Epic Real Estate Investing - 3 Hot Strategies for Finding HOT Markets | Episode 135

Episode Date: December 8, 2014

If you’ve been searching for a hot investment market, then grab your pen and paper because this episode cannot be missed!  Matt is sharing industry best practices that he uses in his own business, most of which have never been heard on the show before.    Learn game-changing tips and tricks, including the ListSource.com loophole that can help you identify the hottest markets in your area for free!  From surveys to landing pages and everything in between, Matt is sharing it all.  Enjoy! ------- The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E ducation P roperties I ncome C oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Broadcasting from Terrio Studios in Glendale, California. It's time for Epic Real Estate Investing with Matt Terrio. Hello. Hello, and welcome to episode 135 of the Epic Real Estate Investing Podcast. And this is the place where I show people how to escape the rat race using real estate. It's the easiest and that's the fastest way to do it. It's still a lot of work. Okay?

It's not without its challenges, yet it is still the easiest and fastest way to get out of this darn rat race. Now, to get out of the rat race, if you want to even accelerate that more, to get started, to get the best results, it would be in your best interest to find a hot market or hot markets. Now, keeping that in mind, what I just said there, that can accelerate your progress out of the rat race. But I want you to know that any market will do. any market will work as long as there are houses there and as long as people live in those houses, any market will work. So don't use that as an excuse to not get started. Like, for example, if you feel you don't live in a hot market, no, no, no. If you live somewhere where other people live and they all

live in houses, that market will be just fine. But some markets, they do offer more opportunity than others. But they all offer enough opportunity for you to escape the rat race. Okay, so no excuses. Now, over the years, I've used different services, different systems, different strategies and techniques to finding hot real estate markets of which to target. And I want to share those with you today. I'm going to share you my three favorite. And I'm going to share those with you in 30 seconds right after this. Alert! Alert! Real estate investors, listen carefully. A closely guarded secret reveals that closely guarded secrets aren't really that closely guarded. Seriously, go to find motivated sellers

ASAP.com to get the inside scoop on how the nation's most successful real estate investors really find their deeply discounted properties. Go to find motivated sellers ASAP.com. Deeper discounts, less secrets. Find motivated sellers ASAP.com. So what's a hot market? Well, a hot market is pretty much just wherever the demand is. You want to be the supply for that demand. The demand meaning people want, a large group of people want what's there. And, and you want to be the person that can provide what they want, what's there. And there are different ways to identify the demand. And I'm going to go over three of those today.

And this one, this first one is it's one that I used to do. And actually, we've just done this again recently. I've started using this again, but with a twist. And I'll share that twist with you in a second. But what I used to do is I would pick a market just kind of randomly, not necessarily randomly, but where I had a hunch that there would be a good market. I used a little bit of my intuition, a little bit of my local market knowledge. and I'd pick a market.

Or maybe that was based off of something that I had read somewhere, maybe a blog post or a newspaper, or something I had heard from another investor or a podcast or other radio or on the news. There's so many different places you can get your tips and your information from. Wherever it happened to be or however I happen to get that information, I'd just pick a market and I would go in

and I would pull a list of absentee owners. Okay? So these are people that have properties, that own properties in this area, but don't actually live in them. so they're likely rental properties. But then I would go back to those, the absentee owners, I would go search back in history for those that purchased those properties.

Let's say more than 20 years ago, 20 years ago or longer ago. And what that basically suggests is that there's a more than likely chance that there's some equity in those properties. They've owned them for a long time. They've been paying them down for a long time. So there's probably some equity. And that would be my list and I would just mail to them. And like I said, we just did this.

And I mailed to absentee owners that were likely to have a lot of equity in their property. These will be my sellers. That's where I'm looking for. These are going to be hopefully the supply to the demand. Now, for me to kind of build my own demand or to identify who would most likely want what I found, I would then go and I'd pull a second list of absentee owners in that same area that have purchased their properties, say, in just the last six months with the idea that, they were investor buyers on that list.

And these would be most likely a great buyer's list for the sellers that I just mailed to. So as soon as I got a property under contract with one of my sellers, one of the steps on my property marketing checklist is to mail a flyer to the buyer's list of that area. So that's the idea. And that has really, it's always worked out very well. But I just recently found a video online. from Mr. Joe McCall. He's got a podcast as well.

He's a good friend of mine. And he's actually found a little bit of a loophole over at list source.com. It is actually rather ingenious. And hopefully list source doesn't discover this. But it's no harm or compromise to their business, but it is a cool little loophole that can help us as an investor.

So what Joe McCall does, he does almost exactly the same thing that I've always done, what I just shared with you that I do, but he's figured out, how to use this list source loophole to find that that actual hot market. So he does it just kind of what I did, but he does it in reverse. He finds the hottest zip code of any area.

And basically it works like this. When he pulls the sales from the last six months to identify, you know, where the demand is, he goes through the steps of purchasing the list. So he's going through the on list source.com. He goes through and he acts like he's going to purchase the list. and that's two or three screens you go through to click just before you give your credit card. But just before you purchase, list source gives you the option to purchase a partial list of what you pulled up. And when you click that option, the partial list, it allows you to sort that list however you want.

So maybe you don't want, you know, everybody in this city or everybody in that county or all the absentee owners or you just want half of them. You get to sort on what type or what you want to extract from that list. So to create your own customized partial list. And one of the ways that you can do this is also by zip code. Okay. So if you pull all of the absentee owners in a county, now you can just select the certain zip codes that you want to market to in that county. But when you do that, when you identify or, excuse me,

filter by zip code, it reveals how many contacts there are in each zip code. of which also reflects, if there's that many contacts in each zip code, that basically reflects how many transactions there were in each zip code. The number would be the same, ultimately revealing the hottest zip code. So if this one zip code has more contacts than another zip code, there were more transactions done in the last six months by absentee owners or investor buyers in that zip code. So that would mean there's greater demand there, right? Or at least the recent demand has been greater.

So what you can do is you can just take the top 30% or 40% or 50% of sales from those zip codes that ever had the greatest results. And now you can go back, now go back and create your motivated seller list. And you can use the same criteria I used going back 20 years. But just do it backwards. Find the buyers list first to discover where the hot zip codes are, then go back and look for the sellers list using those hot zip codes. Very cool.

And we owe it all to Joe McCall for sharing that with us. I certainly owe it to him because now it's a part of my business. and I believe you can watch Joe's video over at real estate investing mastery.com. He's got a very well put together website over there. He's got a great podcast. He's a wealth of information. He's a good friend of mine. He's a member of the Real Estate Investing Mastermind group that I'm in.

And he's got some real ninja techniques over there when it comes to technology. And this was just one of them. And, you know, I have no idea where he finds the time to discover some of this stuff. But I'm very grateful that he does and that he shares it with us. So awesome guy, big heart, great dude. So it's turned out just to be a really big time saver for me. And this particular tip creates a very cost-effective lead generation system, a very focused lead generation system.

Okay. So that's been incorporated into our standard operating procedure here over at Epic Real Estate to identify the hot markets and how we run our marketing plan now. All right. So that's number one. Okay, number one. That's the first technique that we use. Technique number two for identifying a hot market.

Ask. Ask buyers where they are buying, right? Very simple, very straightforward. However, that could take a very long time to do if you just went around and started asking buyers. Say if you went down to the courthouse steps and asked each person that was bidding on property, where are you looking for properties? That could be a way of doing it. You could go to your real estate investor club meetings and ask them, where are you buying properties?

Where are you looking for properties? But like I said, that can be a very long and drawn out way to do it. And, you know, depending on how good of a networker you're, are, I guess that would be a reflection of what type of information you gathered and stuff like that. So that's too difficult and time-consuming for me. So I'm going to suggest a different way. What we do here is we send out a survey, an electronic survey to our email buyers list. We use survey monkey.com. And I think it's free. Or at least you get 100 results for free. You can upgrade very affordably and get multiple results or more than 100. But we use that.

and we find out where our existing buyers are looking for properties. So that's where the demand would be. That's where the demand is coming from our current list of buyers, the people that we already have. So no need to go and find new ones. If we can find out where our current list of buyers are looking for properties, then we can go in and create the supply there. We can market to those areas and create the supply for our existing buyer list.

Now, if you don't have a buyer's list yet, then for this technique, for finding a hot market to work for you, you'll need to build one. Okay, you'll need to build an email buyers list of which should be happening for you all the time anyway as long as you have a landing page set up for your business. You're going to need that. You're going to need to create an email buyers list. You need somewhere, somewhere online, for a buyer to opt in and give you their email address.

So to do that, to build a list of investor cash buyers, there are few ways to go about it. And these are some of the ones that are working the best for us right now. number one is Facebook. Okay? The way that we do it is not free, but it's not expensive either. Every time you get a property under contract, post it to Facebook. We post it to Facebook, and they have a little option there now when you make a post that you can boost that post and that gives that post more exposure. And then you can go in and kind of focus in on who actually sees it by selecting a certain demographic that you feel.

there that would be, that would have demand for that property. I mean, you can pick the area. So if say you picked Columbus, Ohio, and that would be one of the criteria. And you can type in something like as specific as, say, fix and flipper. And then all the, anyone that has fix and flipper or fix and flipping or wholesaling as somewhere on their Facebook page and lives in Columbus, Ohio will come up and it'll show you. I mean, there could be 8,000, 9,000. people that you could go and expose your property to right there, that your property would come up in

their news feed. And then just make sure that you put, you include the domain name of your landing page in that little post. And boom. I mean, you can create a very targeted buyers list this way. And we do it. We do it with every single property that we have. It's just part of our checklist.

It goes on to Facebook. We'll boost it for 50 bucks, 100 bucks. It'll get exposed to anywhere from 3,000, 5,000, 8,000. thousand people that are very specific, that we're likely to be looking what we're looking for. And we build a very big targeted buyers list that way, very quickly as well. And it costs a little money. Yeah, sure, but it's a cost of doing business. And it's not really what it costs you that you want to focus on.

It's what it's going to make you is where your focus should be placed. All right? So Facebook is one way we're building a buyer's list really quickly. Number two is through direct mail. And specifically, if you have access to the multiple listing, service, of which each and every one of you should, whether you're an agent or not, because you should have an agent on your team. But you can go into the multiple listing service.

You can search sold properties, search, say, the last six months. And a part of that search criteria of the sold properties, one of those options is the loan type of how that transaction was closed on the multiple listing service. And you can go to that field and instead of saying like first trust deed or seller financing, select the option all cash, and that's going to pull up all of the cash transactions in that zip code in the last, or in that area however you chose,

in the last six months. And then once you have that list, there's a little button there right there titled. It's going to be different on every multiple listing service, but there's typically a feature of where you can plot all of those transactions out on a map. So you click the button map or map it, I think is the one that ours has.

And that's going to show you, that entire list of transactions displayed on a map. And you can very easily see it in a very visual way where the hot markets are, where the hot zip codes are, where the hot neighborhoods are because you'll see this little cluster of all these little pinpoints.

And then you can kind of narrow down that list as our MLS has a little circle feature so you can draw a circle around that area and then that reduces the size of your list. And then you can export that list. Now, from that list, what we're doing is, we take that list and we've hired a virtual assistant. Just go if you go over to Odesk and real estate research,

I think it was the two keywords that we put in. And we hired a VA and she's taken that list. And she goes and searches title on each one of those properties and then data entries the buyer or excuse me, the owner's information into a spreadsheet for us and sends it back to us. And boom. it's a really slick way of doing that. Now, it's not going to be every cash transactions.

It's just going to be the cash transactions that happened over the multiple listing service. And the reason I like those, because people that pay all cash, investors that buy properties on the multiple listing service, typically I've found that things tend to be the ones that like to choose the path of least resistance. And they're also ones that are a little bit more conditioned to paying more for property because multiple listing service is kind of a retail. sale marketplace. So if they're buying all cash for properties on the multiple listing service, you know, they might be some of your better buyers or the ones that are not going to haggle with you or negotiate with you as much and they'd be more receptive to a higher price point than say your off-market

type buyers. Okay. So I really like that strategy. And, you know, hire a VA to do all that heavy lifting for you. But it's a really cool way to get a list. And so now you've got this cash buyers list that are addresses and then you send them direct mail, now you send them direct mail driving them to your website to opt in. You say like, hey, we just got this property located in this area for sale to view the details on this property

and more just like it, go to blah, blah, blah.com and they'll opt in. Okay, so that's the same way. Then the other thing that you can do is actually something similar at list source, list source.com, is search the hot zip codes, you know, like I explained in the first example, the way Joe McCall's been doing it. then part of your criteria would be under the property tab, choose the equity tab. Okay. And under the equity tab, you can select 91 to 100% equity. And then the sales date criteria of the last six months. And boom, you've likely got a really good cash buyers list.

I mean, it's not as exact as the multiple listing service approach, but it's a different list because it's not necessarily means that they're on the multiple listing service. But if someone has 91 to 100% equity in their property, and they purchased it in the last six months, they likely paid cash, or they paid it off in six months. And then just kind of do the same thing, mail to that list,

driving them to your landing page. That can be a letter, it can be a postcard, just give them something hot that they'd be interested in for a reason for them to go to your landing page and opt in. Okay?

And then the third thing, not quite as effective as it used to be, but still works for us, and we still do it. We're not like, we haven't excluded it from our list, but it used to work like five years ago. This was like a no-brainer.

But now it's a little different. I don't know why. I mean, I have my theories as to why, but it still works. It's not as well it used to, but it still works and it's still part of our marketing system or building our buyers list. It's our online classifieds.

So include your landing page domain every single time you post a property for sale to drive people to your website. And then you'll get a buyer's list. you'll get the buyers coming to your website that way. And then when we post also another way is when we post a property over at postlets, postlets.com is a site that it's owned by Zillow and you post your property there once and it syndicates it over, I don't know, 20, 30 different websites just like just with one entry. And what we do there is we always put the domain name of our landing page in the description of our property there.

But here's a little trick that we discovered. in the field that is provided at Postlets, they have a little field there to include a link to a virtual tour. Put your landing pages name in that field also. You see all the different websites that Postlets syndicates to, not all of them when you put your link in your property description,

it's not going to be a clickable link. It'll just be like text. So people have to copy and paste and they'll be able to click on it. But for all the websites that they syndicate, to where they have a virtual tour, that is a clickable link. And that'll take people to your landing page, okay? So there's a little tip there for that.

So that's how you build or that's how we're building the most effective ways. We're building our email buyer's list and how we continue to build our email buyers list. And then every quarter or so, at least twice a year, send out a survey to that list, asking them what they're looking for. Like I said, we use survey monkey. Surveymonkey.com. Monkeysurveymonkey.com. And it's like I said, it's free.

And you get 100 responses for free. If you want more than that, it's a small upgrade and fee. And now you easily know what the buyers on your list are looking for, where their demand is. So you've defined your own little hot market in your little world of where the demand is, where your buyers list, where your buyers are looking for property. Now you can become the supply for your own internal list.

And you can become that supply. Okay, so those two strategies, they work very well. And I use them all the time a lot, actually recently. We've really picked up the marketing over here. However, though, before I make an official move into any market, before I take one step into a market, I always confirm with this third strategy. I won't make a move anymore until I get confirmation from this third strategy. and I'm going to share that with you in 30 seconds right after this. Does your money work for you as hard as you do for it?

If not, no worries. You do not have a money problem. You merely have an idea problem. We're cashflow savvy.com and we'd like to share a new idea with you around income real estate that can transform your financial future and accelerate its arrival. Go to cashflow savvy.com and download a free investors package. Cashflow savvy.com. not have a money problem, merely an idea problem.

Cashflow savvy.com. More ideas, less worries. Cashflow savvy.com. So I won't make a move into a new market. I won't spend a dime on marketing. In fact, I won't lift a finger until I get confirmation from this third strategy. What I do is I call my property managers in the area and I ask them these two questions. Number one, where could you use more rental units? Or in what areas do you have a tenant waiting list? I want to know where their demand is for rental units. Okay.

Number two is what's the lowest income neighborhood you can get to perform? The lowest income neighborhood you can get to perform. I really like the lower income neighborhoods without going into the war zones or dangerous parts of town. Just because there's typically a lot more transactions happening, more of transitional neighborhoods. It's first-time homeowners moving in, and then it's those first-time homeowners moving out and upgrading to a bigger house or a different area, a different neighborhood. And so they seem to be a little more active. There seems to be where a lot of the demand is.

We always like to look at properties under the median as low as we can go without getting too dangerous or crazy. So we like to look at those lower neighborhoods because that's where most of the demand is, is for the cheaper homes. And so we ask the property manager those two questions. we want to know where could you use more rental units and what's the lowest income neighborhood that you can get to perform.

When I say perform, I mean where you can get a tenant in there and you're not going to have any problem collect in the rent. Okay, so those are the two things I'm looking for. And then I take the answers from our property managers and I bounce their answers off of what I found from using the first two strategies I went over. And then, wherever I find overlap,

wherever I find a match, that's where I mark it to. You see, by doing so, I know I've got strong cash buyers looking for properties in those areas, or I've got strong investor buyer demand. As well, I know that if I should get stuck with a property, if I get stuck, I know I can hold it and rent it relatively easily based off the property manager shared with me.

And I can hold it until I do find a buyer for it. Or I just might want to actually hold on to it myself. If I come across something really good, so I know it's going to rent, and likely when I get ready to sell it, I will be able to sell it if I wanted to. And as well, if I should turnkey that property through my cash flow savvy business,

I know my clients will receive a solid investment-grade property that they can hold for cash flow and likely sell should they need to liquidate at any point. So in a nutshell, by incorporating this third technique, by polling the property managers and then bouncing that off of all the research that you found online, What you do is you mitigate a significant portion of the risk that a company is investing in real estate. It kind of gives you a plan B.

So those are the three hot tips on how to find hot markets. All righty. Now, all Amazon.com gift cards for the month of November that were claimed have been sent. And I got confirmation via email that they were all received and open. And I just wanted to say thank you all so much for participating in November's back to basics month. and thank you all for your reviews. Thanks for sharing your feedback. I really, really appreciate it.

I mean, it's because of you that I am here. Because without you, I wouldn't be here. So just thank you. Thank you so much. You all help me keep the lights on. You keep me motivated. I love hearing your stories. You keep me inspired.

And it's just really, really fun to watch you all succeed. You guys are great. So stay tuned. We will do another themed giveaway again soon. It was very popular. So we'll do that again. All righty. So now, if you're just getting started investing in real estate,

rewinding back to the beginning of November and listening to all of November's episodes would be a great place for you to start. And, you know, I'm just really glad that you're all here. I know you all have several options for your real estate investing education, and I'm honored that you've chosen this show to be one of them. So the slogan for December is, bears hibernate, deals don't.

Don't sleep on one of the busiest times of the year. Keep your lead generation systems running throughout the winter, and you're going to come up smelling like a rose in the spring. Got it? All righty, so that's it for today. I will see you this Thursday for another compelling episode of third degree Thursday. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing,

the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terry O. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.