This document outlines a process for narrowing down investment opportunities in the multi-family real estate market. It recommends starting by identifying states and counties experiencing population and job growth using Census and Bureau of Labor Statistics data. The next steps involve analyzing specific cities and neighborhoods to find areas with growing employment, stable crime rates, and favorable market indicators like rent and vacancy trends. The goal is to systematically research demographics, market reports, planning documents and local news to select high-growth neighborhoods within cities situated in expanding states and counties.
How to Narrow your Real Estate Investment Universe by Jon Strishak
1. Multi-Family Investor
Collective (MFIC)
Market Research:
Narrowing Your Investment Universe
February 4, 2009
2. Agenda
I. Brief Prior Meeting Review & New Member Intros
II. MF Investment Process
Narrowing Your Investment Universe
III. State & County Identification
IV. City Selection
V. Neighborhood Analysis
VI. Summary
VII. Open discussion & Concluding Statements
3. I. Review of Prior Meeting &
New Member Intros
Review of Prior Meeting:
Prepare Yourself for Multi-Family Investment Success
New Member Intros
Investment experience
Why real estate investing?
Short-term goal
Something interesting about you
Goal: ID one person who you may be able to assist.
4. II. Multi-Family Investment Process
Phase Investment Process
PREPARATION 1. Prepare Yourself for Multi-Family Investment Success
2. Market Research: Narrowing Your Investment Universe
3. Building & Managing Your Investment Team
BUY RIGHT 4. Mastering Multi-Family Investment Analysis:
The Properties’ First Hurdle
5. Offer & Negotiations: Getting to Yes
6. Due Diligence: Verify—Do I Really Have a Good Deal?
MANAGE RIGHT 7. Writing an Investment Management Plan: The Roadmap
8. Executing Your Investment Management Plan
9. Value Add: Practical Ways to Increase Property Value
SELL RIGHT 10. Sell Right: Preparing Your Property to Sell For Top Dollar
5. III. State & County Identification
Population Growth, 1st Predictor of a Growing Market
Invest Where People Are or Will Be
US Census Bureau: Population Projections
http://factfinder.census.gov
• Decennial Census
• American Community Survey
• Population Estimates Program
• Economic Census
• Annual Economic Surveys
6. III. State & County Identification
Population Growth, 1st Predictor of a Growing Market
Top 10 States
Ranked by Growth
Rate
2000 to 2030
4. Texas
3. Florida
7. North Carolina
8. Georgia
1. Nevada
9. Washington
10. Oregon
2. Arizona
5. Utah
6. Idaho
Source: US Census
7. III. State & County Identification
Population Growth, 1st Predictor of a Growing Market
Top 10 States
Ranked by Growth
Rate
2000 to 2030
4. Texas
3. Florida
7. North Carolina
8. Georgia
1. Nevada
9. Washington
10. Oregon
2. Arizona
5. Utah
6. Idaho
Source: US Census
8. III. State & County Identification
Job Growth, 2nd Predictor of a Growing Market
Invest Where the Jobs Are or Will Be
US Bureau of Labor Statistics: Available by national/state/county/occupation
http://www.bls.gov
9. III. State & County
Job Growth: Invest Where Jobs Are/Will Be
Thousands of counties are now experiencing job growth…
Example: Travis County (Austin), TX
Positive Trend:
Maricopa County (Phoenix), AZ Dallas County (Dallas), TX Dade County (Miami), FL
Negative Trend:
Mohave County (Lake Havasu City), AZ Hopkins County (Sulphur Springs), TX Brevard County (Cape Canaveral), FL
Grand Canyon Dairy Capital of Texas “Space Coast” for JFK Space Center
10. IV. City (MSA) Selection
Review City/MSA multi-family indicators
Review:
Institutional
● Available Property Types Market Reports
City Websites
● Vacancy Trends
Masterplan
● Employment Trends Local News & Media
● Construction Trends
● Rent Trends
● Sales Trends
Exercise: Institutional Marketing Reports
11. V. Neighborhood Analysis
Narrow down your investment universe to high growth neighborhoods.
Ensure neighborhood is stable or improving. Look for growth drivers
● Development Review:
Incentives City Websites
● City Planning & Masterplan
Path of Growth Local News & Media
Police Department Websites
● Crime Stats & Trends
Zip Code Analysis Websites
● Transportation
● Employment Diversity /
Sources
● Tenant Profile
12. V. Neighborhood Analysis
Narrow down your investment universe to high growth neighborhoods.
Ensure neighborhood is stable or improving. Look for growth drivers
● Development
Incentives
● City Planning &
Path of Growth
● Crime Stats & Trends
● Transportation
● Employment Diversity /
Sources
● Tenant Profile
13. VI. Putting it All Together:
Narrowing Your Investment Universe
NEIGHBORHOOD ANALYSIS
Review local media sources to narrow down your investment universe to high growth neighborhoods.
Ensure neighborhood is stable or improving. Look for growth drivers.
● Housing Composition ● City Planning/Path of Growth ● Crime Stats & Trends
● Transportation ● Employment Div / Sources ● Tenant Profile
CITY SELECTION
Review institutional market reports to ensure market indicators are favorable.
● Available Property Types ● Vacancy Trends ● Employment Trends
● Construction Trends ● Rent Trends ● Sales Trends
STATE & COUNTY IDENTIFICATION
Review US Census demographic data and identify states that will experience population growth.
.
Review US Bureau of Labor Statistics and, within the states identified, select counties that will
experience significant job growth.
● Population Growth ● Job Growth
MARKET SELECTION PROCESS
14. VII. Open Discussion &
Concluding Statements
Questions?
Handouts
Online Sources of FREE Institutional Research Reports
Deal X-Ray
Next meeting…
Building & Managing Your Investment Team
Guest Speaker: Chad Hill, Dallas/Ft Worth GMAC REO Team
15. Extra Slides:
Determinants of Property Value
The “DUST” framework.
Determinant Importance
D emand 2
U tility 1
S carcity 3
T ransferability 4