You Have 24 Hours In A Potential Market. How to Use them Wisely.

As remote real estate investors, choosing a new market can be quite the process. Today we run the thought experiment on how we would spend our time if we only had 24 hours in a potential new market to research, analyze and assess the city.

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Transcript

 

Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.

 

Tom:

Greetings, and welcome to the remote real estate investor. On this episode, we're going to be talking about not being a remote investor temporarily and visiting the city. So the premise of this episode is going to be you have 24 hours to spend in a city that you're considering investing. What are you going to do? All right, let's do it.

 

Alright, so we have a fun episode today. But before we get into it, my name is Tom Schneider. And I am joined by

 

Emil:

Emil Shour

 

Michael:

and Michael Albaum.

 

Tom:

This episode is a fun episode. We are remote real estate investors. But we're going to take a look, sometimes it's you know, worth the exercise to check out a market that you're evaluating. And we're going to talk about how we would spend that time if we were choosing to go jump into a market and look at things.

 

So we have 24 hours is the rule of this episode. And we're going to talk about how we would spend that. So let's see what Emil, why don't you go ahead and lead us off in this conversation. And again, this is 24 hours to go visit a market. What are you going to do?

 

Emil:

Alright, so first thing I'm doing is meeting with the various people of my team, primarily property manager. So I think the premise here, Tom is I have not invested in this city before, right? So I'm a new investor, considering the city and I'm going to check it out, right? Or have I already invested here.

 

Tom:

That's right.

 

Emil:

And now I'm going to visit it,

 

Tom:

I'm dealer's choice for your case, we're going to have it so you are already invested. And for Michael, he is evaluating investing. So we're going to mix it up a little bit, and I gotta be omnipotent, and get to just kind of jump in and out wherever I want. So, okay.

 

Emil:

All right.

 

Michael:

Like it throws zingers in there.

 

Tom:

Exactly, yes.

 

Emil:

All right. So I actually had plans to go visit. So I've mentioned before I invest in St. Louis, I was planning on going to visit St. Louis, and then COVID hit and that's filled all those plans still on my to do list. But here's kind of my checklist of things to do when I go there. So I have a property manager that I like out there. But I would go and obviously meet face to face with my property manager always good to do you know, so far, it's only been talking on the phone and on zoom or whatever. But I want to get to know them meet the people on their team just put a face behind all the names. So that's, that's one of the things I'm doing.

 

I would also honestly, probably meet with one or two other property managers just to meet them. You know, we've talked about in the past, you know,

 

Tom:

You sneaky dog Emil!

 

Emil:

I just I know, I know, time and I'm just kidding. That's that is smart to do. Here's the thing, I'm not there all  the time. And we've talked about in the past, things happen with property managers, sometimes things work out, sometimes they don't, I'd rather be over prepared. I'm not going to switch obviously, because I like my property manager. It's not about that. It's a matter of just going and doing some extra research and talking to people in case that scenario plays out in the future. So I'm gonna go talk to maybe one or two other property managers that were on my list. That's fallbacks. Just another thing I'm going to do…

 

Tom:

Give them your buy box to you know, tentacles everywhere.

 

Emil:

Totally, totally underrated strategy to find properties is talking to PMs, and they bring you deals.

 

I would also the other thing, I would do it well, since I invest there, I'm obviously going to go check out the neighborhood that I invest in, I'm literally just going to rent a car and just drive around streets a street and I'm I'm gonna have a notepad with me, I'm gonna write down, what are the streets that are experiencing a lot of people improving the properties or the properties that are already improved. And maybe there's maybe there's some dilapidated homes, they're right, where you could potentially buy the worst property on a nice looking block. And then I'm also going to just know down like, what streets were just bad, right? Like, you know, there's some cities you invest in where they say it's very block block, note down those blocks that you want to avoid within those sub markets that you like. So that's another thing I'm doing.

 

Michael:

Emil, I'm curious, are you going with your agent or with your property manager literally just sneaking up and down every street in a particular area that that you're invested in?

 

Emil:

I'm probably going by myself, if I can get them to come along with me. I would love that. But I doubt that they have six hours out of their day or whatever it may be that I'm just cruising around to like, do this kind of research. So I'm planning on it being solo, I'd love for them to come. But I just don't know if that's realistic, you know,

 

Tom:

It's funny, there's like benefits on both sides to it, you know, like, you're just by yourself, like, you don't feel like you need to keep moving along to whatever you can kind of double click into whatever you want. But with an agent or with your PM, it's like, you know, little more insight.

 

Michael:

I want to echo that point, because I've done both it, it's so often like you with an agent. And if you know that, well, then it's kind of easy. Maybe you're friends with them. And you can just kind of have a very flowy conversation. But I know just like in my own head, sometimes I'll be driving and I want to see something. And that's where my focus is. And in my head, I'd be like, shut up, shut up, shut up, like, I got to focus on this thing. So if there's somebody else in the car with you, or somebody else there with you, I don't want to feel like I always have to be talking, I just want to sit there in silence and focus on whatever I'm trying to focus on. So bright, that can be a really nice thing to do solo.

 

Emil:

If I had a choice between pm and agent, I would go PM, just because they have to manage the thing, you know, like agents trying to sell you the thing. pm is trying to manage the thing. So there, they have a little bit more skin in the long term game. So I like the PMs perspective, a little bit more in that regard. And they may, you know, they may be able to take you down a couple streets and be like, yeah, we have properties here. It's great. It's not great, blah, blah, blah, things like that.

 

It's kind of just like, literally, I would rent a car and just drive around. I think that would be the most beneficial thing I could do. Obviously, I'm going to do a lot of research I already invest here. So I've I'm gonna assume I've done my homework, right? Like I've I've looked out where property values are an area where I'm targeting, what are the rents in that area? What is the quality of that neighborhood using things like Roofstock’s, neighborhood rating are truly as crime maps, things like that to kind of hone in on a couple sub markets. And then I'm really just driving around seeing like, where cool shops and restaurants and things like that popping up and you know, near some of the areas I'm looking at that could drive rents up things like that make it desirable. So those are mine. Kind of the things I'm I'm looking to do.

 

Tom:

I love it. That's great, Michael 24 hours in a city you're evaluating?

 

Michael:

Yeah. So I and I have not invested there, I'm considering investing there. So I've done this numerous times, it's it can be a lot of fun if the trip goes well if you do a lot of your homework. And so first and foremost, I would say the trip begins well before you get there. And so having an agent that you've spoken to that you've selected from numerous agents you've interviewed is really important. And then having a property tours lined up in advance I think is a really good way to go about it.

 

And so what I did is I went out to the market in the Midwest, this is a while back. And I had one agent selected from numerous agents i'd spoken to she had properties lined up that we were going to go see from this hour to this hour. And then I also had standing meetings with different property managers that I was going to go interview in person of the ones that I had interviewed over the phone and had made a shortlist of.

 

So I went very similar to a meal went property to a ring instead of neighborhood to ring and looked at specific properties for several hours throughout the day. And then went and met with property managers after the fact. And then I was able to show that the properties that I had just seen and talked about the ones I liked, or disliked.

 

And so in addition, there's that research element when you're determining who your agents are just doing some research about some restaurants in advance, or some things that you want to see in the area, I think is really beneficial as well. And I am very, very fortunate in that my wife is the research queen, she always has his amazing itinerary set for us before we go places. And so my most recent trip out to the Midwest, she found like the top 10 best restaurants out in Cincinnati and was like, Here you go, you gotta go check them out.

 

So I think eating and dining at local establishments, in the words of I think it was a little mermaid that I want to be where the people are, to go see who you know, who is there, what's the what's the feel, what's the energy like? So I think that is is really, really important as well. And I talk a lot in Roofstock Academy about, you know, when you go to a market, you can't unsee an unexperienced things. And so if you have a bad experience, or get a bad taste in your mouth, that's going to affect your maybe want to invest in that market, which can almost be a detriment, because from a pure investment standpoint, it might not matter how the neighborhood makes you feel.

 

But on the opposite side of the coin, if you have a really great experience that could only bolster you know, your desire to want to invest in the area, which can be helpful as long as the numbers make sense too. So I think having a great experience and just learning the market being around can be very helpful and very beneficial.

 

And then also when you're just shooting the breeze with people, you know, in talking about different markets with different professionals or different agents, you say, Oh, you know, I love my favorite restaurant is so and so and they go oh yeah, it's right down there by whatever. You just have a better working knowledge conversationally and physically of what the market is like. So I'm meeting with my agent During properties, meeting with property managers and having a gastronomical 24 hours as well.

 

Tom:

I love the food aspect. I'll throw a couple of notes in there as well. And at a very high level, I mean, we've we've purchased properties without visiting them. You know, I wouldn't say it's necessarily like a hard requirement to go. But if you have the opportunity, I mean, why not? You know, one thing that we didn't talk about is, this is a business trip and those type of expenses. I mean, this is not tax advice. But with these type of business expenses, flight, hotel, car rental, you know, even food, there are some potential tax opportunities to as to be able to write off, deduct all that good stuff.

 

So, but again, this is not tax advice. But in doing that, there is some definitely some juice to squeeze with that opportunity of those costs.

 

Michael:

Keep track of everything.

 

Tom:

Yeah, totally keep track of receipts of everything, for sure. The other point that I really like about Michael and I've done a bunch of market tours, just working in the real estate space for a while is to you do a lot of your work ahead of time, and having like a really thorough agenda and schedule is you're going to get that much more value out of it when you go because your time is super valuable. So you want to have it pretty lined up with a pretty tight agenda by the time you get out there. You know, from from touring, to meeting with vendors, property managers, whatnot.

 

The other thing that I'll add in there is Be it a market that you currently invest in, or that you're evaluating investing in, I would recommend taking time to see like range of multiple neighborhoods. So for all of these, at least specially with these, like big cities, there are some pretty big swings, like in the neighborhoods, and I would try to see a range of cities.

 

So like, let's say you're going to Atlanta, um, you know, perhaps you're looking up north in Alpharetta or an area and you're looking at Stone Mountain, and then you're looking at, I would try to not just do one little pocket of a neighborhood and try to get some range into the neighborhoods that you're looking at. And then I would research them and kind of like, so you can set a baseline. So okay, this is a three star neighborhood. Okay, this is what a four star neighborhood in Atlanta looks like. Okay, this is what a two star neighborhood Atlanta light looks like. That way in evaluating future properties, you have a little bit of, you know, an idea of what that range is like, the the boots on the ground.

 

The other one with the property manager and the agent. It's great to get on the road. And definitely, you should do that while you're there. But I would recommend busting open a map with them, like while you're there and just kind of getting your feedback on the itinerary of what you're going to look at and get their input on. Because real estate is a moving target, right? And just kind of get their insight on like, okay, lately, we've been seeing a lot of transactions here, there's been some more vacancy here, there's been prices going up or rent, whatever. So I would recommend some time in the office with them kind of one on one and going through that.

 

And the very last thing I'll say on the culinary pieces, I love food, too. I love traveling different regional cuisine is amazing. And, you know, there's a lot of great resources out there, Yelp, one that I really like is the eater website. So if you do like, you know, Austin eater, or SF eater, they have a blog, and I think they keep it pretty well put together of like, you know, top 10 newest restaurants and do it like every month. So like that's a fun way to find new stuff. Word vomit done.

 

Emil:

I want to quick question for you, Michael, you know, you you mentioned, sometimes you can't unsee what you've seen when you go when you go look somewhere? Do you think that I could actually be beneficial and that like a lot of people invest? You know, like the paper, the numbers on paper look great, but they're not factoring in that, you know, sometimes a certain neighborhood could, older home, lowering whatever it is that causes a lot of things that don't show up on the spreadsheet are hard to predict. And I think like if you go and see those things you're going to be it's a lot harder to just go into it blindly. And just like, you know, trick yourself in Excel.

 

Michael:

Yeah, totally. I think I think that's a really great point Emil. Kind of the counterpoint to that is not so much of the specifics of the property itself. But let's say you go get on a flight to St. Louis, and you arrive, an airline lost your bag, and you go to rent a car. And that person at the car rental is just a real pain in the butt really rude and they and they don't have your reservation. And so now you're getting into a crappier car than you thought you were going to get without your bag and you show up to the hotel and I lost the reservation. And you're so you're sleeping in this tiny room and you're like man, St. Louis frickin sucks. And you just have a bad taste of St. Louis your mouth but has nothing to do with the property or the market itself.

 

So yes, I think to your point, you can see things in reality that you're not able to ascertain from a cap rate calculation are from a listing and that absolutely can influence you and can probably save you but just the sheer fact that the experience that you personally have and then you go there you go to the restaurant you got your order wrong. And the waitress, you know, the the waitstaff is really rude. You're like, Man, I've never come back St. Louis, this place sucks. That might taint you from making a really great investment. Because the numbers still make total sense. You just happen to have a crummy vacation, or a crummy work trip.

 

Michael:

Got it? Okay. So So I encourage people to not let the personal bias personal experiences influence the investment side of the things. But of course, don't go into it going on their numbers all work. So I don't want to look at anything else.

 

Something else to just be cognizant of is, you know, where you're going to these market tours, I think it is really important to have a an agenda and locale agenda, whether that's you've planned it or your agent has planned it. But I would also if you're planning it, if you're going solo, get input from from local folks in the ground about the different markets, because one of the things you do want to make sure is, hey, you're a visitor, and this is a foreign place use, you just want to make sure that you're you're being safe, and you're being aware of your surroundings. And so getting input on the places that you're heading, I think is important, just like you would do as a tourist in any in any foreign in a foreign place.

 

Tom:

That's a great point, Michael, on the the safety aspect, and also in looking at properties if you're going to go, you know, this is kind of common sense thing, but you know, if you're, maybe it's a house that's not for sale in a neighborhood, like don't be sketchy, you know, like, don't be I don't know, just looking into people's windows or whatnot. Use use your judgment and safety first. Yeah. And great point about asking about the different neighborhoods, so like, if you're going into an area that perhaps has higher crime, like, no kind of local, whatever boundaries, like if it's safe, if you're just yeah, be informed before going into an area.

 

Emil:

My agent would always say, these are areas I don't feel comfortable going at night. And that's probably a good good barometer to like, Alright, cool. Good to know.

 

Michael:

It was funny, just real, real quick, prior life anecdote. So I used to work as a professional fire protection engineer. And so I was going into this property that was vacant. And it was like this old, old, old, old, old abandoned warehouse and attached to office building like two or three square office building. And dude, who I was with was like, we were same age, and we were in our early 20s, whatever. And so we were shooting the breeze, whatever. And so we're walking through his warehouse and there was like, US syringes and like a chicken head inside of like a pentagram on the ground. And I was like, this is kind of weird, but we were like chatting, whatever, like my job is to look at this kind of stuff. So I need to look at the building.

 

So then we went into this office building and the power was off. There were no lights all the windows were boarded up, so it's pitch black. We both had our flashlights walking through and while walking, I'm like, why like what am I doing here? This is not like okay, this is safe. And the dude I'm chatting with like, meanwhile is up a floor above me and he's like, Hello, Is anybody here? Yes, a lot of times you find people in here and this and that. I'm like, like so not okay, like let's get out of here. We don't get paid enough to do this. Let's just leave. So for whatever that's worth be aware of your surroundings and if something doesn't feel right listen to your instincts.

 

Tom:

Safety first one of my favorite episodes that we've done is the Halloween episode where we all you know we give Yeah, yeah, yeah, of ghosts and creepy creepy things found highly recommend checking out that episode our our Halloween episode. cool guys, any so anything wrapping up our 24 hours in a city?

 

Michael:

I think just kind of to wrap things up, you're gonna be tired, especially if you're changing time zones, jetlag is a real thing, I seem to be very prone to it. And just I would say push through the tiredness, especially if you're just traveling, like the time there is going to be well spent, you're going to look back on it. And remember all of the information you gained or contacts you made much more so than the sleep you didn't get. And so I would encourage you to push yourself and work through that. And just make the most of the time you're there because it might only be for a 24 hour 12 hour, it might be a short timeframe. So go use that because you might not get a second opportunity.

 

Emil:

My finishing tip if this is a market you've been investing in, you go there regularly, you know, you've met with your PMs, I would on return trips, not mentioned anything to my property managers and I'd go I'd go check out my properties. See how they're, it's kind of like a check without them, you know, you tell them you're coming in, they're gonna make sure your properties are nice and clean. All the landscaping is taken care of, I would hope at least that they do that. So you know, just go visit and don't mention anything and see how your properties are doing. It could be a good way to kind of trust but verify.

 

Tom:

Love it. My last piece I'm going to say is do a post trip like little write up, you know, our little human brain are good at forgetting things and recovering things differently later. So on my flight back I do this, you know, I make a point of doing this before taking a nap is all kind of write down. Okay, what what what did I do? What were my takeaways from each thing. And you know, I may not look back on that paper like or that whatever spreadsheet or however I'm organizing it a long time. But something about writing it down. It's almost like I'm writing it into my brain. And I just remember it better on those type of trips. So, again, before you go, maybe set some clear objectives and like an agenda of what you're trying to accomplish. And then on the way back, take the time and write down what you what you discovered. And that way you're much more likely to take action and get value from it.

 

Michael:

There's a ton of data to support that time that writing it down is imprinting it.

 

Tom:

We're all big, personal productivity buffs and love to layer this stuff into our day to day investing stuff.

 

This episode today was brought to you by Roofstock Academy. Check us out one stop shop for learning to invest coaching on demand lectures. And then plus a bunch of other benefits like a money back guarantee that lasts for five years, as well as 20 $500 in marketplace fee credits on roof stock. So check it out at roof stock academy.com. And as always, happy investing.

 

Emil: Happy investing.

 

Michael:

Happy investing.

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