All Forum Posts by: Johnny Kang

@Account Closed

You can go to Federal Housing Finance Agency's site and look at their House Price Index Datasets. It has its limitations, in that their Housing Price Index is based on the movement of single-family properties with mortgages purchased by Fannie & Freddie Mac, but it does go back to 1975 (where available), by Zip Codes (scroll down on the above link till you see "Five-Digit ZIP Codes" and download the Excel file. I believe Clayton NY is included in that Excel file.)

Here's an interactive map of the areas covered (not 100% representative of all the zip codes included in their excel file, but provides good visual) and explanation of what is measured by their index. 

The following might be of interest if you're looking for other statistical/chart analysis:

1) Interactive Demographics Map from the Census: Interactive Map (this map is a little finicky, but once you get used to it, you'll get valuable visual info)

2) Federal Reserve Economic Data: FRED (provides charts dating back 10, 20, 30, 40 years so you can see how things have been trending)

@Mike Abramowitz 

Yes, exactly.

@Mary D.

I'll PM you on the ROI (let's just say it was more than enough to cover the $24k) and firelist (I only know how to get this in NYC, but kinda wanna keep this info my little secret. I'm ok letting you know since you're in NH. lol)

@Hugh F. Tang

Hey Hugh my office is in Flushing. Let's connect and see how we can help each other out. I'll PM you. 

@Mary D.

Hope those seminars didn't cost you an arm & a leg. lol. 

That's good you have a family who are contractors & builders. At least you're not having to do this blind. :)

@Mary D.

Well, doesn't sound like you're stuck in analysis paralysis. 10 years, yeah I was looking at something similar in PA to hold (5700 sq ft, 6 unit mixed-use; 4 apts & 2 commercial. this owner also had his commercial spaces vacant for over 10 years!) but we decided against it because all the plumbing & electrical would've needed to be brought up to code; a full gut job which I wasn't willing to do. 

If your current objective is cashflow, and eviction laws are landlord friendly, as long as the all the income minus expenses (including mortgage) results in the return you're looking for, you can reposition the property 1~2 units at a time from the rents, etc. and the increased rents will give you a higher NOI, increasing the value of the property, do cash-out refi and use that money to BRRRR.

When looking out of state, you research areas of interest online, but will eventually have to go there to get a feel for that area. (some people do site un-seen, but I like to at some point, physically go there)

Currently I'm only mailing to properties in NY, since the margins can be fairly large but will have to park our money in PA where I can get a better IRR. So I haven't mailed for properties I want to hold in PA yet; will do that once one of my partners moves out there.

I got my initial list from Listsource (have about 100,000 properties that I haven't even made a dent on it yet), applying the following criteria: 

Last purchase date 1/1/2002 (don't want anything bought during the bubble. these leads will be short sales mostly, which I've done before but don't primarily seek out.)

Equity 70+%

Age of Owners 60+(motivated sellers will be in the older age bracket)

No Corporations/LLCs

Owner Occupied AND Non-Owner Occupied (I've done equal amount of deals in both categories so I don't leave out Owner Occupied)

But don't just stick to Listsource, since a lot of people are doing it. Try to figure out a way to create your own list, by looking at delinquent taxes, landlords who've filed to evict tenants etc. I target properties with specific zoning, fire damaged properties, vacant lots. At the end of the day, you're looking for motivation.  

I do repeat campaigns on a quarterly basis since my list is large, and I prefer not to hound sellers too frequently in too short of a period. 

I used to order my letters from yellow letter . com (not the same as yellow letters . com), but wanted to keep my costs down (they were about $1.30/stamped letter). Probably spent about $24,000 last year on letters so I started doing them on my own. Just found out about Precanceled Stamps which will lower my marketing expenses. Had to go to 6 different post offices before someone knew what I was talking about. Will post about this on a new thread once I've tested it out. 

Hey @Mary D., 

Yes, master plans are good indicators that an area will see sustainable growth, versus an area that just maybe in fact being overbuilt. Glad you found it! 

@Patrick Buttermark brings up a lot of good points that I forgot to mention. I never take an agent's word at face value. Even if they provide me with all the info I'm asking for, I check & verify myself. Their job is to make a commission. Yours is to buy a property that meets your goals, and the two don't necessarily go hand-in-hand. This is why I like looking for deals myself, doing mail campaigns so I can deal directly with the sellers.    

Trulia has a nice crime rate heat map. Type in the property address, click on the listing and scroll down to see the heat map. Following is an example of Manchester, NH 

As far as area class, "A" location is usually where great schools are located, people have white collar professions (doctors, lawyers, business owners). "B" will be a mix of white collar & blue collar. "C" - primarily blue collar. "D" higher percentage of unemployment or under-employment. This is over simplifying it, but you get the gist of it. 

Classification can also be applied to the property itself. "A" property being on the high-end, to "D" being a property you more than likely would never consider living in. Locating a "bad" property in a good neighborhood is better than a "good" property in a bad area. You can always add value to a distressed property, but you will not change the neighborhood by yourself in a few months. 

Here's a link to a blog Brandon Turner wrote last year regarding this topic, with pictures: ABCD.

Question to you; how have you been analyzing properties? Do you use a spreadsheet with all the metrics? 

Hi @Mary D., 

It really depends on what you're looking to get from owning multi's. Some people are ok focusing on cashflow, so for instance, they might buy in areas where 2% rule is more than a possibility and that's their main concern; reason why some focus on buying mobile parks. Others like a little appreciation play, so they might consider buying something that perhaps only meet .08% rule, yet they see much more upside potential in that area and decide to buy there.   

I personally look for areas where it will cashflow somewhat, but there's been an uptrend in job growth, more establishments coming in where people spend their discretionary income, and areas where the township/county/city HAS WRITTEN PLANS of changing a specific area, because cashflow alone diminishes your ability to grow exponentially and scale. If you can find an area where written plans to change the community are available, and you can get in at the cusp of the initial phase of change this will be very advantageous.  

So once you figure out what your personal investment profile is regarding the area class you'd like to buy in (A, B, C, D), then the type of property class (A, B, C, D), you can look at demographics/market info such that it gives meaning to the data you're look at.  

With that said, here are some demographics/market data you can look into:

1) Interactive Demographics Map from the Census: Interactive Map (this map is a little finicky, but once you get used to it, you'll get valuable visual info)

2) Federal Reserve Economic Data: FRED (provides charts dating back 10, 20, 30, 40 years so you can see how things have been trending)

3) Census Quick Facts: QuickFacts (provides charts at the State, County, City level regarding various data) 

4) Bureau of Labor Statistics: Labor Stats

5) Google what businesses are in that area. 

Once you've narrowed down the area you'd like to invest, start analyzing properties, drive around, hang out there, talk to the locals, read local publications to see what's going on, talk to the town's economic & community development people. The more you do it, the easier it becomes and things will start to make sense. Hope this helped. 

@Account Closed

1) Well from my experience in sending out letters, I have yet to speak to someone in a younger age bracket selling their house. All my deals have come from people over 55+ (average age group I'd say was between 60 to 75. Oldest was 91). Since people in this age group did not grow up with all this technology, it's like a foreign language to them. I've had a few that asked me if I can snail mail my offer to them; not even an email. 

As I've mentioned before, you might reach someone in their 50s who are tech savy, so you can include your website, basically giving them a choice to how they want to reach you. But by leaving out your phone # completely, you're now "forcing" every potential seller to comply. Without sellers, you have no inventory so I personally wouldn't do that. It's a seller's market and getting deals is harder now, so you want to make it easy for anyone getting your letters to reach you, whichever way they choose. 

If your main concern is tracking your response rate on the letters, you can still do that since all phones have caller ID; it'll just be a manual process. Lehigh Valley and the surrounding areas are not a big market, so it shouldn't be hard to track your results. 

2) Having a landing page where they can fill out basic info is enough. When you make people go to your site, enter a "code", then fill out property info form, you're creating another step for them. Remember, you have to dummy everything down for people because people want instant gratification. What DraftKings does is different, in that people who go to their website already know who they are and what they're about, so entering a "code," to them subconsciously, is like the customer's 1st step. People who are getting your letters don't know you, so the less steps you have better response rate you'll have. Hope this helped. 

@Account Closed

Direct mail mainly consists of letters and post cards. I don't do post cards because my response rate has never been great, so I just stick to sending out yellow letters with hand-written font. 

Most people who will be motivated to sell are going to be in the 55+ age group. They like being able to pick up the phone and call, so you want to have your phone #. Some 55+ are computer savy, so if you want to include your website, you can include that along with your phone #. But if you go that route, and you want to incorporate online marketing later on as well, you'll want to have a separate website for strictly the online marketing stuff you're doing so you can track how each marketing campaigns are doing (Yellow letters with phone # and web site VS. Website Alone).