When it comes to real estate investing, you definitely don’t want to put the cart before the horse. As an investor, you’re putting hard-earned money (and sometimes major big bucks from private lenders) into deals, so you need to know what you’re getting into. Investing in real estate shouldn’t be a leap of faith. You need to know your market and past trends before you make a move.
Education is power, and when it comes to real estate investing, it’s the key to getting in front of private investors and closing deals.
Hey Moguls, I’m investor and educator Chris Urso. It’s been a while since I’ve been ‘round these parts, so I’d like to share a little about myself and my REI experience before we dive into today’s lesson.
Get Reacquainted with Chris
I founded URS Capital Partners and Elite Apartment Coaching to help people invest in multi-family real estate. My real estate investment company, URS Capital Partners, has over $70M of acquisitions, over 1,300 units throughout the Midwest and Southeast and has raised over $22M in private capital.
Through my unique consulting platform, Elite Apartment Coaching, we’re able to help private real estate investors significantly increase their net worth while protecting their nest egg. I’ve also created a guide with everything I wished I knew when I was first starting out as an investor called “Smart Investors Guide to Investing in Apartments.”
So, take it from me, the best investor is an educated investor. And educated investors – over time – can build wealth, preserve their capital and even create family legacies investing in multi-family real estate.
But how do we know what markets to invest in for multi-family real estate? What do we even look for to know whether a market makes sense for our private lenders?
Well, for that, let’s get into today’s lesson with these 4 things to consider when selecting your market for deals…
Look for the Big 4
1. Jobs
Check out your market to find out where the jobs are coming from, what the unemployment rate is, what industries are popular in that area and if there is job growth.
You also want to understand how active the local government is in creating new jobs.
2. Population Trends
Focus your market review, get some roots in the ground, and then expand and build your network. You want to focus on specific regions, not necessarily cities or states. Find out if your areas of interest are growing or shrinking, and be sure you see retention of younger demographics.
You don’t need to target the hottest, trendiest areas, but you DO need to focus on areas that show growth and development.
3. Local Government
Local government involvement and support in your target market is key.
You’ll need to learn about the landlord-tenant laws and about the legal challenges that your private investors might face. The more knowledge you (and they) have upfront, the better you and your investors will be.
4. Hit the Rewind Button
If you want to know where you’re going, you need to know where you’ve come from. Just makes sense, right?
So take the time to go back in time, and find out how your markets performed during the past recession. Understand how hard they were hit, and what growth and rebuilding challenges they face.
You Gotta Know Your Stuff
Reviewing and researching your market is all about making fundamentally sound investment decisions, and to do that, you need to take the “top-down” approach.
Invest your money on smaller deals in stable markets every day and twice on Sunday. Bigger deals in unstable markets means big trouble.
Talk to Me
Got any questions about today’s lesson or apartment investing in general? Hit me up down below.
Know your markets like the back of your hand.
Focus on secondary and tertiary markets.
Choose markets that investors WANT to be in.
Create longevity in this business by educating yourself.
Use what you know so investors can understand why you’re going after a specific market.
Always continue your education.
Christopher Urso
is the founder of URS Capital Partners and National REIS. Chris has been investing in real estate since 2001. Over the years he has been involved in all aspects of real estate, from single-family fix and flips, buy and hold cash flow houses, and finally to apartment buildings. His real estate investment career only took off when he purchased his first apartment building 3.5 years ago. He now controls over $15,000,000 of apartments and has raised over $8,000,000 of private money in just over 3 years. He now structures investment partnerships to acquire large apartment complexes and also private coaches investors helping them purchase their own apartment buildings.