Texas Investors: Are Foreclosures Creating More Buying Opportunities in 2026?

Question

I've been following the foreclosure numbers lately, and there are some interesting trends worth watching.

According to ATTOM's August 2026 report, Texas had 3,126 foreclosure starts and 1,835 completed foreclosures in a single month. Houston alone accounted for 448 completed foreclosures. Nationally, FHA-backed foreclosure auctions have also increased significantly, rising 47% year over year in Q2.

For investors, this could mean more opportunities to find distressed properties, whether through courthouse auctions, bank-owned properties (REOs), or working with owners before a foreclosure is completed.

Of course, a foreclosure doesn't automatically equal a good deal. Repairs, title issues, liens, occupancy, and the property's true market value all need to be considered carefully—especially when buying at auction.

I'm curious how other Texas investors are approaching this market:

• Are you actively looking at foreclosure auctions or bank-owned properties?
• Have you noticed more opportunities compared with a year ago?
• Are you finding better deals through auctions, REO listings, or directly from distressed sellers?

Are you actively looking at foreclosure auctions or bank-owned properties?

Have you noticed more opportunities compared with a year ago?

Are you finding better deals through auctions, REO listings, or directly from distressed sellers?

With foreclosure activity rising, I'm interested to hear whether investors are actually finding better buying opportunities—or simply seeing more properties come through the pipeline.

Alejandro Lopez · Answer

Seeing the uptick on the ground here in Houston, but more volume hasn't automatically translated to wider margins. On the courthouse steps, competition is still pretty aggressive—institutional buyers and experienced cash groups are bidding anything with a clean title up to 80–85% of ARV. Once you factor in unseen foundation or plumbing repairs, carrying costs, and potential eviction timelines, the risk-to-reward ratio gets thin very quickly.
The surge in FHA notices is especially telling. A lot of those recent borrowers put 3.5% down, which means there often isn't enough equity spread for a traditional deep-discount purchase unless you're exploring creative debt-relief structures. It feels like there's definitely more raw inventory flowing through the pipeline right now, but you have to filter through five times the noise to find a deal that actually pencils. Are you seeing better luck working files direct-to-borrower, or mostly tracking the auction block?

Jay Hinrichs · Answer

I find every market has their whales IE companies that are set up to dominate foreclosure activities as a full time gig. One off investors will have a very difficult time competing and most of the time should just wait for the distressed stuff to hit the OREO brokers. Auction.com etc..

Texas Investors: Are Foreclosures Creating More Buying Opportunities in 2026?

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