Georgia's Foreclosure Numbers Haven't Caught Up to Its Distress. Creative Investors Are Moving Into the Gap.

Foreclosure activity has been climbing nationally for more than a year. ATTOM Data Solutions reported twelve consecutive months of year-over-year increases in national foreclosure filings as of early 2026, even as levels remain well below historic norms. Georgia is one of the states where that climb has been sharpest: ATTOM’s mid-year 2026 report put Georgia among the states with the largest annual increases in foreclosure starts, up more than 50% year-over-year by some measures, with roughly 8,100 starts recorded in the first half of the year alone, a pace of a little over 1,300 a month.

According to Don DeRosa, a 30-year real estate investor and coach based in the state who runs a coaching program called Property Protege Group, that pace is still well below what the state was seeing before the pandemic, when Georgia foreclosures averaged an estimated 5,000 to 7,000 a month. The gap matters, in his view, not because current numbers are alarming in isolation, but because the conditions that typically produce foreclosures – job losses, high debt loads, rising costs – haven’t gone away. Homeowners are falling behind. The filings, on his read of the market, simply aren’t keeping pace with the underlying distress.

Two Kinds of Distress

For investors trained in creative deal structures, that mismatch is becoming a central feature of the current market. DeRosa, who also buys roughly two houses a month through his own investing business, says the landscape is splitting into two distinct categories of distressed homeowners, and each requires a different approach.

The first group consists of homeowners who fell behind during the COVID era and were allowed to accumulate enormous arrears without facing foreclosure. DeRosa describes going into living rooms where homeowners owe $100,000 to $150,000 on mortgages that lenders have not yet moved to foreclose. He says he currently has three homeowners in his CRM who are $180,000 behind.

The second group is newer. Banks have started returning to pre-COVID enforcement timelines – initiating foreclosure proceedings after three or four months of missed payments – and reinstatement amounts for these borrowers are coming back to the $10,000 to $20,000 range that was typical before the pandemic.

“You’ve got two different, distinct groups out there,” DeRosa says. For investors, deal sourcing now requires distinguishing between these two pools. A homeowner $150,000 in arrears presents a fundamentally different negotiation than one $15,000 behind, even if both are technically in distress.

Why Creative Structures Are Getting More Relevant

The math on conventional acquisitions has gotten harder. DeRosa points to starter homes in Atlanta now priced around $460,000 – manageable at a 3% or 4% mortgage rate, but increasingly out of reach at 7.25%, especially against a national average income he estimates at roughly $50,000. That affordability squeeze doesn’t just affect retail buyers. It compresses margins for fix-and-flip investors who need to sell into that same constrained buyer pool.

Subject-to deals – where an investor takes over a seller’s existing mortgage payments and receives the deed without triggering a new loan – offer a workaround. The investor inherits the seller’s loan terms, often at a rate far below current market levels. It’s a technique that gets more attractive precisely when there’s a wide gap between legacy mortgage rates and current ones, which is the environment the market is in now. DeRosa is also advising students to consider owner-financing properties on the exit side rather than selling outright – holding a wraparound mortgage for three to five years and waiting for rates to settle. “I think with the way things are going right now, you can take over a house subject-to or wraparound mortgage and then turn around and owner-finance that out again instead of selling it, because interest rates are too high,” DeRosa says.

The Paperwork Problem

The subject-to technique has gained visibility online, and DeRosa says not all of it is well-taught. He draws a hard line against wholesaling subject-to deals – a practice some educators promote – on the grounds that it breaks the trust relationship with the seller.

“When I sit down with someone and say I’m going to take over your property subject-to, I’m promising them that I’m going to take over their payments. They’re trusting me,” he says. “A lot of the stuff that’s being taught today, you don’t really have that.”

The single biggest risk factor, in his view, is the documentation itself. Poorly structured paperwork is what triggers lenders to exercise the due-on-sale clause – the provision that allows a lender to demand full repayment when ownership changes hands. “What you do with the paperwork is the single biggest reason a bank will call it due,” DeRosa says. “If you do it right, there’s no risk for the bank. If you do it wrong, they go, okay, well, we’ve got some issues here, so let’s just call it due.” DeRosa says that, to his knowledge, none of his own deals or his students’ deals have triggered a due-on-sale call so far – though he notes there’s no way to track outcomes across every student’s transaction with certainty.

Conservative Positioning in a Shifting Market

DeRosa’s current advice to students inverts what many investors default to in competitive markets: spend more on renovation while pricing conservatively.

“Most people at this point go, okay, well, I’m only going to put paint and carpet in this. Not me. I’m going to throw the kitchen sink at it,” he says. “But at the same time, I’m not going to be the one that sits out there as the highest-priced house.”

In a market tilting toward buyers, the properties that move are the ones that stand out on condition without triggering price resistance. DeRosa says his goal for students is to stay within a strict deal-selection range – profits, by his account, generally in the $80,000 to $120,000 band on a flip, rather than chasing volume. “If it doesn’t fit into that box, then don’t buy it. Don’t be a motivated buyer, because right now, if you become a motivated buyer, three, four, five months from now you will also become a motivated seller,” he says.

DeRosa says he is also telling students to treat this period as preparation. Pre-foreclosures in Georgia are rising, and he reports receiving more distress calls per week than at any point in the last two years. “Now’s a great time to sharpen your saw,” he says. “Now’s a great time to learn the real estate technique – subject-to, wraparound mortgages, all the creative techniques – because I think they’re all going to come around.”

About the Expert: Don DeRosa is an investor and coach with 30 years in real estate who runs a coaching program called Property Protege Group, focused on the Atlanta, Georgia market.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.