4 Practical Steps for Expanding into a New Real Estate Market

4 Practical Steps for Expanding into a New Real Estate Market

2 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

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My partner and I recently took steps to expand into a new real estate market. Here are the practical steps we took to make sure the process went smoothly.

4 Practical Steps for Expanding into a New Real Estate Market

Choose a real estate market to invest in.

Over the past year, my partner and I have been needing to pick another property market to scale operations and diversify. We narrowed our search down to three markets and went to each market to drive the neighborhoods we wanted to invest in. I always recommend you take a trip to wherever you plan to invest — unless you have someone you trust with boots on the ground.

rental-markets-2015

Perform due diligence.

As we began evaluating and going to these markets, we spent time studying the key economic factors for those cities on our short list. Great questions to ask in this process include:

  • Are there large corporations headquartered in the market?
  • Is it a buyer’s or seller’s market?
  • Are people moving to the market or leaving?
  • How are the jobs?
  • What does the crime look like?

The media offers a lot of hype, so make sure to look at the best data, to speak with local experts, and to test the sentiment on the street. You’ll learn a lot about how people really feel just by overhearing casual conversations in the gym, listening to chatter at the coffee shop, and watching activity at real estate offices.

Related: How to Analyze a Potential Real Estate Market for Crime & Safety

Assemble a team.

When visiting these markets, we met with lots — and I mean lots — of local specialists. That included property managers, other investors, contractors, and so on. You’ll also want to line up attorneys, title closing agents, real estate agents, inspectors, insurance agents, and more. It will be difficult trying to do everything on your own. It’s best to assemble a team to allow for you to scale and to have that team in place in advance. BiggerPockets was a tremendous help in finding the right people to meet with in these markets.

Finding the right contractors is always one of the biggest hurdles. So I took the approach of showing up to Lowe’s and Home Depot to scout out the talent. If the contractor has a brand new 2017 pickup, then that is probably not our guy. We’re looking for a contractor who isn’t just interested in making a chunk of profit on a single project, but who will make their living across the high volume of projects we can bring to the table. Finding the right crew is still an ongoing process, but there’s some great candidates in our pipeline.

wholesaling-market-research

Related: How to Survive in All Market Phases (It’s About More Than Just Ensuring Cash Flow)

Dive in.

After finally narrowing it down to one market, we went all-in with learning the neighborhoods. We looked at what areas have the most upside, then started taking action. We’ve got a centralized office, and we are now in the hiring process of bringing on key team members who will add value to the company as we expand. We ended up getting a great real estate agent on board to start making offers on properties. We got some of our offers to stick that were in our targeted neighborhoods, and we are now closing on several deals.  

Summary

If you were wondering, we decided to go into Dayton, Ohio. The market has increasing job growth and unemployment under the national average, and it offers great cash flow on affordable properties and a good local team.

Where will you be investing next? What are steps you take when expanding operations to another market?

Let me know with a comment!