Choosing investing location

8 Replies

Hello everyone! Need so help/advice. When   choosing where to invest, I’ve read and listened that things to consider are population growth, job growth, etc are important. What do you guys look for when deciding to invest and where do you obtain this information? Thank you!

@Jose Valdez Not an easy question to answer actually... are you comfortable investing out of state, or do you prefer something you can drive to and see at any time (local to you)? Will you self manage or use a PM? Are you interested in SFR or multi, househacking, STR, buy and hold, wholesale, flipping, etc...? Will you need a partner, or do you have a downpayment, reserves, money to flip? You may already know exactly what you are planning on doing - if so great! If not, I would narrow down what you are wanting to do first. Best of luck and keep us updated!

@Lara White hello and thank you for the input! I live in Los Angeles, CA and looking just outside of the main city to find properties that  are a little more affordable. I currently do not own investment properties but would not be opposed to investing out of state. I’m trying to learn at the best way to analyze a market and where to obtain that information. I’m looking for a small multifamily, triplex or fourplex preferably, and I’d like to go in the first deal without a partner and hold on to this property. I wouldn’t be opposed to self managing if it’s 1-2 hours from my home but anything farther than that I think a PM would be the best. Thank you! 

@Jose Valdez this may sound broad, but study every factor/variable that may have an effect on your investment strategy and specific target market. I find it extremely important to know and track your numbers on a consistent basis. Learn housing metrics such as, average SFH sales price, average vacany rate, lease comparables for different properties/subdivisions. Study potential economic trends like, new job growth, relocation of companies, overall increase/decrease in employment. Look into local governmental policies, for instance, laws that may regulate/cap rent, property tax increases, different zoning laws that may hurt or help your strategy in the long run. All of this info can be sourced from online platforms and articles, real estate investment meet-ups, and general networking with folks in the industry.

Maybe studying all of this is unnecessary, but at the end of the day, the more you can perceive change in the RE space, the better you can adjust your strategy and criteria to profit in the market. 

Lastly, whatever market you decide to pursue, you need to stick to it. It sounds counterintuitive, but if you spread your net and search criteria into multiple markets, I promise as a newer investor you'll be stuck in the analysis paralysis phase. Hope this helps.

I just started a separate thread on this subject. Do you start with Redfin, Any favorite places to source demographics like jobs and job growth? Are there any platforms that systematize this search, ie MashInvestor? I feel like I go down a rabbit hole every time I log on. I’d love a system! Vet the market, then the properties. I would agree that general networking and education help lead you to a market,  but it gets overwhelming in where you turn to collect data from there. 

Anyone using a spreadsheet? I’m a pilot and I like checklists, systems and routines to automate my processes. Thank you!!

A lot of great advice here. As for a market target list, start with a list of 5-7 and narrow it down from there. There is a lot of good information on the website, population growth, supply & demand (median rents & vacancy rates) and much more. RCLCO is another resource that provides a ton of great information for RE investors. I would also build relationships with local brokers....they are a wealth of knowledge. Best of luck! 

@Jose Valdez I agree with @Danielle Jackson . Start with 5-7 target markets, and narrow it from there; find some local agents/brokers to start a conversation with. If it's someone local, take them to coffee if they have time/availability.  If they aren't local, maybe they could meet via Zoom with you.  @Valerie K. I bet someone on here does! I have them for my agent business, but not from an investor point of view.  That would be extremely helpful. If you find one, will you share it with me?