Finding a market

7 Replies

So I’m having trouble finding my first property and I don’t know where to start.

I have 100% funding so money is not the issue but idk which city/state to attack first. I live in Southern California but the area I live is extremely high costs houses.

Any tips/tricks that you guys use to find a market, see if it’s any good, or any numbers you run to make sure it works?

Anything will help thx you so much!!!!

many people have this problem, it's called choice overload (or overchoice) and it can be quite annoying.

you have capital, and the internet allows you to choose any market. The fact is that MOST markets work for some type of investing, so you don't have a problem with picking the best market, since there is no best market. Pick a market that is close enough and then commit. When scrolling through deals from a random city on the MLS none are going to look appealing and since you're not comitted to that city it's too easy to move on.

Sort of like tinder, you're just scrolling through people till you find one you kinda like, but as soon as it pisses you off you bail on it. 

The value is in the nuance, it's never on the surface. So it won't be until after you choose a market and find vendors, wholesalers, great realtors, and get some traction that you'll find  the really great deals. 

First, narrow your criteria. are you looking to buy and hold or flip? Do you want cash flow or appreciation? What's your price point? What class of assets do you want to purchase? 

The tighter you know your criteria the easier it is to find a market that fits. 

Once you find something pretty close, you need to commit hard and take a lot of time to build a network in that area 

Originally posted by @Alexander Felice :

many people have this problem, it's called choice overload (or overchoice) and it can be quite annoying.

Thanks for putting a name to it, it is quite frustrating and is something I'm currently struggling with as well. I appreciate your advice! 

One problem I come across is narrowing it down to a market that makes sense, then hearing from agents or other sources that it's flooded with investors and competition is high. Being new without the power of reputation and connection, it becomes intimidating and makes me feel like I need to narrow down a different market all over again. Any idea how to overcome that? Is it worth it to still continue in the market as long as it makes sense, and just take my chances? Or find a market with (if even possible) *less* competition?

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Originally posted by @Taylor Lorei :
Originally posted by @Alexander Felice:

many people have this problem, it's called choice overload (or overchoice) and it can be quite annoying.

Thanks for putting a name to it, it is quite frustrating and is something I'm currently struggling with as well. I appreciate your advice! 

One problem I come across is narrowing it down to a market that makes sense, then hearing from agents or other sources that it's flooded with investors and competition is high. Being new without the power of reputation and connection, it becomes intimidating and makes me feel like I need to narrow down a different market all over again. Any idea how to overcome that? Is it worth it to still continue in the market as long as it makes sense, and just take my chances? Or find a market with (if even possible) *less* competition?

if you want to invest in real estate, you must be prepared to deal with increasing competition, decreasing margins, deals are much harder to find, and the water is very muddy with new investors. There is no market that is exempt from this, and think about it, any market that people aren't competing in right now is one that might not be worth tackling. 

all that said, everyone can find a deal if they apply pressure to their strategy. Network every day hardcore and be consistent about shoving your face into the social groups that contain people who are doing what you want to do. If you expect people to send you great deals then people need to take you seriously, for that to happen people need to see you trying every day for an extended period of time. 

as for narrowing the market. As I said above, find a place that lends itself to your chosen strategy then stick with it. What most people do is choose a market, then try and stuff their chosen strategy into it. That's called bed of Procrustes, and it is a recipe for failure. If you want cash flow and you're willing to sacrifice appreciation, secondary markets across the Midwest are for you. If you want to flip, markets on the rise are where you want to go, and if you want appreciation you can buy in almost any growing first tier city and sit on it. 

Decide on the strategy and finding the market becomes much easier, once you find a market stop bouncing around just because it's hard, it's always going to be hard. If you can only be a successful investor when it's easy then your whole career is going to be hard. So, commit! 

;) 

@Michael Caro there are deals in every market.

The best market is the one you know the best. Regardless of strategy you need to know your market intimately. How many houses are for sale and how long have they been on the market, how many are under contract and how long have they been on the market, how many have sold in the past 30-60-90-180 days and how long were they on the market and what did they sell for list price vs ask price. This will tell you where the demand is and the sweet spot.

Once you have the market stats down you need to make a lot of offers. In this environment it takes a lot of leads and a lot of offers to get a deal. This is true across most all asset types and classes.

Best way to get deals is network with wholesalers, agents (yes you can get deals from MLS) FSBO, foreclosure sites and auctions, craigslist (yes every once in a while) and market consistently.

More importantly you need to follow up on all leads 3, 6, 9, 12 months and beyond.

Answer the phone when it rings. Speed to lead is king right now.

For MLS look for vacant homes that have been on the market well past average DOM and that have had price reductions then make an offer that works for you regardless of asking price. You need to make a lot of offers but you will get some deals this way.

Consistent action, speed to lead, follow up and follow through.