How to find the right market?

[Paul Wolfson]

Hello All,

I'm looking to invest out of state as I live in a very expensive market.

I've identified my goals and identified several markets on WalletHub Fastest Growing Cities. This list looks at things like job growth and population growth.

Once you've narrowed your search to several markets, how do you analyze them?

Goals

• Must Have: Cash Flow
• Nice to Have: Appreciation
• Strategy: Buy and Hold - Rent Ready (turn key based on pictures)
• Property Type: SFH
• Budget: Under 200k

Market Analysis Strategy

Step 1: On Realtor.com, search a specific market, and select the least expensive SFH that is rent ready, and use it in my calculation below.

Step 2: On Craigslist, search comparable properties to get the Rent Income.

Step 3: Run below formula:

Cash Flow = Rent Income - Principal and Interest - Tax - Insurance - Vacancy - Maintenance - CapEx - Management

Invested Amount = down payment + closing costs

CoC = Cash Flow / Invested Amount

The CoC is the number I use to determine if that particular market is the "right" market for me.

Am I doing this right or is there a better way to analyze markets?

What do you all think about Mashvisor as they have market analysis tools as well for a cost?

[Joe Villeneuve]

Market Analysis, along with knowing how money works and designing a REI Plan, are the three most important knowledge bases you have to learn. All three must work as one as each is dependant on the other two "equally" for your success.

When I do market analysis, I don't use/follow pretty much everything you mentioned above...probably about 80% of what you listed above I either ignore or go in a different direction.  The most important numbers are the ones with dollar signs in front...not percentages behind.  For the most part, I ignore answers with percentages because they either tell me nothing of real value...or they just outright lie to me.

If you would like an explanation for all of this, PM me as that explanation is a bit long for this format...and would also involve answering a number of questions that the explanation would elicit from you.