HOW TO ANALYZE REAL ESTATE MARKETS BEFORE YOU INVEST IN THEM

Hey, what’s up everybody? Welcome back to my YouTube channel. I am Justin Colby. And on this YouTube channel, I talk all things business, real estate, and entrepreneurship. Now on this specific episode, we are going to be going over how to analyze markets before you start investing in it. Now, if you liked this video, and you want to just show me a little bit of appreciation, make sure you are smashing the like button anytime you’re watching my video. And if you have not yet, make sure you subscribe as the YouTube Gods highly like when I have more and more subscribers. And then lastly, turn on the notification bell. So you know when I drop all three videos each and every week. So let’s get into this training. Alright, so the first thing that I want to bring up when how to analyze a market of whether it would be a good market to invest in is this. First of all, what is your investing strategy. Now for those that are wholesalers and I’m a predominant wholesaler versus those that are buying and holding, which I also do, I do roughly 20 wholesale deals a month, where I buy anywhere from two to four homes to keep in portfolio. Now for me, I need to make sure that both business models will work in any market I’m looking to invest in now if you are someone who’s only going to be doing wholesaling, then you really need to focus on your population, you want to make sure that there’s enough volume of households to actually be able to do a volume of wholesaling. If you’re only going to be flipping you would likely want to make sure very similar things in terms of population flippers might also want to look at things such as New builds, are there is there growth opportunity are developers they’re growing homes, because as a flipper, you’re tend to buy properties that are built in the 1930s or 40s or 50s, or even older, and you’re making the home like new. So for flippers, you actually might want to make sure that there’s going to be more development opportunity, are there more strip malls going up is the population growing in our developers, residential developers, they’re actually building out more new homes, that would make a lot of sense. And for us buy and hold individuals, the landlords of us, I am actually really more focused on making sure there’s industry in the markets. Now for me specifically, I actually do all three, when I’m analyzing markets, and what market I should be going to. For me, I want to make sure all three have the characteristics I’m looking at is I will wholesale in all the markets, I will flip in all the markets and I will buy and hold in all of the markets that I am actually active in now for the next part of this is let’s kind of break down some of these criteria, because many of you new investors likely are just going to be getting into wholesaling. And so I want to give you my personal criteria of essentially what I do to kind of pick a market. So I can go spend money time energy activity in a market that’s worth my while. First, I know this is gonna sound a little crazy. But it is not whether there’s unemployment, high unemployment or good employment, the first thing I’m looking at, is there are a major sports team in the city. And for some cities, the answer is going to be no. But the next layer is that is there a major university, you see my philosophy is if there’s a major sports team, there tends to be some economic flow money flows, where sports teams go in for a lot of other places, such as let’s just use Nebraska, for example, where the Nebraska Huskers is such a big draw that there’s you could consider them a pro sports team. And so I look at markets to make sure that there’s some level of sports team and or some level of major major university like a University of Nebraska. So for example, one of the major markets that I’m actually in aside from Phoenix is actually Kansas City. And it really fulfills that not only is there great colleges there, but they also have the Oklahoma City Thunder, right and so they absolutely have the ability for both the college’s and sports team. Now the next major criteria I would advise you guys on is going to be the price point of the markets when doing research. As I’ve mentioned, you want to make sure there could be growth and yes, you want to make sure that there is unemployment, high unemployment or low unemployment, but I actually want to make sure that you are looking at the price point for us wholesalers. We really want to Being a price point that can create two exit strategies for our buyers, we want to make sure our buyers can either flip the property rehabbed and flip it, or we want to make sure that they can either or also buying hold it, keep it as a landlord. And so, for me, I want to make sure I’m well below the $300,000 price point. Now, why do I choose that number, and here’s the reason is, nationally, the median price point is roughly about $325,000, as a moment in time, and I want to have roughly a 30 or 40% discount on that number. So if I do that math, I really, really, really want to be under roughly 200,000. But I’m willing to be under 300,000, depending upon the actual city. So in a state like Arizona, or specifically Phoenix, I’m okay being under 300,000. When I move into Oklahoma City, and the price points are much lower, I’m really only focusing under 200,000. Either way, I want to make sure I’m at least 30, or 40%. Under the median price point, that is my second criteria that I’m really going to look at. I know the first one’s a little funny when it comes to big sports teams are big colleges. But the second one makes a lot more financial sense. Because you really have two great exit strategies, whether it’s going to be a flip property or buying old property, whether you yourself are going to buy it or if you’re wholesaling, you have those type of buyers. Now here’s the third thing that I actually look at one of the third pillars, I want to make sure that there’s potentially some sort of military base nearby, for the same reason I point out the actual sports teams is because they will have a constant need for housing. And it will have a constant need for continuous housing, meaning people come and go out of these military bases. And so they don’t tend to grow massively larger each and every year. But they have a consistent need for housing. And so I really want to see if there’s any level of military base in the area in the cities that I’m looking at. And so for example, Phoenix, there is a military base in Oklahoma, there are several military bases. And so those are the two I’m going to highlight for this training. But that’s another category that I want to be looking at to make sure that there is some level of military base, the next is going to be industry, what major industries are there, and what major industries could be going there, you’ll see that a lot of industries are leaving, specifically California, going into middle America, whether it be Las Vegas, which is not Middle America, but going going east from California, whether it be Las Vegas, whether it be Texas, whether it be Arizona, or other states, such as Alabama, North Carolina, that you can see car industries going tech industries going and what industries could be moving into the market that you’re looking at. And so I want to know what the current industry is within that area, but also what could be moving in, if anything. So I take a look at what type of industries preferably, I have two or three, or at least multiple major industries in the market that I’m targeting. And lastly, guys, I really want to look at the population, the population is something that I would say I don’t want to go into a major market for less than 100,000. Ideally, that market just won’t have enough volume, there’s not enough people living there to do the volume of transactions. Now, if you are someone only looking to buy rentals would 100,000 fit? Absolutely. That is plenty of residences for you to actually buy plenty of rentals. But ultimately, I really want much larger cities. It doesn’t have to be like Phoenix that has 7 million people. I think that’s the number, but I want something that has a higher volume of population. Now guys, if you’re liking what you’re hearing here, make sure you’re smashing the like button, make sure you subscribe to my channel and you turn on the notifications. Don’t forget to smash the like button. And lastly, lastly, lastly, and I know there’s a lot of gurus out there that are going to tell me that should be number one. But I want to check out the unemployment or employment rate. It is very easy to check out obviously I don’t want it to be high unemployment. But I really look at all the other characteristics as priority over unemployment. And don’t ask me why more of a kind of a gut feeling there. But listen, take a look at unemployment and the rate of unemployment. It does play a factor but for me, quite honestly, I want to make sure there’s major sports teams, multiple major industries there or at least one really major industry but even that I don’t love because if that major industry decides to move, you’re stuck, right? So I want to have multiple major industries. I want to make sure there’s colleges sports teams, military bases, I want to make sure the population well above 100,000 and I want to make sure this could be number one, I want to make sure that the price point the median price point of that city is at least 30 or 40% off of the national median price point. And if all those come together, you have a great market and encourage you to start investing in that market. Alright guys, that is all I have for this YouTube video. Again, make sure you are subscribed, smash that like button, and I’ll see you on the next video. Peace.