Are you interested in branching out from investing in your local area to doing deals remotely in another city… but you’re not sure which remote city?
Hey Moguls, Chris Chico here, and I get a lot of questions related to this about market evaluation…
So in my lesson today, I want to share with you 2 simple yet specific criteria you should use to evaluate a market, to help you figure out if it’s valid or not…
Meaning, whether you should or shouldn’t invest there.
Investor Buyers
So, one of the first things I look into is how many buyers are in a particular market and how many of them are actively buying properties.
Personally, I like to use ListSource for my searches. But there others search sites you could use, like RealQuest, for example.
So, we search online for these details:
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property types: single family, duplex, triplex, quad
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how many buyers bought properties in the past 4-6 months (search by sale date)
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minimum of 300 buyers is okay, but prefer 500+
Now this is important… these numbers do depend on the size of the area.
What do I mean?
If you’re looking at Texas, for example, you're going to have a lot more buyers there simply because the sheer size of most of those counties = BIG. (Everything is bigger in Texas as the saying goes!)
But, you just want to see a bare minimum number of investor buyers no matter what.
And who are your investor buyers?
Absentee owners.
So you’re looking for absentee owners who bought the property in the past 4-6 months—that's who you're going after.
Seller Records
If you’ve found a market that has a good number of buyers… you also need to make sure that you have enough sellers to work with in the particular area you’re evaluating.
So you're looking for people, with the same criteria as the buyers, but with one difference: You want people who have owned a property for 10 years or more.
Let’s say your search for sellers turns up 4,000 records. That’s great!
But what if it only shows 100-200?
Well, that means one of two things:
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If you have very low numbers, it typically means there's a problem with the county and it’s NOT a viable market for investing
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Or, it means that the county simply doesn’t have accurate data
Pro Tip: You may be able to go directly to the public records department and see if they can get accurate data for you. But, I’ve found usually that's a bit of a pain and they want to charge you a lot of money for it. So, it just might not be worth it. Maybe just look elsewhere.
Anyway…
I like to see 4,000 or more available sellers in a particular market.
Why?
Because that means I can send direct mail to those 4,000 people and likely see good returns. That’s why I like to see 4,000 records at a minimum.
And, if I get good numbers from the absentee owners list, I usually also look into evictions and probate too.
Word of Caution: Be careful with higher-priced markets like California or New York. I found that you do have to spend a lot more money in marketing in order to get more leads because the response rates are not as high. That's not to say that you're not going to be able to do deals in those markets, but it is more difficult and not for a newer investor.
See… told you it was simple but specific. Now, if you’re ready, go yourself find a great virtual market!
Comments, Questions
What do you look for in an area before you invest remotely? Share below.
Talk with other investors about how they choose virtual markets to invest in—perhaps they have more helpful criteria.
Make sure there are at minimum 300 active buyers in a market before you being virtual deals there.
Look for at least 4,000 seller records in an area to consider it for virtual investing.
Cris Chico
is a successful real estate investor in Florida who specializes in wholesaling in local and long distance markets. Over the last two years he successfully flipped 116 properties and generated over $1,452,108 in profits. He rarely personally inspects any of the properties that he flips or meets with any buyers or sellers. In fact, most of the markets that he operates are thousands of miles away.