Epic Real Estate Investing - 3 Hot Ways to Find Hot Markets | 973

Episode Date: March 30, 2020

This Monday, Matt explains 3 hot strategies for finding the hottest markets that will bring your real estate investing to the next level! Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-Aase.com.

Here's Matt. Hey, welcome to the Epic Real Estate Investing Show. Today, got three hot strategies for finding hot markets for you. And so what's a hot market, though? What defines a hot market? Well, a hot market is pretty much wherever the demand is. And you want to be the supply for that demand. And when you're the supply and the demand is high, you get to charge more.

You get to make more money. and by demand, I mean a large group of people that want what's there, and you want to be the person who can provide what they want. And there are different ways to identify the demand, and I'm going to go over three of those, three of my favorites, okay? But first things first, supply and demand. Now, what I used to do was I would pick a market based on a hunch or on information from various sources. then I would go in and I'd pull a list of absentee owners. Those are people who own properties in the area but don't actually live in those properties. So they're likely rental properties.

That's the assumption. Then I would search for those who purchased those properties 20 years ago or longer. What that basically would suggest is there's a more than likely chance that there's some equity in those properties. I mean, they've owned them for a long time, 20 plus years. They've been paying them down, so there's probably equity. So that would be my list. Absentee owners who were likely to have a lot of equity in their property and then I would mail to them. Those would be my sellers.

And so these would hopefully be this applied to my demand. Now, for me to build my own demand or to identify who would most likely want what I find, I would then go and pull a second list of absentee owners in that same area who have purchased their property and say just the last six months. or so, maybe go to 12 months, but people that purchased recently. The idea being that they were investor buyers on that list, and these would most likely be a great buyer's list or a great group of people for the sellers that I just mailed to. So as soon as I got a property under contract with one of my sellers, I would then mail a flyer to the buyer's list of that area that I pulled.

So that's the idea. And the logic is there. It's worked out well. It's worked out well enough. But I recently changed things the way I'm doing it. Actually, I changed it a few years ago. And it was based on a conversation that I had with my good friend, Mr. Joe McCall. And he had showed me a little bit of a shortcut to do something very similar over at listsource.com, something that's really, really useful.

And what he does, it's almost the exact same thing that I do. but he kind of does it in reverse, and he's figured out this loophole at List Source on how to actually make that happen, how to find the hot market. And it's like this. Okay, so this is number one. You want to find the hot zip codes, right?

You've got zip codes in your area. You want to find out which ones are hot. And basically it works like this. When he pulls the sales from the last six months to identify where the demand is, he then goes through the steps of purchasing that list from list source. But just before you purchase,

this is the loophole at listsource.com, just before you purchase the list, list source gives you the option to purchase a partial list. Whatever you pulled up and you can just say, I don't want all of these names, I just want partial list of these names.

And so when you click that option, it allows you to sort that list into a smaller partial list, and you can sort it by any criteria that you want. And one of the ways that you can do this is you can sort by zip code, of which divides the number of transactions into the correlate zip codes. So if you're looking for all the recent sales, and you found all the people that just recently

purchased property, and now you can divide it by zip codes, you can find out where most of those purchases were, right? So the zip codes with the most transactions that have the most records in them represent the hottest zip codes. Then you can go ahead and export that list. and now you can go and start choosing your mailing list or managing your marketing around those zip codes. Because you can go then take the top 30 or 40 or 50% of all the sales in that area. So you have the top 30, 40, 50% of those zip codes that have the greatest results. And now you just go back and create your motivated seller list from there. And you can use the same criteria that I just used.

Now you can do that the same thing going back 20 years. But you're just kind of doing it backwards. So you find the buyers list first to discover where the hot zip codes are and then go back and look for the sellers list using those hot zip codes. Got it? So, thanks to Mr. Joe McCall for that tip. I've used it ever since. He must have been up late one night with absolutely nothing to do because it's not, it wasn't

an easy thing for him to discover unless he just accidentally stumbled upon it, which is probably possible. But it's turned out to be just a really big time saver for me. And this particular tip, it creates a very focused, cost-effective lead generation, or or marketing system. Okay? So that's number one. Find the hot zip codes.

Number two, the second way is ask. Yeah, ask buyers where they're buying. However, that could take a really long time to do if you just went around and surveyed all the buyers. I mean, you could go down to the courthouse steps and ask each person that was bidding on property there, you know, where are you looking for property?

Or you could go to your real estate investor club meetings and ask them where they are buying properties. but from my perspective, that's too much time. That's too time consuming. It's way too difficult. And so I'm going to suggest you consider a different way. Now, to do this, you kind of have to have a buyer's list already. But it doesn't have to be a big one for you to get really good data.

And so what we do here now is every quarter or so we send out an electronic survey to our email list, our buyers list via email, using SurveyMonkey.com. And up to a certain number, it's free to use. So it's a really useful tool. And we use that to find out where our existing buyers are looking for properties. So that reveals to us based on the answers from our list that tells us where the demand would be. Because that's where the demand is coming from, our current list of buyers, the people we already have, the people that we already know, the people that we've already done business with. So no need to go out and find new ones if we can just find out where our current list of buyers are looking for properties.

And then we can go and create the supply there. We can market to those areas and create the supply for our existing buyers. So that's number two. Ask, right? A novel idea. Number three, consult with property managers. You know, property managers, they're really the hub of our business because their clients are real estate investors.

And they buy and sell and their clients buy and sell. So they've always got their finger really on the pulse of the market when it comes to investments. So before I make an official move into any market, I always confirm with this right here, this third strategy. And what I do is I call my property managers in the area. And I ask them these two questions.

One, where could you use more rental units? Or maybe in what areas do you have a tenant waiting list? I want to know where their demand is for rental units. So that's first. Number two, what is the lowest income neighborhood? you can get to perform. I really like the lower income neighborhoods without going into war zones

or dangerous parts of town, of course. But I like the lower income neighborhoods because there's typically more transactions happening there. There's a lot of activity there on both sides, a lot of buying, a lot of selling. You've got first-time homebuyers moving in, and then it's the first-time homeowners moving out and upgrading to a bigger house or a different neighborhood.

It just seems to be a lot more activity and where a lot of the demand is. in those areas. So we ask the property managers those two questions. And we want to know where could you use more rental units and what is the lowest income neighborhood that you can get to perform. And when I say perform, what I mean is that where you can get a tenant in there and you're not going to have any extraordinary problem collecting the rent.

So those are the two things I'm always looking for to build my portfolio. And the property managers, that's the source of the information. So what I do is I take the answers from our property managers. and I bounced their answers off of what I found from using the first two strategies I went over. So really, number three is my number one. It's where I start, but just number one is my favorite way to confirm, if that makes sense. So I take those answers from our property managers, and I bounce their answers off of what I just found from using those other two strategies.

And wherever I find overlap, that's where I mark it to. You see, by doing that, I know I've got strong cash buyers looking for properties in those areas, or I've got strong investor buyer demand. Further, if I should get stuck with a property and I'm unable to sell it, I know I can hold it and rent it relatively easily based on what the property manager shared with me. I can hold it until I do find a buyer for it or like I'm more inclined to do, I just might actually want to and will hold it for myself.

And 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 as long as they want, or they can sell it should they need to liquidate it at any point. So in a nutshell, by incorporating this third technique, by pulling 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 accompanies investing in real estate.

I mean, you can look at it as giving you a plan B, or you can look at it as giving you a safety net, Yeah, it's a backup plan. Basically, you know, if you can't sell it, then you know you can rent it. And if you want to rent it, you know you can sell it anytime if should you need to. All righty, so number one is find the hot zip codes. I like to use that little list source hack. You'll probably find that just by searching YouTube for it.

I think there's four or five dozen people who have got that idea from Joe McCall and created their own video out of it. I think I just saw one recently by Max Maxwell. So you can research that and how to do that if you want to want to see the visuals. But that's a really slick one. Number two, ask. Ask your existing buyers where they are buying. And to make that really efficient, we use surveymonkey.com. And let's see, what else?

The third one is consult with your property managers, right? You can find all kinds of cool stuff online. The Internet has all kinds of great information, but I like to bounce the electronic source with a human being source and property managers, I think, are the best source out there for that type of information. The type of information that's going to help you eliminate or at very least mitigate a significant portion of your risk inside of your real estate. All righty?

So those are my three hottest tips on how to find the hottest markets. So that's it for today. God bless to your success. I'm Matt Terrio, living the dream. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. As low.

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