When we decided to build REI Transactional, we were strategic in choosing where to focus our loan origination efforts. The Southeast, particularly North Carolina, South Carolina, and Georgia, offers dynamic opportunities for real estate investors, driven by robust population growth, a thriving economy, and favorable market conditions. Let us walk you through why we see these three states as prime lending territories, backed by key statistics, local expertise, and a deep understanding of borrower needs.
North Carolina, South Carolina, and Georgia have all seen remarkable population growth in recent years, making them some of the most attractive areas for real estate investment. According to the U.S. Census Bureau, North Carolina experienced an annual growth rate of 1.3% in 2023, adding over 130,000 residents last year alone (source). Georgia and South Carolina are following close behind, growing at rates of 1.2% and 1.1%, respectively (source). This continuous population growth is driven by both migration and strong family formation rates, positioning these states as the epicenter for housing demand.
Family formation rates are an often overlooked indicator of housing demand, but in these states, they are robust. The Southeast is attracting young professionals, families, and retirees, all looking for affordable yet high-quality living. North Carolina and Georgia, in particular, have seen increasing numbers of millennials choosing to settle and start families due to the affordability of housing, job opportunities, and a high quality of life. This demographic shift is creating sustained housing demand, which leads to promising opportunities for developers, flippers, and landlords—the very investors we serve.
The current real estate market conditions in North Carolina, South Carolina, and Georgia are highly favorable for investors, with homes continuing to appreciate year over year. For instance, home prices in North Carolina appreciated by an average of 9.1% over the past year (source), while South Carolina and Georgia showed similar strength at 8.7% and 8.4%, respectively (source). This consistent appreciation offers an excellent upside for investors looking to acquire, renovate, and resell or rent properties.
Additionally, the average Days on Market (DOM) for properties across these states has remained below the national average, signaling high demand and limited supply. In North Carolina, homes average just 32 days on the market, compared to the national average of 45 days (source). Similar trends can be seen in South Carolina and Georgia, both averaging around 35 days (source). These shorter timelines mean investors can quickly exit projects, redeploy capital, and optimize their returns—a significant advantage in the world of real estate investment.
It’s not just demand that’s rising—the supply is also being thoughtfully expanded. In 2023 alone, North Carolina approved over 80,000 new residential building permits (source), while Georgia approved 70,000 (source) and South Carolina 45,000 (source). These states are paving the way for growth and new opportunities for builders and developers. Such proactive permit activity is an encouraging sign for anyone investing in real estate, as it indicates that local governments are supportive of sustainable growth.
Another important reason we focus on North Carolina, South Carolina, and Georgia is due to their favorable commercial usury laws. Each of these states has regulations that allow for more flexibility in private lending, which works to the advantage of our borrowers. The interest rate caps in these states are more accommodating compared to other parts of the country, allowing us to structure loans in ways that are beneficial to both our investors and borrowers without running afoul of usury limitations.
For instance, Georgia and South Carolina allow higher interest rates on commercial loans than many other states, providing a safer environment for lenders to extend capital while remaining compliant. This flexibility is crucial for us as a lender, enabling us to provide funding at competitive rates while still mitigating our risk.
One of the key differentiators of REI Transactional is our deep local expertise. The owners of the company have extensive knowledge of these markets, built over years of experience managing rental properties and flipping homes throughout North Carolina, South Carolina, and Georgia. We’re not just lenders—we’re investors who have been in the trenches, understanding the nuances of these markets, the neighborhoods that are up-and-coming, and the local regulations that affect profitability.
This hands-on experience gives us an edge. We understand the unique challenges of real estate investing in these states because we’ve lived them ourselves. We’ve navigated everything from market shifts to zoning changes and contractor availability—knowledge that we now pass on to our borrowers through strategic lending solutions and a partnership mentality.
These favorable economic trends provide a number of important advantages for both borrowers and investors:
1. Increased Borrower Equity: The increasing property values mean that more borrowers have substantial equity in their existing assets, which can be used as collateral for new loans. This equity serves as a strong security base, reducing risk for both the borrower and the lender.
2. Active and Vibrant Market: The sustained demand for both new and renovated real estate products ensures that real estate investors can operate in a more active and vibrant market. With strong demand comes the opportunity for quick project turnovers, allowing investors to maintain a high level of activity and capitalize on profitable opportunities.
3. Stable and Appreciating Asset Base: The appreciating asset base helps to protect the valuation of the collateral we use to secure our loans, providing a stable foundation that benefits all parties involved. This stability is a cornerstone of our strategy, ensuring that we can continue to offer attractive terms to our borrowers while protecting our investors.
The decision to focus our lending efforts in North Carolina, South Carolina, and Georgia is rooted in both data and experience. With strong population growth, high family formation rates, a healthy balance between housing demand and supply, favorable usury laws, and unparalleled local expertise, we see the Southeast as the perfect environment for real estate investors to thrive. Whether you’re a seasoned investor or just getting started, our goal is to be your trusted partner in realizing the opportunities these vibrant markets have to offer.
Interested in exploring lending opportunities with us in the Southeast? Reach out today to learn how we can support your next real estate venture.
