BiggerPockets Real Estate Podcast - 990: 2 Real Estate Markets We’re Investing in Now (Should You?)

Starting point is 00:00:00 There are two or three questions that I constantly hear as a real estate educator. And one of them that's been coming up a lot recently is what market should I invest in or what do you think about some random market that this person is interested in? And these are really good questions, but there's just so much complexity that goes into making that choice. And not every market is the right fit for every investor. And so it's really hard to give advice that applies to every. So in today's episode, we're going to walk you through how we choose markets so you can sort of reverse engineer our thinking in a way that works for you.

Starting point is 00:00:44 Hey, everyone. Welcome to the Bigger Pockets Real Estate podcast. I'm Dave Meyer here with Henry Washington. Hey, Dave, man. You know what? I hear that question a lot as well. And when I hear that question, what my brain actually hears is someone wanting to know where's the magic button market where you can just tell me I'm going to win. I don't have to do anything and I'll just go buy property there and make a bunch of money, right?

Starting point is 00:01:07 Doesn't exist. But like with anything else in real estate investing, there's a lot of work that needs to go into you understanding a market and then comparing that to your personal investment strategy that you want to do and seeing if that's a good fit. So today we're going to talk, as Dave mentioned, about getting up close and personal with our own markets. These are places that we've currently chosen to invest in. So we're going to break down why we chose these markets. We're going to talk about the data that we looked at beforehand that helped us decide to invest in these markets and what we'd wish we'd known ahead of time before we invest there. We're also going to give you some action steps that any investor trying to evaluate a market can utilize today. And for those of you listening who are actively scoping out markets for your next deal, we now have two brand new tools from bigger pockets.

Starting point is 00:01:56 It's a market finder and a deal finder. And I'm very proud and excited to say that I've personally been working on these projects for the last. couple of months, and I am very eager for you all to check them out. Market finder is full of all sorts of data, writeups, information about different markets to help you pick one. And the deal finder actually helps you build out a buy box and get alerted anytime a deal that meets your criteria hits the MLS. There's super cool tools. You can check them out at biggerpockets.com slash find a market or biggerpockets.com slash find a deal. All right, let's dive into your market first, Henry. Okay, Henry, because I am talking right now, I'm going to put you in the hot seat first and ask you questions.

Starting point is 00:02:38 Tell me about what market did you pick? Well, I think most people expected me to pick Northwest Arkansas, but I talk about that a lot. And so I wanted to talk about one of the other markets that I invest in, which is Joplin, Missouri. Okay. I only know that town city. I don't know. I think town's fair. I've never really heard of it, except there's a show on HBO called Barry.

Starting point is 00:03:00 Have you ever heard that, seen that show? Anyway, it's a show about whatever, Hollywood. It's a great show. But they make in it, they make a TV show about Joplin, Missouri. But anyway, I digress. Tell me about this market. So Joplin, Missouri is about an hour north of Northwest Arkansas. And so if you know anything about Northwest Arkansas, you know that it is a small town

Starting point is 00:03:19 that is cramming a lot of people into it, right? So infrastructure is behind catching up to the amount of people and, you know, companies that are, you know, coming into it. this area, which forces people maybe who are used to living here before all the Hullabaloo to kind of spread out. And so as people start to spread out, I think that areas like Joplin and other smaller subcities within an hour's drive of Northwest Arkansas are going to start to see some influx. And so I like this market for a couple of reasons. One, because of that growth. but two, it is a cash flow market. So in Northwest Arkansas, it can be a struggle to buy cash flow. You have to

Starting point is 00:04:05 get really good at finding good deals. But in Joplin, you can find cash flowing deals on the MLS at times. You just have to be pretty consistent about looking for it. Now, you're not going to get a ton of appreciation in Joplin. It's very, very slow appreciation. It's probably 1% or less year over year. But because there are so many great manufacturing jobs and healthcare jobs, you have a large renter base and you can get fairly decent rents compared to the price of real estate. So I bought a duplex recently. This is one of my last purchases there. I bought a duplex for $73,000. And we get, I think we get between $5 and $600 a month rent per side. So I mean, it's great, great cash flow market. And I haven't even had to renovate that unit. So you can really get decent deals. That's super cool. And I mean,

Starting point is 00:05:00 for everyone who doesn't know Henry's story as well, allow me to just summarize, but you started in Northwest Arkansas, which I think when you started was a bit more of a cash flow market, and now it's booming. And so prices have gone up so much. It's probably flatter. So is the idea here that you're trying to create some diversification and, you know, you have appreciation potential, really strong job market in Northwest Arkansas. Now you're building out sort of a different side of your portfolio. Yeah, that's part of it. And the other part of it is because I bought more units in Joplin recently. And that's just because cash flow is a little harder to come by in Northwest Arkansas. So if I want to continue to buy cash flow, then I have to go where the cash flow is. And so we've been buying more in the

Starting point is 00:05:47 markets where the cash flow really makes sense. And if the market shifts, we'll pivot back to, you know, Northwest Arkansas. But for right now, we can get really good cash flow there. And are you, because I know you're doing, you do like a bunch of value add stuff. You know, burr flipping. Do you do that in Joplin? Or are you sort of thinking, hey, I'm just going to go buy cash flow and maybe I'll do cosmetic rehabs, but sort of make it easy on yourself? Yeah, that's a great question. So we do do value add. But I'm able to buy at price points where it currently cash flows the way it is. So the value add is icing on the cake. Does that make sense? So I'm buying really good deals that cash flow at the existing rent numbers, even with the without having to do

Starting point is 00:06:34 the renovation. And then we do the renovation as tenant turn happens and we get even higher rents. So it's like icing on the cake. We need to come up with a name for this because this is what I've been doing this year. It's not Burr. It's like opportunistic rehab coupled with MLS cash flow. I don't know. That's not a sexy name, but it works so well. It's like, just buy it. It's going to do okay. And then when the tenant leaves, just do like a quick two-month rehab. I just did this recently. And you, I just planned the rehab even before the tenant was out. Like I had already gotten quotes. I already knew. Tenant left. Bam, done. Rents went up, I don't know, 40 percent because it just needed, it just needed work. And now it's providing like a really good cash flow. And it's just an, it's just a,

Starting point is 00:07:22 It was an easy deal. All right. Come up with a better name than that. I'll work on that. But what's cool about these markets that have that you can find cash flow on the market is you don't have to work as hard to find good deals. Every deal that I've bought recently in this market came from just either realtor pocket listings or property managers who have somebody in their portfolio who's told them that they're looking

Starting point is 00:07:49 to sell. And so they'll just call somebody else in the portfolio and say, hey, do you want Easy. And so like you're able to get really good deals without working so hard because there's more opportunity there. But the super secret sauce to why I invest here is I have a unicorn of a property manager who has an operation there. And so they're so good at managing property that all I have to do is figure out what I want to buy and then buy it and then I don't have to think about it again. So that's made it easy for me to want to grow and scale there. So in other words, if you can find good property management in your market, it really can help you grow.

Starting point is 00:08:27 Absolutely. That's a great point. I mean, it makes a huge difference. And in selecting a market, I know people always want to find the perfect market doesn't exist. If you can narrow it down to a couple good ones, then honestly, team matters more, in my opinion. It's like all the numbers in the world, and this is coming from the data guy, don't matter unless you have someone who can actually like execute on the potential. that the market has. And so just a random tip.

Starting point is 00:08:55 If you're deciding between two or three markets, pick the one with the best property manager. That is such good advice, yes. But I want to ask you, Henry, because you, you know, there's a lot of popular areas near Northwest Arkansas, like within a two-hour drive of you, right? So, like, was it just because of the cash flow? Was it because of the property manager? Like, why did you choose Joplin over other potential areas? Yeah, the choice came when I started to research the economy and found out that a health care makes up the majority of the jobs there.

Starting point is 00:09:32 And the Joplin tornado, I don't know what it was it, 10 years ago, wiped out one of the hospitals and part of the other one. And the infrastructure that they've come back with and rebuilt that hospital. It's just been massive. So they're like throwing tons of money into those parts of town and bringing in even more. jobs. And so when I saw the mix of the healthcare industry bringing in jobs, but there's tons of manufacturing job opportunities in Joplin. So General Mills has food manufacturing plants there. And then you've got Eagle Pitcher and Tamco. And they have building products and technology products that are all manufactured in the Joplin area. And so these aren't, you know, super sexy,

Starting point is 00:10:16 flashy companies that people hear about. But there are products that are. made in the USA and a lot of people don't understand where all of these things are made. Sometimes they're just made in these little tertiary, small cities in America. That brings tons of jobs. And most of the people that work at these manufacturing plans are going to be rents. So you've got people making good money in a market that's not expensive. And so you're able to get rents that support the price point of the real estate. So once I saw all those factors, I was like, all right, this is a great place to go ahead and plant some money, get some cash flow. And you just sit on the assets for a long period of time. And I'm still buying deals. So it's not like just because I can get

Starting point is 00:10:52 something on the MLS. I buy it. I'm still buying deals so that if things pivot or maybe these manufacturing companies shift something overseas and they lose jobs in that area, I can sell these properties and recoup my money because I still bought them at a discount. And when did you first buy here? I first bought there probably three years ago. Okay. And has it met your expectations? Absolutely. It's definitely met my expectations. The cash flow is there. And as, As rates have gone up over time, yeah, it's still a little bit harder to get that cash flow. But one of the other things I like about the area is, so in Northwest Arkansas, if you want to do Section 8, it's hard to have Section 8 rents equal the market rents in the area. And so you have less opportunity in Section 8 because you really have to take a haircut.

Starting point is 00:11:41 But in Joplin and Missouri, Section 8 rents are pretty on par or sometimes more than market rents. And so weird how that works. You're able to take properties. And then we like to add bedrooms. So we'll convert single car garages to bedrooms. And the more bedrooms that you have, the more rent you can get on Section 8. So there's opportunities to create cash flow in Joplin that I can't do in Northwest Arkansas. Okay.

Starting point is 00:12:03 So we do have to take a quick break. But when we come back, we'll hear about the reason. Henry actually goes out of his way to visit his properties in Joplin and what he wishes he knew before. Real estate investors, the April 15th tax tax debt. deadline is coming fast. If you own rental property and haven't done a cost segregation study yet, you could be handing thousands of dollars to the IRS that you don't have to. These studies let you write off as much as 25% of your building and generate huge tax deductions. Costsegregation.com is an online self-guided software that makes cost segregation fast and affordable. So it finally

Starting point is 00:12:41 makes sense for smaller rental properties purchased for as low as $100,000. With pricing under 500, and an average savings of over 25,000, it's just a no-brainer. What's more, audit support is included by the number one cost segregation company in the U.S., but you must complete it before the tax deadline. Go to costsegregation.com and use code tax deadline to get 10% off your first report. Don't overpay the IRS. Head to costsegregation.com before April 15th. Do you ever notice how every passive investment somehow turns into a very active lifestyle,

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Starting point is 00:13:43 They've partnered with bigger pockets for over a decade, help. helping thousands invest smarter. If you want to do the same, visit biggerpockets.com slash retirement to learn more. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question.

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Starting point is 00:14:22 plus interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Hey, investors, we are breaking down how Dave and I picked two of the markets that we're investing in today. So let's jump back in. Do you go and visit? I get this question. all the time for people who invest out of state. I guess it's not like out of state, but it's not convenient for you.

Starting point is 00:14:51 So like what, how often are you there looking at these properties? I go and visit probably more than most people would, but it doesn't have a lot to do with my properties. It has more to do with they have the most delicious wing place I've ever eaten at in my life in Jobblin. What? In your life, is that true?

Starting point is 00:15:11 Is that hyperbole? No, that is legit facts. What? Hackett's wings and Joplin is legit and I will go there for no reason. This just shows my priorities in life, but you know, you've been talking this whole time. I didn't like look up anything about Joplin to be perfectly candid. I'm not going to invest there realistically. But like now I'm looking at flights to Joplin because I want to go with these wings. Hackett's Hot wings.

Starting point is 00:15:39 Okay. Stupid good. I see it. It's there on Main Street between fifth and sixth. That's it. All right. I got to get pictures of these babies. Let's see.

Starting point is 00:15:48 So for no reason at all, I'll be like, you know what? We should go check on this property because we want wings. Honestly, I know this sounds stupid. Like, you should do based stuff off numbers. But if you're going to start a business number, you should like going there. Yeah. Like, it's not for nothing that like there's something that you like about Joplin. Honestly, I drove around the Midwest and looked for different markets.

Starting point is 00:16:11 And there were some markets. I was just like, I wouldn't hang out here. And for that reason, I couldn't, like, figure out where to invest. Yes. Which I think is a whole other thing. Yeah, you're not excited about it. I'm not excited about it. And I can't, I like don't understand the tenant, you know, or the home buyer.

Starting point is 00:16:26 Because I'm like, I, this isn't me. And I don't know if that's you with Joplin. But like, I do think there actually is something to it. Like, if you like going there. Because you're going to have to go there if you're going to invest in that market. So are you now content with your, like, market lineup, would you say? Or are you looking for new markets? No, I'm pretty content with the market lineup.

Starting point is 00:16:51 Joplin is safe and comfortable in terms of risk and reward. And I have great market dynamics in Northwest Arkansas. So I have a place where I can invest and get cash flow and appreciation. You get a little bit of cash flow. You get better appreciation in Northwest Arkansas. And in Joplin, I can get great cash flow. without a ton of appreciation, but it's a safer play. And so, and then I'm able to, to test different strategies. So, like, we're testing midterm in northwest Arkansas. And it's going well. And we do some

Starting point is 00:17:28 short-term rentals there. And in Joplin, I can just kind of stick to the old boring, you know, single-family, small, multi-family, long-term buy and hold. And because they have a hospital industry there, I could try some potentially midterm rental for hospital staff at some point if I wanted to expand. So I guess a long-winded way of saying, I can do pretty much anything I want to do within the real estate investing space in the markets that are within a mile from me. And so it's hard for me to even think about investing anywhere else. I don't have a reason to.

Starting point is 00:18:03 That's exactly right. It's why you have to figure out your strategy before you pick markets, because like, otherwise you'd be thinking like, oh, you get FOMO, right? You're like, hear about a cool market. You're like, I'm going to go invest there. But you're like, why? I don't need to. I know what I'm trying to accomplish. And I'm executing on it. So why expand beyond that? And I think what I want everybody to know is what makes this good for me, yes, is the fact that I can do all those things I just talked about. But I have secret sauce here. Like I have a cheat code because I live here and I understand the little pockets of the neighborhoods. I have phenomenal property management that I can build a relationship with. It's the things that don't really have much to do with those market dynamics that are making me successful. It's because I know my market. I know what's coming. I know what's coming in the future. I know where those things are going to. And I have a phenomenal team because I've been able to live here and build that team and relationship. And those things are what really help you kind of take a real estate investment over the top.

Starting point is 00:19:07 It sounds like you did a lot of research here, Henry. Is there any other research or things you wish you'd do about the market ahead of pulling the trigger? Yeah. Well, first and foremost, I obviously wish that I knew about Hackett's wings before I did because that means I could have just eaten more. You could have bought years earlier. Think of all the years you could have eaten. Right.

Starting point is 00:19:27 But on the opposite end of that spectrum, I also found out that precious moments is from there. and there's the precious moments museum and hotel. I don't know what that is. What is precious moments? Google Precious Moments dolls right now. Oh, do it right now. Oh, I don't like dolls. I don't like this.

Starting point is 00:19:46 Freshest Moments' dolls right now. Oh, weird. Those are a little creepy? I find dolls a little creepy. Yeah, yeah. Precious Moments dolls are the top tier creepy doll. But it was a huge thing. I think what in the 80s or 90s, it was like,

Starting point is 00:20:04 It was massive, massive. Everybody collected precious moments stalls. Okay, some of them are cute. They're not all creepy. This is from there. And so just randomly you'll see, you know, billboards advertising it or just, you know, people just have a unique collection.

Starting point is 00:20:21 A little bit, a little bit, a strange. I think I'm traumatized. One of the worst hoarder houses I've ever been in had. I'm going to throw out a number, but it sounds crazy, but there may have been 400. dolls in the two rooms I went into before I like ran out with my tail between my legs. I was terrified.

Starting point is 00:20:40 I don't know that it qualifies as a hoarder house unless there's at least 10 dolls. That's so true. How do you know? It's quantity of dolls. All right. Well, thank you for sharing all this stuff with us, Henry. Appreciate it. I think that brings an end to my grilling of you.

Starting point is 00:20:58 Well, perfect, because I would like to change it up and start to ask you about. what market you would like to talk about investing in. Yeah, so I'm actually going to bring a market that I don't think I've talked about on this show because I invested in it as a LP, a limited partner in a syndication. And I've talked a lot about how I look at other types of markets and finding markets that I've invested in. But I don't think I've ever talked about evaluating syndication markets in the past. So I thought that would be fun.

Starting point is 00:21:30 and the market that I invested in is in the greater Norfolk, Virginia area, but the specific city or town is called Williamsburg, Virginia. Awesome, man. You know, what's interesting is I used to live in that area. That's where I went to college. So I spent eight or nine years in the year. Yeah, I went to, I did four years of school there, and then I worked for a couple of companies after I got out.

Starting point is 00:21:57 So I started my working career doing some. some modeling and simulation work out in the Virginia Beach area. Big, big military area. And so that's what I was going to ask you. Did the military jobs and presence have anything to do with the dynamics of why that they picked that area? No, I'm just super into colonial war reenactments. I thought I saw a Confederate hat floating around here. Colonial war, not civil war.

Starting point is 00:22:34 Oh, okay. Sorry. There goes my history knowledge right there. Ladies and gentlemen. For those of you who don't know, in Williamsburg, Virginia, they're pretty famous for having, like, one of those old-timey villages, Williamsburg village, where people, like everyone is in character and they dress up like they're in the 1700s, like revolutionary times.

Starting point is 00:22:56 And I went in high school. That's the only time I've actually been to Williamsburg. other than I didn't go actually when I made the investment. That's the only time I've been here. But in reality, to get serious about this question, the reason I like Williamsburg is it's a big retiree market. Actually, it's got a very big 55 plus community. And the syndication I invested in was geared towards 55 plus. And there's just enormous population growth in this area.

Starting point is 00:23:27 And the property is just super nice. and all of the dynamics seemed to suggest that it was doing was going to do pretty well. And I thought it was interesting because I talk a lot and we talk a lot on the show about just looking at like quote unquote population growth. But I thought this was an interesting case study and sort of going a level deeper and looking at the specifics of the product that you are investing in. And so you were talking about in Joplin like a lot of the area is, manufacturing jobs and families. So like you want to, you know, buy product that is appropriate for that. I sort of went the other way around here. I was being offered a product. And I was like, okay, I don't really know that much about 55 plus communities. But once I started digging into it and looking

Starting point is 00:24:15 at this market for that demographic, it just made a whole lot of sense. Yeah, absolutely. And I mean, Williamsburg has a lot of other, you know, economic factors that are cool as well. So there's huge university there. William and Mary is there. And it is, yes, although we joke about it, the Colonial Williamsburg is a, it's a national attraction. Like, people come from all over the country to visit Colonial Williamsburg as well as, it's a big shopping destination. Like the Williamsburg outlets are like a thing on the East Coast. People talk about it and travel there to go shopping. So there's lots of great things in the economy there that I think is, is pretty cool. All right, It's time for one last quick break, but when we come back, we'll learn about what Dave found

Starting point is 00:25:01 in his market research that made him want to bet on this market and why he considers this a defensive move in a high interest rate environment. Did you know you can go on vacation and actually earn money? Because while you're out exploring new horizons, your home is sitting there, dark, silent, and wildly underemployed. And it could be making you extra cash. And Airbnb makes that possible with something called the co-host network. If you're away for a while or you live far from your place, you can hire a vetted local

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Starting point is 00:29:03 Cost segregation guys is the go-to firm, having done over 12,000 of these studies with $500 million in total depreciation identified. Head to Costsegregationguise.com slash BP to get a free proposal and see your potential tax savings. Welcome back to the Bigger Pockets Real Estate podcast. Let's pick up where we left off. So I think I'm more curious to know. So like how was the opportunity presented to you? And then like what did you specifically go and look for to match that? Yeah. So I found this syndication just through networking. I think as most people find syndications. but it was in an interesting time. So I had some money I wanted to invest. It was in April of 2022. So interest rates were already going up. Everyone knew they were starting to go up. And so I was

Starting point is 00:29:56 looking to make a sort of defensive investment. And so I sought out different types of deals than I would normally look for in syndications. We're normally like kind of take big swings. Like that's where I take my risk. And instead, I wanted to find something. that was just seemed like rock solid. And so, I mean, this is a whole other show, but it did a lot of due diligence to the deal and the debt structure. But I sort of started with the same high-level analysis that I would do anywhere, which was just looking at supply and demand dynamics.

Starting point is 00:30:31 And that looks a little bit different in multifamily and syndications than it does in residential housing, whereas it's pretty easy to forecast supply and demand in multifamily. it's one of the benefits is like it takes years to build the multifamily apartment. So you have an idea of how much supply is coming online two or three years ahead of time. And so what I found when I did this research was that there was just much more demand and much more household growth and population growth than there was in supply growth. And when you see that, there's an imbalance that means that at the very least, rents are going to stay stable and they're probably going to go up. And that's sort of what I was looking for, because in 2022, that's when things started to slow down. And I wanted to

Starting point is 00:31:17 find something that seemed rock solid. Then I looked at the job growth in that area. It's crazy. The unemployment rate there right now is 2.6%, which is extremely low. Even the whole country's at 4.1%, which is also low. But that's even lower. And so there's just basic stuff like that that seemed really good. And then with syndications, you also want to look at things like cap rates and how much they've expanded and where they're at historically and vacancy rates. And so I, this one for me, was a very data-driven analysis. And I know that's probably not surprising to you or to everyone. But with other places I've invested, especially where I buy on my own, I always go and like talk to people. And I've done this with other syndications too, just invested, never been to the city, just based it based on economics and the quality of the operator.

Starting point is 00:32:19 Well, first of all, thanks for that lesson in how to evaluate a syndication deal. One thing you were, and this, you know, this may be getting a little too nerdy for folks, but one thing I was thinking about when you were talking about researching the supply and demand, you found that there was way more demand than there was supply coming online. And you can see that supply coming online because it takes time to build those. when you took those numbers and you compared it to what was being pitched to you, were they assuming that rent growth or were they being conservative about that rent growth? Great question. Yeah, no, they were anticipating very modest rent growth. So they were basically keeping pace with inflation, which is great.

Starting point is 00:33:02 That's what I want to see. And they've been wrong in the best way possible. Absolutely. I mean, I don't want to brag because a lot of syndication. aren't doing great. I'm in one or two that are fine, but not doing amazing. But this, people are pausing distributions. There's no cash. I just got a bonus distribution on this one. They just sent me, they had too much money. So they sent it out to everyone. So it's doing quite well. And I think, you know, with multifamily, it is, at least in my opinion, it's just more

Starting point is 00:33:33 of a math problem. There's less of the emotion to it. There's less of the, you know, getting a really good feel for the path of progress. Like it's a little bit more dollars and cents and this one worked out at least. Yeah, this is this is great. I know the the premise of this wasn't to talk about how to evaluate a syndication deal, but I just feel like it's super great information for people because a lot of syndications got in trouble because they looked at the same data you looked at and then they added it into their underwriting as if it was guaranteed, right? And so then when if they're wrong and those things don't happen, now they have to do capital calls or they're not able to give distributions and things because they've either paid too much or they're not producing the returns that they

Starting point is 00:34:19 were looking for. So when you're evaluating a deal like that, if you're able to see, hey, there's potential for icing on the cake here because they didn't bake this in to their numbers, then you're hedging your bet. You're being safe. So thank you for sharing that. Absolutely. Yeah. And this is something that people can do too. I mean, it's something I really recommend is truly, if you believe in supply and demand, which you should, it's like looking at the imbalance in the relationship in any market is going to tell you the broad trends that are going to exist in your market. So if there is more supply than demand, that's going to put downward pressure on rent prices and housing prices and the opposite

Starting point is 00:35:03 of truth. There's more demand than there are supplies, put upward pressure. You still have to operate well. You still have to do everything. else. But if you want to know, like, where the, where the wind, if the wind's going to be at your back or the wind's going to be in your face, like, that's what you need to understand. And there are many different ways to evaluate that. We have all sorts of information on bigger pockets that can help you evaluate that for your particular market. But I know data analysis can seem complicated, but it really kind of just boils down to that if you really want to understand the data side of picking a market. Okay. So now we've both done our markets. Before we get

Starting point is 00:35:38 out of here, Henry. Do you have any last tips for our listeners on how to pick a market, what data they should be looking at, what steps they should be taking? Yeah, for me, I'll just try to keep it really high level. What I want to know is can I make money the old boring way, meaning like long-term rentals, right? So I don't. And then like if I, that way, if I want to try something different, I can pivot and try like a short-term rental, but I don't ever want to evaluate the market purely based on like a higher dollar strategy. So, um, and I think about, well, what do I need to support that? If I need to support long term rentals, then I need an economy that has jobs where people are

Starting point is 00:36:18 going to be renters. Um, and I need them to want to live there. So the main things I look at are what does it cost me to buy the real estate. Um, and then what does, what do the average person pay for rent in that area? And then where are they working? And, Are those industries going anywhere? And then I look at are people still moving to this area? So I want to make sure that town's not, you know, slowly dying or people are slowly going to get in your way. So to wrap that in a pretty bow, I'm looking at population growth year over year.

Starting point is 00:36:51 As long as it's flat or steadily growing, that's positive. I'm looking at what's driving the economy and making sure that those jobs are jobs that are either flat or trending up or not going anywhere anytime soon. and then I'm looking at the cost of the real estate. Is it affordable? Is it under the national average and supports those rents? That's really about it. That's excellent advice.

Starting point is 00:37:13 I mean, it really doesn't need to be super complicated and you don't need to go the levels I do because I just find it interesting. That is not necessary. It's a weird personality quirk. But that's great advice. So I'll stay away from the data actually and just give you, provide like a four step framework I always tell people when they're asking, where should I invest? I think it comes out of four really easy things. One, figure out your goals. Are you looking for cash flow? You look for

Starting point is 00:37:42 appreciation, some combination, you know, what are your goals to build a short list after that, five to ten markets that you're going to do a deep dive on? And if you, like, this one, I think is where people get hung up because if I would invest anywhere in the country, how do I pick five or 10, that's where I think those lists that I often produce are helpful. That's what they're intended for. They're not meant to tell you exactly where to invest. They're intended to help you narrow it down. So on Bigger Pockets, for example, on our market finder, we have the top 25, I've picked 25 markets that I think are solid and that you can go investigate. But step three is you have to go and do the research then after that. Like those lists aren't there to tell you

Starting point is 00:38:23 what to do. So pick those five to 10, step two. Step three, go do the, go do the the research Henry was just talking about. Look at the metrics he just mentioned. And then step four, we haven't talked much about this, and I violated this for syndications, but go visit. Pick one or two. Go visit. Meet the property manager in person. Meet your agent in person. Get a sense of the area. Find your chicken wing place. And, you know, make sure that it's a place that you identify with, you like, you have good people on the ground, and then just choose and don't over stress about it. But I think if you just follow those steps, like, you will find a great market. Boom.

Starting point is 00:38:59 From the data deli himself. All right. Well, thanks, man. This was a lot of fun. I appreciate you coming and joining with us. And if any of you need some help, looking for a market, we just launched our brand new market finder tool on Bigger Pockets. You can find it at biggerpockets.com slash markets.

Starting point is 00:39:17 Thanks for listening for Bigger Pockets. I'm Dave Meyer. He is Henry Washington. We'll see you next time. Do you ever notice how every passive in the somehow turns into a very active lifestyle. Active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes, 10% below market value in the best markets across the country without making real estate your second job? That's exactly

Starting point is 00:40:01 what rent to retirement does. They're a full service, turnkey investment company handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75 They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more.

BiggerPockets Real Estate Podcast - 990: 2 Real Estate Markets We’re Investing in Now (Should You?)

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