All Forum Posts by: Alexander Canha

@Alexander Canha oh nice! Man that's a market shift!! Keep us updated. If you shift back to OOS don't hesitate to reach out for support. I'm only in OKC but have helped so many OOS investors through the process and am happy to answer non-market-specific questions for you! 

@Alexander Canha exciting!! What are deals looking like? I like cash flowing stuff that hasn't been fully flipped. I'm curious if it's all turnkey stuff or more existing rentals? 

@Alexander Canha how are the providers looking in KC? Digging into that side of things yet? 

@Alexander Canha

I’d say you’re overthinking the MSA and not focused on the submarkets within the MSAs. There are probably great submarkets in all of those MSAs. I talk about on my podcast how I just picked Kansas City. You want a market with JOBS, population growth, and diverse employment. A job is what allows most people to pay rent. Jobs means that people move to that area, have kids, grow the population. There are some metrics you can really drill down into - but that’s what is going to mater. Now jobs coupled with lack of inventory and restrictions on building-that IS why SF prices are so high.

Make sure the market you pick has the asset you want. If you want small MF buildings vs SFH how does that change your selection criteria? Which market has what you want in terms of assets and returns.

I'm an out of state investor looking for potential markets to invest in for buy and hold SFR rentals. After hours of scrolling around the map and trying various cities, I was not having much luck finding a market where the numbers made sense. Nothing was getting close to the 1% "rule". So I decided to do some data analysis across the US to see where those markets might be. Here is how I did it and the results. I hope you find this useful!

I wanted to find markets where there are 1% properties (the monthly rent is about 1% of the ARV). I downloaded the data from Zillow (https://www.zillow.com/research/data/) on median rental price by zip code, and the median sales price by zip. I used the most recent data from May 2019. There are 13059 zip codes with both rental data and sales data. I next filtered for zip codes that have a population of at least 7k people. I also picked only zip codes that have a median sales price of at least $100k. That filters down to 6440 zip codes.

Of those, per zip code I did the division to see how close it is to 1%. I selected the zip codes that were 0.8% - 1.2%. That drops to 965 zip codes - now we’re getting somewhere!

As one last filter, I picked zip codes that have a population growth of at least 25% (using usa.com data so 2010-2014). The idea here is to find markets that have a decent chance of appreciating over time.

And the final result is 99 zip codes. Here they are sorted by state!

• AL: 35040, 36567, 36582
• FL: 32025, 33936, 33981, 34109, 34110, 34114, 34287, 34465, 34472
• GA: 30038, 30122, 30168, 30213, 30291, 30296, 30331, 30349, 30701, 31088, 31525
• IL: 60002, 60073, 60443, 60446, 60505, 60538, 62221
• IN: 46235
• LA: 70520, 70726, 70785, 70820
• MS: 38637, 38671
• NC: 27127, 27834, 28217
• NJ: 08330, 08759
• OH: 43950
• OK: 73135, 73160, 74429
• SC: 29073, 29229, 29316, 29505, 29527
• TX: 75051, 75134, 75159, 76134, 76140, 76310, 77014, 77034, 77038, 77041, 77045, 77047, 77049, 77064, 77065, 77067, 77073, 77075, 77082, 77083, 77084, 77086, 77089, 77090, 77301, 77303, 77338, 77373, 77378, 77396, 77449, 77471, 77477, 77521, 77539, 77545, 77591, 78043, 78046, 78222, 78224, 78503, 78504, 78526, 79416, 79423, 79707
• WV: 26104

Some caveats: This is using median data from zillow for rents and sales. I'm sure that number has had some significant massaging before zillow puts it out. For rents in particular, it seems like some of these zips have no rentals or only very few - those should probably be thrown out. Also, median doesn't capture the diversity in a market. The median SFR rental may not be directly comparable to the median sale. Likewise, zip code is a very blunt geographical segmentation and misses variations of neighborhood, etc. And of course I filtered out a bunch of stuff as described above. Basically, I'm sure I missed out on areas that have 1% properties and not all of the properties in these zips will be 1%. But this should be a good starting point for doing detailed property analysis.

Hopefully this list is useful for those of you looking for new markets as I am. I’m happy to answer any questions.

@Alexander Canha of course! What markets are on your radar so far? 

I've purchased three investment properties through Roofstock and I am currently in the process of purchasing a fourth.  I've purchased one investment property outside of Roofstock.  I agree with @Ross Yeager in that this isn't too bad of an issue.  Deals can fall apart for a variety of reasons at different points in the process.  You lost no money and Roofstock is making an effort to make it up to you by waving the market place fee of your next purchase which is $500+ depending on the purchase price.  I know it is a frustrating experience, but I wouldn't let this incident dissuade you from utilizing Roofstock to acquire investment properties.