How do you assess the "Path of Progress" for a city?

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How do you assess the "Path of Progress" for a city?

Josh Stack
Investor · Cramerton, NC · Member since 2017 · 336 posts · 198 votes

Evening BP!

I hear the 'Path of Progress" discussed on the podcast regularly and often.  It's usually vaguely defined or even just alluded to without much in the way of specifics but I take it to mean the geographical direction of development, gentrification and or social and economic growth of a city.  The theory goes that if you invest ahead of the 'wave' of progress you stand to reap the rewards of appreciation and a rising tide lifting all boats effect.


The question I have is how to do actually assess, systematically what the path of progress of a given area is?  A site search doesn't turn up much except for the helpful blog post linked below.  What if you are searching the nation for investment areas though and have narrowed a short list and need to assess the path of progress remotely?  How could you research the path of progress for Greenville, SC; Syracuse, NY or Tempe, AZ remotely when you can't hang out at the city hall and take the clerks donuts and lattes once a week?

One thing is to be local, it's another to try and ascertain this soft type of market data from afar.  I'd very much like to hear what you may have done in the past and what tips and tricks you have to share?

Thanks,

-Josh.

Post: https://www.biggerpockets.com/blogs/8617/53771-how-to-find-and-profit-from-the-path-of-progress 

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Ben Fraser
Investor · Lansing, MI · Member since 2017 · 22 posts · 21 votes
9y
Hi y'all, Look at the City's Master Plan and Future Zoning Map. Pay particular attention to the City's Capital Improvements Plan, which might be a separate document or might be rolled into either the Comprehensive Plan, the Master Plan, Transportation Plan, or some other planning document. The documents above usually reference 10 year futures and are updated every 3-5 years. Citizen input via community meetings are almost always a part of the process so, if there is any mention of that then try to be there or, failing that, YouTube the meeting (or charrette or design charrette, as they are sometimes called) afterwards. If there aren't any videos being made of that process then try to find news articles or public information about them on the City and/or County's official site. There's also something to be said for simple Google and/or Google Maps searches, such as "newest Dollar General in Greenville, SC" or "best discount used tires in Greenville, SC" because, chances are, the Dollar General corporation (and the like) is not going to put up a new store in what they believe is an up-and-coming area. On the flip side, try to scope out when and where big players are making moves. For instance, in Lansing, MI, the Sparrow Hospital just finished building a multimillion dollar Cancer Center (and, if not a hospital improvement then perhaps a new University building). So, think about similar buildings being planned by major players in the City's and County's stronger economic sectors, and ask yourself "if I'd been aware of it ahead of time, might I have been able to score a few cheap houses or strip malls and been able to flip them to the new, highly-paid employees of the Center or to businesses trying to sell to those consumers?" Finally, ask yourself, "When was the last time I saw an Applebees or a Chiles in a rough part of town and (since you know where I'm going with this example) are any Applebees/Chiles/similar restaurants being built in my focus areas? Good luck and thanks for posting to BP! Ben
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  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    9y

    Gentrification tends to happen in older neighborhoods.  Usually artists, hipsters pave the way.  So look for some of the establishments of the path of progress.  Coffee houses, cool cafes, etc...

    Also gentrification doesn't seem to take a hold in smaller working class cities.  New suburban construction still draws people away from the older core city.  

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  • Josh Stack
    OP
    Investor · Cramerton, NC · Member since 2017 · 336 posts · 198 votes
    9y

    OK, so cool cafes, cool coffee houses.  Brewery dudes also mention coffee houses as initial indicators of a neighborhood being on the rise.


    What else?

    0Reply
  • Ben Fraser
    Investor · Lansing, MI · Member since 2017 · 22 posts · 21 votes
    9y
    Hi y'all, Look at the City's Master Plan and Future Zoning Map. Pay particular attention to the City's Capital Improvements Plan, which might be a separate document or might be rolled into either the Comprehensive Plan, the Master Plan, Transportation Plan, or some other planning document. The documents above usually reference 10 year futures and are updated every 3-5 years. Citizen input via community meetings are almost always a part of the process so, if there is any mention of that then try to be there or, failing that, YouTube the meeting (or charrette or design charrette, as they are sometimes called) afterwards. If there aren't any videos being made of that process then try to find news articles or public information about them on the City and/or County's official site. There's also something to be said for simple Google and/or Google Maps searches, such as "newest Dollar General in Greenville, SC" or "best discount used tires in Greenville, SC" because, chances are, the Dollar General corporation (and the like) is not going to put up a new store in what they believe is an up-and-coming area. On the flip side, try to scope out when and where big players are making moves. For instance, in Lansing, MI, the Sparrow Hospital just finished building a multimillion dollar Cancer Center (and, if not a hospital improvement then perhaps a new University building). So, think about similar buildings being planned by major players in the City's and County's stronger economic sectors, and ask yourself "if I'd been aware of it ahead of time, might I have been able to score a few cheap houses or strip malls and been able to flip them to the new, highly-paid employees of the Center or to businesses trying to sell to those consumers?" Finally, ask yourself, "When was the last time I saw an Applebees or a Chiles in a rough part of town and (since you know where I'm going with this example) are any Applebees/Chiles/similar restaurants being built in my focus areas? Good luck and thanks for posting to BP! Ben
    9Reply
  • Josh Stack
    OP
    Investor · Cramerton, NC · Member since 2017 · 336 posts · 198 votes
    9y
    Originally posted by @Ben Fraser:

    Hi y'all,

    Look at the City's Master Plan and Future Zoning Map. Pay particular attention to the City's Capital Improvements Plan, which might be a separate document or might be rolled into either the Comprehensive Plan, the Master Plan, Transportation Plan, or some other planning document.

    The documents above usually reference 10 year futures and are updated every 3-5 years. Citizen input via community meetings are almost always a part of the process so, if there is any mention of that then try to be there or, failing that, YouTube the meeting (or charrette or design charrette, as they are sometimes called) afterwards. If there aren't any videos being made of that process then try to find news articles or public information about them on the City and/or County's official site.

    There's also something to be said for simple Google and/or Google Maps searches, such as "newest Dollar General in Greenville, SC" or "best discount used tires in Greenville, SC" because, chances are, the Dollar General corporation (and the like) is not going to put up a new store in what they believe is an up-and-coming area.

    On the flip side, try to scope out when and where big players are making moves. For instance, in Lansing, MI, the Sparrow Hospital just finished building a multimillion dollar Cancer Center (and, if not a hospital improvement then perhaps a new University building).

    So, think about similar buildings being planned by major players in the City's and County's stronger economic sectors, and ask yourself "if I'd been aware of it ahead of time, might I have been able to score a few cheap houses or strip malls and been able to flip them to the new, highly-paid employees of the Center or to businesses trying to sell to those consumers?"

    Finally, ask yourself, "When was the last time I saw an Applebees or a Chiles in a rough part of town and (since you know where I'm going with this example) are any Applebees/Chiles/similar restaurants being built in my focus areas?

    Good luck and thanks for posting to BP!

    Ben

    Morning Ben,

    Excellent stuff, thanks very much.  There is a bit of a fine line to walk in an exercise like this though since there is some amount of speculation that will go into it.  I suppose though that if deals are being source based on absolute fundamentals and the consideration is that path of progress appreciation will only be icing on the cake it's not a specifically more risky strategy.

    2Reply
  • Ben Fraser
    Investor · Lansing, MI · Member since 2017 · 22 posts · 21 votes
    9y
    Absolutely Josh! A strategy based on the City or County planning documents has risk because, even though they aren't likely to change them much, their timelines might get pushed depending on their fiscal policy and/or financial ability. Likewise, an Applebees/Chiles-type strategy has risk because they might simply be wrong. Or, they might become wrong if the local economy experiences an internal or external force. Still, as you say, an icing-on-the-cake approach is a good way to look at it. Building on that, a buy-and-flip that changes to a buy-and-hold can work and provide liquidity with proper planning, and vice versa. One last specific thing I want to add to our conversation. I did some digging into Chicago's south side because it's pretty bad there and prices are low. However, there is an argument that things will start to turn around because the Obama Presidential Library is being planned for Jackson Park and all those planning documents and news articles are quite clear on that.
    1Reply
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