Market research strategy for BRRRR/Buy and Hold

[Jason Howell]

Hello to the fantastic BP community! Life changers, you all are. But you know that. :)

I'm near completion of finalizing my fourth buy-and-hold property in Indianapolis via turn key and I continue to get this feeling that it's time I take the entire process into my own hands. Tons of reading, lot's of books (my current fave is Long Distance Real Estate Investing by David Greene, SO inspiring and information--dense!)

I have a new morning ritual that gets me up an hour before the kids. That time is 100% devoted to researching markets to get comfortable finding something that can work for me with the BRRRR strategy. No better time than now.

What is YOUR favorite strategy for market research? I have a huge list of markets that, each morning, I pick one and just start searching/reading/taking notes on any random bits I find about the area. But it feels a bit broad at the moment.

- How do you BEGIN to find something that hasn't been on your radar?

- What are the things you look at FIRST that matter MOST so you don't waste your time? (property tax? landlord laws? etc)

- What process do you go through when researching a new market? I really want to systemize my approach so it's thorough, cohesive, and not a waste of valuable time.

Areas on my list currently: Akron OH, Albany NY, Birmingham AL, Boise ID (I'm from there so there's familiarity), Cincinnati OH, Cleveland OH, Columbia SC, Delaware County PA, Memphis TN, Oklahoma City OK, Philadelphia PA, Pittsburg PA, Richmond VA, St Louis MO, Tampa FL, Wilmington DE

So yeah, a lot there and I know I'm missing many. But that's what I mean. The country is so vast. Knowing where to begin and HOW to best begin there is the big challenge at this stage.

Strategies that work for you?

[Jonathan McGee]

@Jason Howell networking in your target market would be your key to success! Pulling together a solid and trusted team would be your first step. This would consist of a seasoned wholesaler or investor friendly agent, general contractor, inspector, property management, local mortgage broker and possibly a marketer or property scout. Find a deeply discounted off-market property via your wholesaler, agent or marketer, have your licensed inspector crawl through the property and supply you a report with photos, pay your contractor for a line item rehab estimate, then reach out to your property manager for potential rent rates, history of vacancies in the area and their overall opinion for a long term hold on the property.

I'd suggest sticking to B/C+ areas as buying into A class areas can easily exceed your budget and may or may not net the returns your expected. You can gradually move into the higher class suburb type areas once you've become thoroughly familiar with the market and which parts of the A class areas are worth jumping on deals. You'd also want to make sure you find a local bank branch with a mortgage broker that offers up to 80% LTV with no minimum (several lenders only lend up to 75-80% if the value is $75k or higher, anything below they only lend up to 50%).

   As stated previously by @Dean Harris several investors have seen a lot of success utilizing the BRRRR method in Memphis since you can still buy discounted off-market properties here in B/C areas, run a minimal rehab and then cash out at 80-110% of the cash you put in.