Few questions on my market analysis

[Tyler Bubin]

Hey Everyone,

Newbie here working on getting my first commercial multi-family deal, and I have 2 questions regarding market analysis.

I am in process of determining my shortlist of markets to enter based on the below metrics/indicators as they all seem to be reliably available online:

• % Population Growth
• % Job Growth
• % Income Growth
• % Home Value
• % Decrease in Crime
• % Vacancies
• Also considering, travel time to the location and my general interest in the area.

1) Is there anything else I should consider or omit? My background is in data, therefore, I am at high-risk of analysis-paralysis :)

2) In reading the 2020 NA Multifamily report by Marcus & Millichap, I have found other useful data points such as the number of Completions/Absorptions, Cap Rates, and Sales trends are detailed out for major markets. However, this information is not always available for some of the smaller markets I'd like to consider. So is there any resource out there that covers smaller markets reliably?

Thanks!

[Andrew Schutsky]

A few other factors to consider:

-Construction/absorption ratio for present and future years, indicates demand vs. supply (projected)

-Insurance rates for a given area / proximity to flood zones (this is huge in my markets in FL)

-Job diversity - you typically don't want one, two, or three employers which make up the dominant working force.  A rule of thumb is no industry over 20% of the total working force.  This limits risks if a certain employer were to leave town and take many jobs with them

A great property manager on the team will have you navigate the good and bad areas as well!