Emerging Markets: How to find them. A book that "helps".

14 Replies

I am looking to invest up to $200K cash in apartment buildings anywhere in the US.  I am struggling to down select markets to build relationships in so I can get deal flow.

In 2008 David Lindahl published "Emerging Real Estate Markets" and in that book he says "one of the best places to find forecasted job growth is from the US Census.  Go online to the Bureau of Labor Statistics, and search for forecasted job growth".   I did this and could not find any forecast data by location as David suggests.  I contacted the US Census and they told me they do not have this data.  Does anyone know why David would have said this works when it clearly does not?  I find it hard to believe that the data was offered in 2008 and is not provided now.  

The US Census was kind enough to point me to State population growth projections here:  https://www.census.gov/programs-surveys/popproj/gu...  I am interested in Ohio so if I select that link I find projections by county.  I was hoping for something by city but this data is not bad I guess.  I am interested in Cincinnati and this data suggests a slight population decline in Hamilton county between now and 2020 where Cincinnati is located.  

If anyone has any recommendations on how to find good data to support which markets I should buy apartment buildings in I am all ears.  Is there anyone in industry conducts analysis and creates reports?  I would be willing to pay if they are good.   

Thanks,  Gabe

I was also going to suggest that book though I have yet to read it. He references it in his ABC's of Real Estate book. David Greene just released Long Distance REI and will be hosting a webinar on Friday.

He specifically stated somewhere that identifying and scrutinizing emerging markets is something he feels good teaching others about so I look forward to seeing what he has to say. 

In a similar boat as you and I'm ready to pull the trigger in 2018. 

Good luck.

Have you tried services like Costar or Alndata? These are paid services but they provide a lot of information on specific markets. 

I Googled Job Growth in Ohio Counties and a number of links came up. Your answer is probably there somewhere. Good luck.

@Gabriel Miller I just finished 'Emerging Markets' and was very disappointed. I read his other book Multi-family millions a few years ago and really liked it. Like you I was a bit unclear how to actually find an 'emerging market' after reading it. It seemed like he sort of lucked into his first find in Massachusetts by buying in a terrible area and then lucking out because they got a mayor that was good at turn-arounds and also it probably didn't hurt that it was proximate to Boston.

I think his advice about looking at BLS and census data is pretty good. Also look at city-data.com. They do a pretty good job of aggregating a lot of data sources.

But I don't think any of them forecast the data and if they did you shouldn't trust it anyway because they are not Psychics.

As mentioned earlier, if you are serious you can pay up for services such as Costar that will give you the best data available. 

But one thing I would suggest is to talk to and get on the mailing lists of all the biggest brokers like Marcus Millichap and CBRE. They have tons of great research.

Also, try to narrow your search to a few areas and then go very deep with talking to people in those areas.

For instance, the southeast, texas and west generally have great population and job growth. So you can narrow to one of those areas. Or if you are looking for lower prices maybe look into the midwest or the oil shale areas.

Once you pick an area start to drill-down further by talking to realtors and chambers of commerce in cities in that area. 

Being outside Atlanta, I like the Southeast because I know we have good job and population growth here. But when I started drilling deeper I found plenty of areas to look at.

South Carolina, for the most part is very sleepy. But look at Greenville. They have a great thing going with their automotive manufacturing industry.

Take a look at Marcus and Millichap, CBRE, Colliers, etc. City data is good, City of Cincinnati and Hamilton County web sites are harder to navigate, but have good info. Also, talk with a few Commercial Brokers and they can give you a Costar report. 

@Todd Dexheimer, Thanks!  I probably should have mentioned in my originally post that I was inspired to read Emerging Real Estate Markets because you mentioned it in your podcast.  When we spoke on the phone you mentioned Costar and I did reach out to an agent and and get one for Cincinnati.  I agree that it is an impressive report.  Do any of the sources you mentioned above provide a report that compares markets across the US?  Or are they all local reports and it is up to me to do the comparative detective work?  Thanks!

@Gabriel Miller , I think you will have to research each market. There is research that compares markets, but it is usually looking at the trendy markets and is usually backward looking on only a few points. 

Try neighborhood scout, Marcus and millicap under research, IRR Viewpoint report, and city data (you can zoom in to very specific locations). I also talk to brokers and locals through BP for an insiders view.

Cincy has population shifts (primarily to east side right now). My manager loves Covington right now but the decline does give me pause.

@Gabriel Miller

Hi Gabriel

I have used a company called REIS to access market data. They are more affordable than Costar and you can access individual markets.

I would simply google either emerging markets or job growth, and see what cities pop up.  Then begin to narrow there and select the cities you want the data.

It's no secret that emerging markets are going to be located in the Southeast and the Mid west. My partner likes to say we invest in the SEC (South Eastern Conference).

I know that many of our members are looking at Columbus due to the govt jobs and university. It may have already emerged.  I think Cincinnati is more of a linear market, good for cash flow

Gino

Originally posted by @Gabriel Miller :

I am looking to invest up to $200K cash in apartment buildings anywhere in the US.  I am struggling to down select markets to build relationships in so I can get deal flow.

In 2008 David Lindahl published "Emerging Real Estate Markets" and in that book he says "one of the best places to find forecasted job growth is from the US Census.  Go online to the Bureau of Labor Statistics, and search for forecasted job growth".   I did this and could not find any forecast data by location as David suggests.  I contacted the US Census and they told me they do not have this data.  Does anyone know why David would have said this works when it clearly does not?  I find it hard to believe that the data was offered in 2008 and is not provided now.  

The US Census was kind enough to point me to State population growth projections here:  https://www.census.gov/programs-surveys/popproj/gu...  I am interested in Ohio so if I select that link I find projections by county.  I was hoping for something by city but this data is not bad I guess.  I am interested in Cincinnati and this data suggests a slight population decline in Hamilton county between now and 2020 where Cincinnati is located.  

If anyone has any recommendations on how to find good data to support which markets I should buy apartment buildings in I am all ears.  Is there anyone in industry conducts analysis and creates reports?  I would be willing to pay if they are good.   

Thanks,  Gabe

Hi Gabe, Columbus, Ohio has the most population growth of any city in Ohio by far.  Most other cities in Ohio have populations that are declining as you mentioned.  As I have said in these forums before, as a state capitol, with OSU and big businesses coming to Columbus, there isn't another city in Ohio that is a better place to invest.  

@Gabriel Miller check out the Texas A&M real estate center (https://www.recenter.tamu.edu). Look under data and you can see the population trend for any county or city in the country.  They obviously focus on the Texas markets but have lots of info on other areas of the country if you dig in.  I recently wrote a book (Done! The professionals guide to double digit returns, multi-generational wealth, and a worry free retirement) which just went on Amazon 6 weeks ago that has a fair portion dedicated to choosing an area to invest in MF. Colleague request me and I will send you a complimentary digital copy of the book.  

Originally posted by @Robert Ellis :

Hi Gabe, Columbus, Ohio has the most population growth of any city in Ohio by far.  Most other cities in Ohio have populations that are declining as you mentioned.  As I have said in these forums before, as a state capitol, with OSU and big businesses coming to Columbus, there isn't another city in Ohio that is a better place to invest.  

Robert, the thing I have heard from talking to a lot of brokers here is that while Columbus may have a slightly higher growth rate than Cincy, Columbus has also overbuilt a bit this cycle which puts pressure on rents. There is still significant demand in the Cincy area because their build up has been a bit slower so they have not reached the saturation point that we are starting to see in places like Columbus and Indy

@Melissa Nevich :  Thanks!  Where did you see data showing the population shift in Cincy from east side to right side?
Originally posted by @John Lenhart :
Originally posted by @Robert Ellis:

Hi Gabe, Columbus, Ohio has the most population growth of any city in Ohio by far.  Most other cities in Ohio have populations that are declining as you mentioned.  As I have said in these forums before, as a state capitol, with OSU and big businesses coming to Columbus, there isn't another city in Ohio that is a better place to invest.  

Robert, the thing I have heard from talking to a lot of brokers here is that while Columbus may have a slightly higher growth rate than Cincy, Columbus has also overbuilt a bit this cycle which puts pressure on rents. There is still significant demand in the Cincy area because their build up has been a bit slower so they have not reached the saturation point that we are starting to see in places like Columbus and Indy

 John, the population growth is much stronger in Columbus than Cincinnati.  Besides the population, Columbus has OSU graduating 6000+ students a year, we just received a huge grant to be one of the first "smart cities" in the country, areas around downtown like Old Town East and Merion Village just to name a few have made huge advances in revitalization just in the past 2 years.  There is a steady influx of new businesses including tech companies like Facebook and Amazon into Columbus and as the state capitol, there is always a solid government workforce that is looking for housing.  Cincinnati just doesn't have these "stabilizers" like Columbus.  

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