How to tell if your target Market is Rehab Friendly?

[Matthew Metros]

What is the framework you use for making sure your target market is rehab friendly. I was listening to episode 63 of bigger pockets where J Scott discusses his experience rehabbing out of state in Memphis.

He said something along the lines of Memphis not having the necessary infrastructure to support a successful out of state rehabilitation for investors.

Curious to know what elements you look for or the systems you use to evaluate rehab and rent ready markets. What makes one market more rent and rehab friendly than the other?

My intuition tells me that things such as:

1. Established market of property management companies exists

2. Easy to find contractors online

[Alex Craig]

I would disagree with J Scott on Memphis having renovation challenges for investors. I will say, the longer you work in this space, the more people you find, but I think that would be any market.  Having been doing this for 10 years, I have sub's calling my project managers and stopping by the office. We are getting rent readies done for on average $1.25 a sqt ft, HVAC system installs for $3,500, roofs replacements for under $5,000, house paints for under $.90 a sq ft, etc.

I think any market can meet your goals, it may just take time to find those people. Over my 13 year career doing this, I have certainly kissed a few frogs, thus when you do find the right sub's, pay them quick!

As I type this, maybe J Scott was referring to Contractors in Memphis, which I tend to agree. In this economy, the good contractors are backed up for weeks and are expensive.  The contractors who are not running a good business are the ones typically working in the investor space, thus are the worst ones. Your best bet here is to act as the Contractor, hiring your own subs or work with a Property Manager who has these services and will be the one managing your property post reno.