How to Choose a Market

Question

I have my eye on a couple of markets - local and OOS - I see potential in each one on my list for different reasons, and with different strategies. Given current market conditions, how on earth do I settle down and choose one now that I'm ready to take actionable steps? I just watched David Green's analysis webinar, and realized that I'm stuck at analysis - I see too many different possibilities and I'm getting overwhelmed and bogged down at this step. Any advice is appreciated!

Patrick Drury · Answer

@Christine SmithIf you're not able to invest locally or are not able to get the returns, you are looking for you should invest out of state. I would recommend looking in the Midwest. Columbus OH is a great place to start looking in the Midwest. It's a nice hybrid of cash flow and appreciation. Also, it has lots of job opportunities and population growth. I also live and invest locally here in Columbus.

Logan McKay Zylstra · Answer

In my opinion, start local! You're in a more expensive market, but I am happy to connect you with a good friend in your area if you have the capital to do so. If not, I am bullish on the Utah market. (I've posted a few times about that on my profile if you care to read my take.)

Finally, On The Market (a new BP podcast) recently gave their top 8 markets. I'd just run with one of their suggestions.

Ricardo Hidalgo · Answer

I think the best way to choose a market it to dissect its economy for it's job stability and growth for more affluent people to settle down. Look to see how much land is available since after x amount of years that market may hit a supply shock. Tax friendly states typically have an edge since money goes farther and It attracts a wealthy crowd to maximize earnings.

You can't go wrong with the panhandle of Florida since our white sand beaches and emerald waters rivals many places that are 2-4 times more expensive.

Schools and family oriented areas tend to hold their values the best regardless of market conditions.

Joshua Janus · Answer

@Christine Smith When researching a market, it is important to pay attention to the factors you highlighted above as well as what brings people to the city and what will continue to do so. If the price is relatively low/sqft and the city has a growing population and job market, the demand for homes will increase which leads to home appreciation. Also see how the specific market handles STR as that brings in a large section of rei investors and can drive prices up. Here is a quick analysis of my market. Paying attention to recent and upcoming capital investments by the city can also give you a good idea of where the money is flowing in the city and you can see if it is recovering or growing. Columbus, Ohio is a great market to invest in. The population has been growing here year over year over the last decade, it is home to The Ohio State University which has over 50,000 students that live here along with those that visit, and it also holds a diverse range of young professionals and traveling nurses to fill the demand of the multiple business corporations and hospitals stationed here. Tech companies are continuously moving here and establishing a footprint in Columbus as well. Intel is a great example, who is building the largest chip manufacturing plant in the US right here, and it will be a $20 billion dollar investment that brings a few new thousand jobs. https://www.dispatch.com/story... Here are a few more recent investments https://www.10tv.com/article/money/business/hydrogen-power-company-hyperion-bringing-700-jobs-to-columbus/530-25907aab-5517-4661-a9f3-d2ed2d5be6b0https://columbusunderground.com/kaufman-development-purchasing-franklintons-idea-foundry-sp1/ https://highlandcountypress.com/Content/In-The-News/Headlines/Article/Development-projects-will-support-1-4-billion-in-investments-in-Ohio-communities/2/73/77342

@Christine Smith When researching a market, it is important to pay attention to the factors you highlighted above as well as what brings people to the city and what will continue to do so. If the price is relatively low/sqft and the city has a growing population and job market, the demand for homes will increase which leads to home appreciation. Also see how the specific market handles STR as that brings in a large section of rei investors and can drive prices up. Here is a quick analysis of my market. Paying attention to recent and upcoming capital investments by the city can also give you a good idea of where the money is flowing in the city and you can see if it is recovering or growing. Columbus, Ohio is a great market to invest in. The population has been growing here year over year over the last decade, it is home to The Ohio State University which has over 50,000 students that live here along with those that visit, and it also holds a diverse range of young professionals and traveling nurses to fill the demand of the multiple business corporations and hospitals stationed here. Tech companies are continuously moving here and establishing a footprint in Columbus as well. Intel is a great example, who is building the largest chip manufacturing plant in the US right here, and it will be a $20 billion dollar investment that brings a few new thousand jobs. https://www.dispatch.com/story...

Here are a few more recent investments https://www.10tv.com/article/money/business/hydrogen-power-company-hyperion-bringing-700-jobs-to-columbus/530-25907aab-5517-4661-a9f3-d2ed2d5be6b0

https://columbusunderground.com/kaufman-development-purchasing-franklintons-idea-foundry-sp1/

https://highlandcountypress.com/Content/In-The-News/Headlines/Article/Development-projects-will-support-1-4-billion-in-investments-in-Ohio-communities/2/73/77342

Remington Lyman · Answer

It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s strategy for long-distance and made up of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to confidently invest in any market.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio.  I am also looking to invest in Cincinnati and Cleveland.

Todd Rasmussen · Answer

@Christine Smith

What strategy suits you best? Go with the market that lets you start with a strategy that suits you.

Robert Reynolds · Answer

@Christine Smith

I’m excited for you and you should take immediate action if you are ready. In expensive markets I always recommend trying to either house hack, live in flip or look into buying short term rentals.

I’d love to connect and talk further about your options.

Amaury Zambrano · Answer

If you see the potential for both markets, I recommend starting local. The following actionable step, in my opinion, would be to network with local investors doing what you want to be doing.

Christine Smith · Answer

That's a really great question - we've done well with LTR and mid-term STR. I think I'm also feeling a push to maximize profits so have perhaps initially disregarded LTR even though we're experienced in that category.

Bill B. · Answer

Find a market without state  income tax, low property taxes< cheap insurance, no hurricanes, tornadoes, or snow, average  property age under 30 years old, that people are moving to and if possible is size restricted by geography.

How to Choose a Market

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