered them a forbearance agreement and they declined it. That’s a big thing. You got to survive. You’re going to have to be paying certified letters, certify that you’re offering them a forbearance agreement in a timely fashion. That’s a big thing. Starting April 1st, 2021, you could start foreclosing again. 5.8% unemployment rate. The median average is the national average out there. There are federal and county rental and mortgage assistance programs available.

Newark, New Jersey

I like that. There’s a lot of money out there to help keep people in their houses. You can buy the debt cheap enough and make it work for you. It’s still a median price of $169,000. That’s not bad. If someone hasn’t paid in a year and picks it up at $0.50, $0.60 on the dollar, you may be able to get some of that money and put it if you’re working with your borrowers out there. Don’t hate me for number 22 here. I make fun of New Jersey. Newark, it made the list but I’m going to share with you why we put it in the list. I use like, “Don’t buy anything in New York, New Jersey.” That’s the case for most people, but if you’re there locally, we have enough people in New York, New Jersey that are part of our network.

I want to bring this to your attention. 114,000 housing units, 3. 2% of the houses were behind. 1 out of every 4,200 homes in foreclosure. It has a very low affordability rate, 10.3%, compared to median income to the median home price. Second lowest on the list. It ranked an average of nineteen across the rest of the categories. Median home price of $342,000. Only 1.6% are vacant across Newark but that’s an important number to keep in mind, 1.6%. I’ll share that. The average timeframe to foreclose in New Jersey is 6 to 38 months. That’s a judicial. There is a New Jersey Foreclosure Prevention Act that went into a case on March 9, 2021. New Jersey has been affected. It was one of the top two markets years ago. It’s one of the top markets now, still being affected because of the unemployment rates and the unaffordability. Here’s the one kicker, New Jersey does have an expedited foreclosure process for vacant homes.

Miami, Florida

While I would not recommend buying occupied homes in Newark, this is the one market if it’s a vacant home, go in and you can buy it cheap enough because you can use that 38-month timeframe to foreclose in your favor to get deals at a lower price. I wouldn’t be buying $342,000 houses. I was still trying to stay below the $200,000 mark. If you can find vacant homes or even pay people for deed in lieu and ash for Keys, this may be an opportunity for you. On the opposite side, where a lot more people are going down to, Viva La Miami, back to God’s waiting room. This wasn’t a surprise. Miami is going to be the last market we talk about. Number 21. I love Miami I’ve. I know Miami is going to have trouble once we started seeing all this stuff because it saw a lot of trouble back then. I got somebody on a Clubhouse, like, “Miami is overpricing.”

Is it? If you look at your economic numbers and the numbers going on in Miami, you’ll see the opportunities. You have a lot of people paying crazy money for it. You also have a lot of people, a lot of international money that is bought there, that they’ve struggled with and their incomes from other places stop. They’re not going to be paying their mortgage, association dues and taxes.

In Miami itself, not Miami beach, 221,000 housing units, 3.4% of those are behind, at least 30 days to 90 days. 1 in every 5,600 homes was in foreclosure. It has the lowest affordability factor on a median income to the median home price, the lowest on the list. Locals that work there can’t afford to stay there. Your owner-occupants can’t afford to stay there, unfortunately. It ranked an average of twenty across the other categories. The median home price is $229,000. You have some high-end stuff. There are some lower-end stuff. You have a 3.9% vacancy factor as well, which is a little bit higher.

It’s Florida. It could take you 8 to 14 months to foreclose. If you’re going to be buying it as judicial foreclosure, foreclosures start back up. We’re excited here. I got a couple of deals we’re working through. Uploading is starting back up in May 2021. Florida does have a rental assistance program. Here’s the big play, behind in Miami you’re going to see condos and single-family homes. You get condos pretty cheap because of the HOAs that aren’t getting paid and they’re cranking stuff out. If you can find that below $200,000 price at a discount, I would gobble it up in Miami. That first-time homebuyer, anything in nonperforming stuff, I would gobble it up and then I would look at stuff that’s been started.

I would prefer it. It’s foreclosure. It’s been started. If it hasn’t and you’ve got to start the foreclosure process, you want to ask for a discount because it is Miami and it is a Florida foreclosure timeframe. It has a 6.3% unemployment, higher than the national average. People living in Miami can’t afford it there. People are getting laid off. That makes it a worse situation. They do have the rental systems we talked about but nothing in place for homeowners. That’s 40 through 21. I want to open up some questions for you. There are twenty markets. What’s a market that stood out for you? I would to ask you before we go anywhere. I almost forgot. I’ve got something I want to throw your way that I would love to find out.

I’m going to launch this. I’m going to find out what areas of the country are your favorite to invest in. I’ve launched this poll. What’s your favorite region? If you’re buying in the New York or New England area, that’s your favorite spot, great. Put that up. We’re talking New Hampshire, Connecticut, Rhode Island, Massachusetts. If you’re East Coast like Maryland, Virginia, we can even say the ACC area, Atlantic Coast Conference area, share there. If you’d like The Big Ten, the Midwest, that’s your Michigan, Ohio, Indiana. If you think about football teams or the big divisions in the areas that you ranked, Pennsylvania would fall into The Big Ten. Southeast, the Southeast Conference, Alabama, Mississippi, Louisiana, Florida.

You could throw that in there as well. The Midsouth, The Big Twelve, that would be Texas, Kansas, Missouri, Oklahoma. I don’t expect a lot of people in the Big Sky like Montana, Idaho, the Dakotas for the most part. We also have the West Coast, California, Arizona, Nevada. You could even throw Utah in there. It’s an important thing for me to keep track of. The Big Ten doesn’t surprise me, the big Midwest out there. Terry asks a question, “What were the requirements to do note investing in Kentucky?” The State of Kentucky wants you to either have a million-dollar net worth, a million-dollar loan available to you or have a $250,000 bond.

NNA 90 | Top 40 Markets

Top 40 Markets: Minnesota is the 47th wealthiest state in the United States.

 

“You mentioned buying non-government loans. Should we not be seeking or calling banks but instead looking for seller finance?” No. It’s not either-or. There are plenty of banks out there that are originating loans off their own books. They didn’t do Fannie and Freddie. They got plenty of other traditional loans, 30-year mortgages that are not government-backed. You can look for seller finance notes. It’s too hard to go find those. That’s a lot of work to have a low response rate. Most sellers that finance notes, they’re not going to take a discount because they’d probably had the seller finance it to overcome the ridges or to be upside down. Subject to deals, not too bad. If you take over of subject to deals from some borrowers with maybe some government loans, that could be an opportunity for you.

SN servicing, they do government servicing. Madison doesn’t do Fannie or Freddie. It doesn’t mean you can’t buy that stuff. You just have to be prepared for the rest of the drag out a little bit but there is plenty of every bank out there that has non-government loans on their books. It originates from their portfolio. Hopefully, that answers your question. “The larger single-family residential funds push for more difficulty so they can take more market share from the mom-and-pop operators.” I don’t understand the question. They’re not pushing because they take more market share.

You’re talking about the caliber homes or some of the bigger REITs that are coming up there now. They’re not doing that. Ashton, “The top markets that stood out to me are Jacksonville, Clearwater and Atlanta.” Good for you. “I’m in Hattiesburg, Mississippi so I wasn’t surprised about Memphis or Little Rock.” There are 1 or 2 markets in Mississippi that make our top 20 list. Hattiesburg is not part of that but I like Hattiesburg because you have the University of Southern Mississippi. It’s not a bad city. I wouldn’t be buying a lot of other areas, smaller markets for the most part but in Hattiesburg, Mississippi, you’ll see some stuff there. Anything around those universities where they’re not going back to school or haven’t been back to school, you’re going to see default pop-ups. There are some opportunities for you.

The Midwest, Big Ten, big chunk of you are looking for stuff, Michigan, Ohio. There are total defaults in those areas. If I lived in Michigan or Ohio, you’re still going to see plenty of defaults in those states to keep you happy. The reason for this is you’re seeing some other markets out there that you may not know and some opportunities that may exist in other areas that may not have stood out for me in the past.

Sunny, “Minneapolis St. Paul does not make the list.” The reason is that it is Minneapolis or even Minnesota is the 47th wealthiest state in the United States. We don’t see hardly any defaults in the Twin Cities. If you’re trying to buy in the Twin Cities, you might want to think about doing something else or look at some different markets. To find that wasn’t at the top twenties, you need to join me next episode. I’m not going to go through and share what those twenty markets are.

You got to show up next episode and you’ll be surprised. Trust me, it will be worth your time to join me next episode and join us as well. I want to remind you all that we do have our Calling Banks Call Blitz Wednesday. For as little as $99, you can get to join me for the full day. You can see who I’m calling. You can ask questions.

You can hear the conversations and get the replay later on of me calling banks and something to go back to and learn and launch. I won’t say we’ll hold your hand but you can see what I’m saying, who I’m calling and what I’m doing. Not only calling them and what I’m saying but how I follow up with them and track them down in other places as well. Join us. You can get signed up by going to CallingBanks.com. It’s $99. That includes the replays. This will not be available for everybody to watch. You’ve got to sign up for it to have access to this. Get signed up there and you’ll have access to it and join me. You don’t have to join me all day. I’ve got it down from 10:00 to 5:00 but join me.

You’ll be surprised and see some of the opportunities that we find out there. How are you financing these guys? Chase. I would highly encourage you to check out our 1-day or 3-day classes, our note weekend class is the Cliff Notes version. We had one for $49. You can get the replays to that, or take one of our three-day Note Buying for Dummies workshops, where we spend a whole day talking about how to raise private capital from investors, IRAs and market properly to raise capital because we’re not going to be using our own money. We’re going to get loans from banks to buy a loan. We’re going to be using capital and investors to fund your deals. We’ll do a big chunk of that during our workshops.

That’s going to wrap it up. Thank you for coming out. Thank you for asking questions. Hopefully, we’ll see you next episode. I’m looking forward to it. I’m excited. I was working on this presentation most of the day. I was like, “This is an opportunity. I’m excited about some of the markets I see. There’s an opportunity. Knowing where a lot of you are located, there’s an opportunity not too far from there. I’m starting to see some more Hawaii assets lately. Hawaii is not in our top 40 list. The Big Island, O’ahu and some other places that they were surprised to see that. Every time I see that I’m thinking you. Be safe. We’ll see you at the top.

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