All Forum Posts by: Art Perkitny

Hey @Account Closed  

https://www.dropbox.com/s/vtjem3l039cm0iw/Phoenix_...

As you can see, the east side of Greyhawk now shows fewer 2-4 unit structures, however the western side still has a high number. 

The best way I can explain this is because of the fact that alot of those units are rented as apartments. Thus, when someone at any of those address gets the annual census, they respond as renter and the resulting data points get tabulated as such. 

Unfortunately there doesn't seem to be a way to filter for rented condos as far as census data is concerned.

@Bryan Schiessl I think I may be able to help here. 

The following is a map that shows the concentrations of 2-4 unit multifamily buildings in various areas within the Phoenix market. The data comes from the most recent American Community Survey. There are an estimated 57,983 2-4 unit structure in the Phoenix Area. 

link to high res: https://www.dropbox.com/s/vtjem3l039cm0iw/Phoenix_...

As @Pamela Sandberg stated, these kinds of properties typically are situated in riskier areas and the data backs that claim up. 

This chart shows the average percentage of structures that are 2-4 unit buildings, tabulated by the areas risk score (A to F)

The correlation is strong for sure. That being said, there are areas with 2-4 unit buildings that are C or higher grade. 

The last map show the risk score for the Phoenix market, which if you don't know what that means, you should read this:

https://www.biggerpockets.com/blog/2015/12/09/class-a-b-c-d-real-estate/

Hope this helps! 

@David Olson, love the analysis you have put together here!

I may be biased here since I can spend days looking at various statistics and playing with the numbers, but I believe that you can (almost) never over analyze anything. 

While analysis paralysis is defiantly a concern, looking at data and drawing conclusions while also actively looking for properties/markets to invest in is smart. After all, it's your hard earned money that you're investing, thus you should do what you need to feel confident in the investment you are allocating into. 

As for why people choose to invest in places like Pittsburgh, Cleveland, Detroit, Cincinnati, St. Louis. It's because these places offer the best ROI, rent to price, cap rate (essentially high yields) . They exhibit these yields because the underlying fundamentals, such as pop/job growth, are not favorable, as you have pointed out in your research. The high yield reflects that underlying risk. 

The following is a density plot of high rent to price markets in the country. The greener areas mean that the area has more cities that produce average rent to price ratios that are in the top half of cities for that metric. 

That's not to say that you cannot find high yield properties in cities that have low average yields. It will just be more difficult and these properties will be in the riskier areas of town and fewer in numbers. The opposite is also true of the high yield markets. Certain sub-markets will be deemed less risky and thus a higher price will reflect the perceived lower risk.  

All this means is that once you do select a market to focus on, it's important to dig into the sub-markets that make up the macro market. 

I also like what @Account Closed is suggesting with looking at secondary/tertiary markets. Since you are open to looking anywhere in the country, these places do offer higher returns and come with less competition. 

I will leave you with this map and list of possible cities to look into. The analysis is similar to yours. I have filtered the possibilities down to the top half of cities for rent to price ratio. I also limited the search to cities with populations over 25k. 

The bubbles on the map correspond to the population size and the color to the rent to price ratios. 

Link to high res version: 

https://www.dropbox.com/s/qtcnzlnq5rbl113/US_CF_Ma...

link to google sheet with raw data: 

https://docs.google.com/spreadsheets/d/18qZO-d5pfx...

@Paul Vonasek these maps may help with familiarizing yourself with the Chicago sub-markets. 

The first one is north Chicago and second south Chicago. Each location is colored and corresponds to an area classification of A thru F. The lower rank the area, the higher the risks will be.   

The property for 50k you mentioned sounds like it is likely in D/F location as @Jeff Burdick stated. I would check with the map I have provided and probably avoid D/F areas if this is your first investment. 

As for neighborhood recommendations, I actually lived in Bridgeport for a year. It's mostly a C grade location which should provide you with a good balance of risk and reward. May be worth checking out. 

Hey @Guy Azta, as most everyone has already stated, rents in Cincinnati are going up. 

I thought I would add to the discussion by referencing some data and looking at the various sub-markets within Cincinnati. 

Over the past 4 year, rents have increase on average 8.7%. However this growth has not been distributed equally among the entire city. 

The following first chart shows the trend in median rent as reported by the census bureau for the whole of Cincinnati. 

The second demonstrates how rents have increased more in some areas and less in others. The greener the color the higher the rent increase. Most areas saw modest rent increases and a few even experienced a decline. 

Link to high res version: 

https://www.dropbox.com/s/x3bozx4ezlgig1a/Cincinna...

Lastly, the third graph shows the distribution of rent increase percentages as a histogram. Notice most areas cluster in the center a bit above zero. A few outliers can also be seem in the far right side of the chart. 

@Tanya Andrade the map should be in my post above, can you not see it? 

Here is a link to it nonetheless: https://www.dropbox.com/s/xkwhb9hh43rg5ca/Providen...

Hope it helps you!

@Michael Magnell, the data suggest that this area may be worth investigating further. 

Looking at the location grades for Northeast KC it seems that there is an "island of opportunity" in the northern part near the elementary school, north of Saint John ave and south of Gladstone Blvd. 

The area has improved and coupled with the new O-Zone classification it may drive this progress further.  

Here is a location grade map for the area in 2013 (top) vs 2018 (bottom)

Hey @Sevy Bialke great use and analysis using zillow's data! I have played around with their data-sets a few times as well. 

To add to the research you have already done, I thought I would provide you with a map showing the rent to price ratios for the twin city area. This data comes from the American Community Survey and is tabulated at the block group level, which is more granular than zillows neighborhood aggregate. The darker the color the higher the ratio is. 

My cautionary advice would be to not solely make a buying decision on the rent to price however. The reason being is that the areas that have high ratios will also carry the most risk on average. The 2nd map shows the location grades or risk score (A through F) of each area shown in the first map. There is a strong correlation between the high ratio locations and low scores. 

Hey @Mathew Allen as others have stated, the west/south sides are going to be less expensive and will produce higher yields, albeit with more risk. There are opportunities to rent to college students if you buy near the universities, however this will come with it's own pros and cons. Here is a map that should help you familiarize yourself with the city. The colors correspond with each locations grade or relative risk. Nonetheless, Providence has a good mix of high, mid and low risk areas, so you should be able to find something that fits your investment goals and return criteria. 

Hey @Bobbie Dancy

Congrats on the 10k and glad you're interested in investing in my home town!

My suggestion for you is to try and save a little bit more. The reason is 10k won't be enough to by into an area that isn't F/D grade in today's market. 

If you don't know what I mean by grade, read this: 

https://www.biggerpockets.com/blog/2015/12/09/class-a-b-c-d-real-estate/

Since you are novice, I would suggest finding a small multi in a C/B area and getting you feet wet there. 

Also I wouldn't base my investment choice solely on the 2% rule. On average, properties in Cleveland will do 1%, and the places that do produce 2% rents will be F areas, which I do not recommend a new investor try as their first purchase. 

Here are a few graphics that should help you start your search while you save a bit more for a down payment. 

The first map shows the grades of sub-markets in the Cleveland area. The next one shows the rent to price ratios (2% rule) for each area. The darker the color, the higher the yield.