Are You Using Your Lender as a Source of Market Data?
One source of market data that I don’t hear investors talk about very often is their lender.
Lenders that operate across multiple states can see where investors are actually borrowing money and closing deals. That doesn’t automatically mean those are good markets, but an increase in capital being deployed can be a useful signal to investigate.
I was looking at origination data comparing the current period with the previous period, and several smaller MSAs stood out:
- Pottsville, PA: loan count up 49.1%
- Gainesville, FL: up 46%
- Mansfield, OH: up 37.9%
- Sebring, FL: up 31.3%
- Bend, OR: up 30.8%
- Greeley, CO: up 30.6%
- Ogden, UT: up 25.3%
- Lynchburg, VA: up 23.7%
- Lawton, OK: up 21.2%
This data needs context. More originations could mean investors are finding opportunities, but it could also reflect lower price points, new construction, refinancing activity or one company becoming more aggressive in that market.
Still, if I saw private capital consistently moving into an MSA while prices were reasonable and rents remained strong, I would want to understand why.
Do you ever ask your lender where they are seeing activity increase? More broadly, do you pay attention to where lenders and other companies are deploying capital when deciding which markets deserve a closer look?
I’d also be curious whether anyone here is actively investing in one of these markets and seeing the same trend on the ground.