How did you get to know your market?

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How did you get to know your market?

Gabriel Lamb
Avondale, AZ · Member since 2018 · 31 posts · 10 votes
Hello BP family! I am looking for advice on how you got to know the ins and outs of the market you invest in. I live in Avondale, AZ and am interested in studying markets like Avondale or Goodyear (a 15 min drive away from the growing areas surrounding our Cardinals stadium). I could even make a 45 min drive to Scottsdale or Mesa (more popular markets to invest in it seems). I am born and raised in AZ, so I know the bars, restaurants, and things to do in these areas. I feel i not really know the economics I would say. Like rents, job growth, population growth. Any help is appreciated. Thank you!
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Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
8y

@Gabriel Lamb

This had better not be casting pearls before swine, Gabriel. I hope you're paying attention.

The first thing I looked for was an area that was sufficiently complicated to make it worth my while. And it took some time. Others from this area will confirm, Pittsburgh is full of working-class neighborhoods that change radically on a street-by-street basis. The area that I picked to invest in is one of the most extreme cases of this. This is where a local investor can find deals that out-of-area people can't. I was also looking for pocket neighborhoods where, for various reasons, D-areas became C-areas, because once again, this is where the local handyman investor should be to maximize his advantages.

1. Pick a mature urban or near-city suburban area that is complicated, where neighborhoods vary significantly street-by-street.


2. Look for borderlines, where the ghetto morphs into a comparatively nice street of houses, and figure out what anchors that area. It may be a hospital nearby. It may be a police station or school that keeps people in place. Sometimes, it's a church whose members refused to leave while the area deteriorated around them. It may just be simple lines on a district map -- this is where one school's influx area ends and another begins.


3. Go over the same areas again and again, at different times of the day. Remember, you're walking through C/D areas doing this -- it can get weird when you turn down the wrong street in the middle of the night.


4. Look for your target style of house and make note of the addresses. I've talked about this before on BP, but as a handyman investor looking for places I can maintain largely alone, I'm always on the lookout for brick-veneer post-WWII-built 2-bedroom/1bath SFR, side-by-side duplexes, or row houses with simple, low, easily-maintainable roofs. That's where I can maximize my advantages.

And there it is, a basic blueprint to the bucks for the broke investor looking for a low-cost way into the game, and you didn't even have to buy me a gyro, let alone a McRib. Good luck, Gabriel!

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  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Will Gaston that's a great tip Will! I know your time is valuable. If you domt mind me asking, what factors allowed you to pick the zip codes you did? Is one or two zip codes too small if my goal is to invest in small multifamily?
    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    8y

    I always suggest to people to set up MLS / Redfin alerts on all the properties in their area and commit 20-30 minutes a day to going through them. Pay attention to rents, condition, price, what sells fast, what sits, what price drops, ect.

    You won't notice it at first but after awhile you will internalize the data.  Stuff will come up and immediately you will think it is a good deal, overpriced, ect

    Podcast Guest on Show #132
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    2Reply
  • Will GastonPro Member
    Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
    8y

    @Gabriel Lamb I probably fell into that because the students in my market mostly only rent in two zip codes. In other words, I was forced to pick just two. But it's help my investing and net worth tremendously.

    I don't think for your situation one or two zip codes is too small if you're willing to look at it long term. If you can be "the guy" who knows everything about and does all of his business in one area it's pretty hard not to be successful. Just my experience anyway.

    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Will Gaston I agree with those points. I love to go full force into one or two things in order to be great at it. Thank you!
    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Brie Schmidt thank you Brie! That was great insight. I appreciate it
    0Reply
  • Devin Otway
    Oakland, CA · Member since 2018 · 25 posts · 7 votes
    8y

    @Joe Villeneuve
    Love the idea, was thinking of doing something similar as a fun pet project. What data source are you using for determining rental comps?

    1Reply
  • Delshon C.
    New York, NY · Member since 2018 · 15 posts · 23 votes
    8y
    @Gabriel Lamb I do out of town investing here’s what I do 1. Google search the city , populatIon, employers affordable housIng projects 2. Use yelp to evaluate the number of trendy eateries 3. Talk to locals at BP meet ups 4. Consult property managers
    1Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    8y
    Originally posted by @Devin Otway:

    @Joe Villeneuve
    Love the idea, was thinking of doing something similar as a fun pet project. What data source are you using for determining rental comps?

    Zillow, MLS, etc...

    1Reply
  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    8y

    @Gabriel Lamb,

    My biggest suggestion would be to go to every Open House you can in the target area. Then keep an eye on the properties to see if they move to Pending or sit on the market for months. This will give you a good idea of what you can get for your money. Once you know what 150K will buy and 180K and 250K and 320K etc will buy, then you can work backwards when you see something that needs work. Begin figuring out what a kitchen is costing per Linear foot, flooring is costing per sq foot (installed) and make sheets.

    Hope it helps and good luck!

    1Reply
  • Jose Trevino
    Member since 2018 · 7 posts · 1 vote
    8y
    @Dustin P.
    0Reply
  • Ryan McCue
    Rental Property Investor · Columbia, SC · Member since 2018 · 19 posts · 12 votes
    8y

    @Gabriel Lamb,

    Depending on your municipality you may be able to search property sales on your county websites.  Being able to see the hold times and sales prices should pose useful. Many counties in my area also have this information available on their GIS platforms.  

    https://maps.mcassessor.maricopa.gov/

    0Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    8y
    @Gabriel Lamb pick some zip codes you like then visit houses which seem like a good deal. After a couple of months you will know what a good deal looks like
    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Steve B. Thank you steve!
    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Ryan McCue great tip. I did not think of that
    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Mike Cumbie Thank you! I definitely plan to start looking at what sells and what sits.
    0Reply
  • Alfonso Maynard
    Rental Property Investor · Chicago, IL · Member since 2018 · 1 post · 0 votes
    8y
    @Gabriel Lamb good question
    0Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Delshon Chestnut I actually love this strategy. I was reading similar tips in a book currently. Thanks delshon!
    0Reply
  • Devin Otway
    Oakland, CA · Member since 2018 · 25 posts · 7 votes
    8y

    Hi @Delshon C.,

    Thanks for sharing your advice. Do you have any suggestions for how to find / reach out to property managers in an out of area situation & are they typically the property managers that are part of your 'team'? If they are not part of your team how do you reach out to them in a way where they would be receptive to helping answer some of your questions about the area?

    0Reply
  • Jameson Sullivan
    Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
    8y

    I work in commercial RE and there's nothing better than just driving markets, noting trends, quality and type of Tenant and just continued efforts at that will give you a great understanding of the market as a whole, residential or commercial. One thing that I haven't done yet but I think will be beneficial for me is hopping in a plane for a few hours and flying a predetermined path noting new growth, infrastructure construction etc. This obviously gives a better macro understanding but from there you can lock in further markets that you want to drive.

    Good luck.

    0Reply
  • Delshon C.
    New York, NY · Member since 2018 · 15 posts · 23 votes
    8y
    @Devin Otway speak to a handful of Realestate agents and ask them for PM referrals. I call up the PMs and have a conversation with them which is an interview. I tell them when I plan to be in town if they are willing to walk properties with me and could provide rent quotes on houses I’m looking at. The PM that adds the most value durning my search becomes apart of my team. Most PMs are open to having a phone call and providing a potential client with advice. If they aren’t willing to don’t do business with them.
    2Reply
  • JACOB TURNER
    McKinney, TX · Member since 2018 · 13 posts · 3 votes
    8y
    @Gabriel Lamb Lol!!!! Sounds like me! 😅
    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    8y

    Suggest you spend some time looking at sites like Zillow, Redfin go to open house see inside and asking price. 

    It took about 12 years to know most streets in a 150 sq mile. Took jobs like photographers, home inspectors, appraisers to get see inside. Now it is pricing change which is a constant learning exercise. I also asking home viewer where they work and what they do in Silicon Valley. Each person will tell me about layoffs or new campus to be built. 


    1Reply
  • Account Closed
    Specialist · Dallas, TX · Member since 2017 · 368 posts · 102 votes
    8y
    @Gabriel Lamb I will spend a week in a market and talk to the locals. Understand what they need and how I can supply those needs.
    0Reply
  • Lateeka A.
    Rental Property Investor · National · Member since 2018 · 66 posts · 11 votes
    8y
    @Gabriel Lamb I check websites like citydata.com or USA.com to pull data to analyze areas I am interested in investing in. Hope this helps
    1Reply
  • Gabriel Lamb
    OP
    Avondale, AZ · Member since 2018 · 31 posts · 10 votes
    8y
    @Lateeka Mosley thank you! That does help. I did not know about these websites.
    0Reply
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