What is your magic number ?

11 Replies

Hi All,

My name is Benny and I start browsing my way through the real estate investment world.

After reading a few books and learning a few courses, I wanted to approach to the power of the web.

My question is: What is the preferred market size to focus on when exploring investment opportunities.  Obviously State or even county are too big. On the other hand small towns (40K-50K) might not present big pool of possible transactions (buy and sell).

So what is your magic number ?

Thanks,

Benny

My Magic number is 47...my lucky number is 3.

In REI? There is no Magic Number. Everything you said wouldn't work in your post, does...but not everywhere. The Magic Numbers have $$$$ in front of them. Not population, Not Area Code, Not Zip Code, Not area size, Not...a lot of things using numbers, other than those with $$$$ in front of them.

There are people making money in bad areas, great areas, low-cost areas, high cost areas, etc etc etc

The constant is most people specialize in one area.

You can talk to people here who have 50 units in a D (drugs, crime) area, and love it and make great money doing it. Me personally, I wouldn’t touch those with a 2-mile pole.

Do your reading and research and find an area, class, and investment type that works with your interests, capabilities, and plans. Maybe buying and renting ice cream shops in rural North Dakota is your thing. Make it work! :)

Population size is only one thing to consider. I think there are a lot more important factors to consider first. Future population projections I believe are more important than a cities current size. That being said I’m comfortable with a Metro area of around 1 million. That’s enough to make a diverse economy with multiple industries, and have multiple options as far as building my team. But it’s not like if a city was less than 1 million I wouldn’t consider it. That’s just a number that makes me feel safer.

@Benny Gelbendorf there is no preferred market size for investing. Where to invest is personal to each investor. I, personally, prefer larger, more densely populated areas, because that is where the most stability is. No employment monopolies and a lot of prospective buyers and renters. It's also where I live and know, so if I was from a small town in Tennessee, I might be more comfortable knowing the market there and my preferred market may be more rural. It's about what you know and are comfortable forecasting about the future of the area.

@Benny Gelbendorf ,

With real estate investing, and each house I buy... I remember one thing:   I only need 1  person/family!    I invest in an city of like 30K people, but the neighboring city 30 mins away  is 500K people... remember-- you only need 1!  I don't think there's a magic number, I think it's looking at your cards, and playing the best hand you can!

Originally posted by @Benny Gelbendorf :

   What is the preferred market size to focus on when exploring investment opportunities.  Obviously State or even county are too big. On the other hand small towns (40K-50K) might not present big pool of possible transactions (buy and sell).

I invest only in my local small town, where I own 12 SFR free and clear. And in my area, 40-50k population qualifies as a "large town". For a "small town" you need to be under 5k. (Mine is 2200.)

Originally posted by @Benny Gelbendorf :

Hi Joe,

From your words I understand that you swipe the country east to west finding a deal ? And on each deal you investigate on both Macro and Micro levels ???

 No.  You have it backwards.

First, I establish the criteria I need in a property ($$$ wise)

Next, I research the Markets to find the Micro-Markets where this "criteria" can be found in quantity

Then, I wait for the properties with my "criteria" in the those Micros to pop up...and then make offers.

If I work from the Micro-Market out, I'm not searching for my next deal...it finds me.