Investing in a Market in the Hyper-Supply Market Cycle

[Cole Baker]

I am beginning my MF journey, I am currently analyzing markets to determine which one to jump into. 

One question that came to mind, is there a strategy or a reason to invest in a market that is currently in the hyper-supply phase? Or would you all recommend staying away from markets that are in hyper-supply?

[Anderson Bigate Nogueira]

Hi @Cole Baker, technically the market price for rent is determine by the old supply x demand, so I would seek markets with unbalanced supply, but also consider other criteria, like population and job growth, especially as we dive into a recession, you want to be in markets with large pool of jobs to mitigate evictions, how diverse are the economic drivers and industry, etc. I invest in large multifamily apartments (>100 units) and my buying criteria includes the sunbelt states lick Arizona, Texas, Florida, parts of Tennessee, etc., and I like Texas a lot because the job market in the state (largest migration inbound of businesses during COVID period). do your research seeking different sources and perspectives. For example, I like this chart below that correlates population growth X rent growth. I hope that helps,