The Science of Flipping - How To Pick A Virtual Market
Episode Date: December 17, 2020So we've talked about opening a virtual real estate market in a previous episode, but what about picking a virtual market? Picking the market is such a key step in expanding into another market becaus...e you want to make sure you know what you're getting yourself into. Let's talk about picking a virtual real estate market.
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What is up, everybody? What is up? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And if this is your first time, head over to the scienceflipping.com. Check out all the free resources we have there tools, systems, strategy for your business to not only
scale, but to be incredibly profitable. So make sure you are paying close attention.
This episode is going to be all about when you're going into a new market,
what is the right population to call it a good viable market? It's something that a lot of people
are asking about because virtual wholesaling has become such a big topic these days. So
I decided to do an episode about what size is a good size for a virtual market? What are the
qualifications for a good virtual market? And let it rip. And so let's just start there. You know, what are some things I look
for? You know, why did I go to Oklahoma City? What were some reasonings behind there? Well,
first of all, I do like to go to markets where they have major sports teams or major colleges.
I start with that as kind of an indicator, right? Because that means there's a market. That means
people are, you know, living there. There's an economy there, but also there tends to be a good rental economy there, especially with the college argument.
Now, that's not the only thing I would be looking at. I also see if there's any type of military bases.
I check out unemployment rates in those cities.
But I do tend to like to look for markets with big universities or a university, you know, doesn't have to be massive, as well as some level of pro sports teams.
If they have all three, like the major three, baseball, football and basketball, even better.
But if even if they have one or two, I still tend to look at that, right? Now, from there, I want to make sure that the major
market has at least a minimum of 500,000 people in it, okay? 500,000 for the major market. Now,
Oklahoma City obviously has that. But as I've mentioned to most of you on these podcasts,
or if you've ever heard me live, is I also am going to the surrounding cities
of Oklahoma city, right? So cities like Moore and Yukon and others all the way up to Lawton,
North Oklahoma, which has a military base, right? And so I'm playing that roughly a hundred or I'm
sorry, a mile, sorry. I'm playing that roughly an hour and a half drive as kind of the barometer of the
towns that I want to be doing deals in. So then let's start talking about some of these smaller
towns that might have less than 500,000. Well, where's the limit there, right? What's the right
population level for some of these smaller towns? And I would tell you, it is about 50,000.
If there are 50,000 people in that market, you probably have the right market that you would
be able to move it as a wholesaler. Now, obviously, if you're using different exit strategies like
flipping and wholetailing and even buying and holding some of these parameters
don't mean as much, right? Because if you are going to buy and hold, then essentially you just
need to make sure that there's a good rental market, that there's a good employment ratio.
Um, and you know, that's pretty simple to do based around Zillow and rent-o-meter and obviously any
of the government sites that'll show you the
employment ratio. Now, if you're looking to wholesale and wholetail and flip,
the barometer really needs to be 50,000 people as a population or town because that's right about
the right population for there to be local investors looking to flip some properties or even keep some for their own portfolio.
In those markets, I highly leverage Zillow and Realtors because Realtors really are the
only ones moving needles.
Now, a third marker for what I like to look at to make a decision of what are the barometers
of a good virtual market is how many flippers. uh, how I do that as I go to prop stream. So if you just go to tsofdata.com,
they'll give you a free seven days of prop stream, go to tsofdata.com. They will give you a free
seven days of prop stream. I go to prop stream. Um, and I look up flippers in that market. And
from there, if there's anywhere from 10 to 20,
obviously the more the better. If there's 10 to 20, that is a viable market. And I believe we
can go ahead and move forward. So if you are going to be spending money in marketing, those
are the criteria that I would like for me to spend money. Now, the other thing is I'm also
trying to network with other individuals to see if I can get some co-wholesales done pretty quickly, as well as
building a buyer's list. So I want to know in these groups on Facebook that there's good engagement
around the city. So Oklahoma City, the first thing I did is how many Facebook groups are there about
Oklahoma City real estate? And there was several, there was more than a handful. Then I went into some of the national groups and started
searching the term Oklahoma City. And there was a lot of conversation, a lot of deal flow about
Oklahoma City. So I said, I like that market because people are moving and shaking in that
market. Things are happening.
And so that is another way I choose my market is to make sure that that is happening.
Now, for major cities like Phoenix, Atlanta, Miami, you know, that is a no brainer.
But when you're thinking about going into a market like middle America, maybe is a second tier market, like in Oklahoma City or Tulsa, Oklahoma or Kansas City or whatever,
then I want to make sure that there's good conversation around that city. I want to make
sure there's deal flow. I want to make sure there's interest in buyers. And I immediately
start talking to those individuals about that. And besides those markers, if any of those don't fit, to put something in priority for me, I would always want to make sure that I have a viable market with population.
That is first, right?
500,000 people minimum in the major market, 50,000 in the sub markets. And then my first thing is,
is there some level of a sports team? Because if there is, that means smarter people than I
decided this would be a good market because people would come watch sports. The second thing,
if there's not, is I want to see if there's a major college. And if so, those are the first two things I look
at is population, sports team, college. From there, obviously unemployment and any type of
industry that might be a big industry in the area, such as tech industries, car industries,
or otherwise, I want to make sure that there's something there. If you focus on those, you're
likely going to pick the right market. And now your key to your success is just take action. Action takers always win this game.
So now it's about you taking the proper action, sending out marketing, getting deals done,
networking with wholesalers and realtors to go get your first deal done in that market.
And hopefully that happens the first 30 days.
If you are looking for other free resources,
there is a youtubechannel.com forward slash Justin Colby.
I have daily videos go up on YouTube as well.
Hopefully this finds you well.
I will talk to you guys again here on the next podcast episode. Peace out.