Multifamily Syndication Market parameters and where to find them

[Duke Giordano]

Hello All,

In evaluating a particular market when looking at multi-family syndication, what in your opinion are some of the most important market parameters (some I outlined below)and where can one find this info, preferably free (also outlined below).  For example some site such as rentometer are pay only.  What sites do you all use to best/easiest find this information?  Such parameters would be:

1. Population Growth: US Census, Data USA, city-data.com

2. Job Growth: deptofnumbers.com

3. Crime Rate: city-data.com (hard to find), crime reports, justicemap.com, neighborhoodscout (pay)

4. Median Household Income to Avg Rent Ratio: city-data.com

5. Landlord Friendly states: Where can one find which states are landlord friendly

6. Job Diversity: not sure where to find this type of info

7. School District: can be found on Real estate sites such as zillow, realtor.com

8. Rent growth in a particular Zip Code: Rentometer (pay), Aprtmentlist.com, rentonomics, rent cafe, rent jungle

Thanks in advance for your input

[Brian Burke]

1. Population Growth:  You named them, but I'll also add Google.  Since what you are really looking for here are markets that have above-average population growth you can search for cities with the highest growth and you'll find all sorts of articles that name names.  But most importantly these articles boil down all of the cumbersome and boring data that the Census Bureau has into an easy-to-follow list.

2.  Job Growth:  Same answer as #1.  I'll add reports such as the Milken Institute's annual "Best Performing Cities Index" and PwC/ULI's annual "Emerging Trends in Real Estate" reports that rank cities across the country based on factors such as job & wage growth as well as other factors that impact real estate outcomes.  Also look at reports from major commercial real estate brokerages such as Marcus & Millichap, Berkadia and CBRE.

3.  Crime Rate:  I use Trulia--yeah, the real estate site Trulia.  There used to be a link to their crime mapping feature on their website, but no longer.  Now you have to dig for it.  The way to do it is go to the menu at the top right, expand "Local Info", then select "All Trulia Neighborhood Guides".  Once there, type in the city.  Then you'll see a map of available properties for sale in that city.  Click on one (any one) on the map that is close by to the property that you are analyzing.  When the property comes up, just below the picture and listing price you'll see "Crime" listed under "Local Information".  Click that, and a map will come up showing a crime heat map.  Now scroll around on the map until you find the location of the property you are analyzing.  It's a pain, but it works.  Another source is communitycrimemap.com.

4.  Income to Rent Ratio:  PwC/ULI's annual "Emerging Trends in Real Estate" report.  There are data tables in the report and this is one of the data fields.  In the 2020 report it's on page 46-47, far right-hand column.

5.  Landlord Friendly States:  Probably google it and you'll find lists.  Or most likely it's red states.  But hopefully you don't find such a list.  No elected politician wants to be known for giving a break to the evil landlord, so if such a list were published it might spark politicians into action to change the system in favor of tenants.

6.  Job Diversity:  I'm not sure where to get this for free, maybe the bureau of labor statistics?  I get it from paid sources REIS and Axiometrics and CoStar so I haven't searched out a free source.  There's probably one out there though.  I tried City-Data, no luck there.

7.  School District:  www.greatschools.org.  that's great schools dot org if the link gets removed by mods.  :)

8.  Rent Growth:  Any free source for rent growth is total and complete garbage.  They just rely on macro-level rent averages which really tell you very little.  Unfortunately accurate info only comes from the paid sources.  They aren't free because this is difficult to get an accurate read on, so it becomes labor and system intensive, which doesn't come cheap.

If you are looking for all of this to analyze a syndication investment, the best source to get a lot of this info for free is from the sponsor themselves.  Let them pay for the expensive paid data sources and then share the data with you in their offering documents or upon request.  That's what good sponsors are there to do--to educate themselves with the best data so that they make good decisions on behalf of their investors, then share how they arrived at those decisions with their investors.  They should be supporting their assumptions with third-party verification in support of their investment thesis.