The Investing “Map” You NEED to Uncover Hot Markets, Neighborhoods, & Deals


Harnessing the power of data gives you an enormous advantage in your real estate investing journey, allowing you to discover up-and-coming markets or find deals that are flying under the radar. While crunching the numbers might seem like hard work, there are all kinds of software, tools, and templates to lighten the load!

Welcome back to the Real Estate Rookie podcast! Today, data scientist Ariel Herrera returns to the show to offer more advice for investors who want to find the next BIG market (before it takes off!) and source better real estate deals. Whether you’re just getting started or already have a few rental properties under your belt, this episode is brimming with helpful tips—from niching down to specific neighborhoods to using artificial intelligence (AI) tools for EASY market research!

Tune in to learn which data points are most important when choosing a market and how to use “census tracts” to make an informed decision. You’ll also learn about the three biggest competitive edges you can gain in real estate (even as a complete rookie!). But that’s not all. Ariel will even show you how to craft a “map” of up-and-coming areas that best align with your investing strategy, long-term goals, and personal preferences!

Ashley :
This is Real estate rookie episode 429 er. Let’s find the best real estate deals together. I’m Ashley Care and I’m here with Tony j Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And today we’re going to answer one of the most common questions we get from real estate rookies, which is where do I invest? Now today’s guest is here to answer that question. She’s a data scientist, so she’s using data and automation to find the best real estate deals. And we’re actually having her back for the second time on the show now. Today she’s going to show us how to create your map that identifies future hotspots in up and coming areas for appreciation, what data actually matters for finding a market and how to use census data as your secret weapon. Ariel, welcome back to the show.

Ariel :
Thank you Tony and Ashley is so happy to be back.

Ashley :
Yeah. So we first had you on episode 349 ER where we kind of went into your background and your real estate investing experience. So if you want to go back and take a listen to that episode 349 er. But today we want to get more into the tactical stuff that you have been using for your business and really have implemented and built out to help you grow and scale and specifically to find deals. So what is kind of the competitive edge that the rookie investors should be using data for in their real estate investing journey?

Ariel :
Yeah, so I would say there’s three main competitive edges that rookie investors should really focus on. One being granularity. So if you ever drive through a particular neighborhood, you may see some really nice new homes maintain lawns, but within just a few blocks, a whole neighborhood could change. This is because real estate is hyper local. So in that case, trying to look at what are the best cities to invest in are sometimes not enough. You want to dive even deeper, go into what zip codes you should be investing in, but even a level deeper, which be what neighborhoods to invest in. So the US census collects all this information and they have it all the way down to what they call a US census tract. So this is about a population of 5,000 people or so. Think of 10 blocks, so smaller than a zip code.

Ariel :
And if you’re able to actually look at the data at a granular level, you can more so be more confident in what streets you’re investing in, not just what city. And you could find this data on census reporter.org that has all the information that you could find from the US census. Then the second piece would be comprehensiveness. So a lot of the times I see investors go into the pitfall of opening up 10 different browser tabs. They have one best appreciation, which cities then they have population growth and maybe last cashflow. But do we really want to look at all of these data points siloed? Probably not. And as an example, say if you are looking to book a hotel, you may look for things like how clean is the hotel, what amenities? Does it have a pool as well as the location of the hotel, but are you opening up five different browser tabs looking at every single thing you care about? No, you’re likely going to an Expedia filtering down on price and then selecting the one with the overall highest rating, a rating that combines all those things you care about, which you might see like 8.9 out of 10, and then you probably will go with that hotel. So investors should really think of data points not all separately but together combined into a single score.

Ashley :
So I think you highlighting the getting very niche in your neighborhood is a great example because you can go and you can read an article on the top 10 markets to invest in where it’ll say Seattle, Buffalo, Ontario, whatever that may be. And there’s so many different components that when you actually go into the market, I know in Buffalo, if someone came into Buffalo that they would know, they’ll look at it and be like, oh, this is actually pretty cheap and maybe I want to buy this house. But I would be able to tell, no, you don’t want to be on that street, but if you take a left and then you take a right and you’re around the corner, that’s where you want to be. And it can become so niche and you really do want to get super granular. And Tony, I’m sure the same as in Ontario where the same thing you could tell someone exactly what streets they would want to be on. And so I think that’s a really great piece of advice to start off with this whole episode is make sure that you are analyzing really specific areas and not just a city as a whole. One question I did have to follow up is how does the census data compare to other websites that we may pull information from?

Ariel :
So the census data, because it’s directly from the US government that’s collecting, it tends to be a bit more accurate when you’re looking at those demographics, but there’s also other useful data sources that you might pull from Zillow, Redfin, realtor that have monthly data on what’s been sold, what prices. Typically though these don’t go as detailed as the US census. Some of them may stop at the zip code level, which can still be really useful, but for some zip codes they’re pretty large. So I think kind of coupling these data sources together really helps to get the full picture.

Tony:
Rol. One question on the census data, how often is it updated? Because when I think of census it’s like once every 10 years or something like that. How often is the census data that you’re referring to actually getting updated?

Ariel :
So they have two of them. The decennial one, the one that you’re referring to is every 10 years, and that information’s only every 10 years because they try to collect as much as possible. So the 300 million plus people in the us whereas the yearly one that comes out is a subset of that, but still can be highly accurate.

Tony:
So we covered two of the competitive edges already. So what’s the third one that you’re going to mention, Ariel?

Ariel :
The third one is timeliness. So you always want to check whatever data source you’re using. When was the last time it was updated? So for real estate, we’re a bit lucky that it doesn’t change too rapidly. Like say the stock market where prices are changing multiple times in a day, but it’s still important to understand how a market is moving say month over month or even year over year to see trends. In order to do that, we have to have as updated information as possible. And I see a lot of investors sometimes will use websites that are more made for people just generally moving across the country. So websites like what are the best places to live in? And unfortunately because it’s not really meant for investors, they don’t have to sometimes uphold themselves to having the latest data. So I’ve seen some sites that have population information from 20 10, 20 20, and that’s not going to be as useful as an investor. So you want to make sure that you’re looking at when the data was pulled and also where it came from. Did it come from the US census? Did it come from another reliable site? And that could really help to make sure you’re not just taking any random data source, but you’re using the most reliable ones for your investment.

Ashley :
Now what about when you’re going into a market? Is there anything you should do before you even start looking and analyzing a market with this data?

Ariel :
A hundred percent that you should be actually focusing on what your location strategy is as well as your risk tolerance. So going back to the example of vacationing, if you are looking to take a one week vacation, at least for myself, I probably wouldn’t just take a physical globe, spin it and then make a pointer and say, all right, I’m going to go to Thailand for a week. Probably I have some sort of theme or reason as to why I’m looking to go vacation. So for example, maybe you’re looking for a lazy vacation, you might go to a resort in Mexico, it’s all inclusive if you’re looking for more activity, maybe Seattle it’s more preferred. Or if you’re looking to party, maybe you’re looking to go to Nashville. So you do come in with some sort of theme and as an investor you should also have that in mind as to what your risk tolerance is.

Ariel :
So for me, when I first started investing, I would say it was about medium. I wanted to invest in an up and coming area and willing to hold for about 10 years to do so, but I was also looking for a B minus C plus area. And for those that aren’t familiar with neighborhood grades, very similar to elementary school, A being the best in this case being luxury homes, for example, really nice affluent areas with D being those that need more revitalization. Now knowing that I’m looking for kind of in the middle of sweet spot C plus B minus areas, I can start eliminating cities like New York City, San Francisco and start focusing on those markets that maybe have more opportunity for growth or for boom. So by first thinking about your risk tolerance, the locations that you want, it really helps to start taking the whole United States and start focusing in on just a couple of areas.

Tony:
Eric, you bring up a really important point. It’s something that I try and preach often as well is best city to invest in is really going to depend on you as an individual investor and the best city for Tony may be different than the best city for Ariel or for Ashley. And part of the reason is is that first we all have different resources to deploy, right? Maybe we have different capital, maybe we have different access to credit, maybe we have different whatever it may be, different resources. But the other piece is that we all have different motivations as to why we’re doing this. Someone might be investing in real estate for the tax benefits, someone might be investing in real estate for the long-term appreciation, someone might be investing for the cashflow today. So I think all of those things come in and then like you said, hey, I’m looking for up and coming markets ideally in a C plus B class neighborhood because that’s what aligns with your specific investment goals and your resources.

Tony:
So I love that we’re kind of breaking this down, but you basically described like your buy box, right? Like hey, here’s the buy box that works for me, aerials the investor. And I think for all of our rookies, you’ve got to build that buy box out first before you move on to trying to choose the right city. Otherwise you’re just kind of shooting from the hip. Now we’re going to do a deep dive into what data actually matters when trying to find the best real estate markets to invest in. But first we’re going to take a quick break to hear a word from today’s show sponsors. Alright, so we are back from the break and Ariel’s already kind of started us off with some ways to get that competitive edge as you’re looking for your first real estate investing market. But Ariel, I guess what data should a rookie investor be looking at in order to find a great market to invest in?

Ariel :
This is my favorite part, Tony, to talk about the actual data points. So first taking a step back since my focus is up and coming areas, one of the reasons when I was younger, I would hear a lot of people, family members in my network saying, oh man, if I invested in Hoboken, New Jersey back in the nineties, I’d be filthy rich today. And for those that don’t know Hoboken, New Jersey is a city right outside New York. You have a lot of young professionals as well as people with really great careers that have established their families there. And the area needs to not always be as great, but has really become one of the most sought after areas in New Jersey to live in. So how do you actually find the next Hoboken for example, or at least an area that’s up and coming while being close to New York?

Ariel :
New York with rents rising? At some point a lot of people started to look at other areas surrounding New York City people that were working in New York City. So they looked instead of living in Manhattan, looking in Brooklyn, Staten Island and in New Jersey in Hoboken, one of the metrics that you would see this in is population growth where a particular neighborhood is starting to see from one year to the next more people moving into it. And a lot of these people that move into these up and coming areas tend to be those that are looking to save money like young professionals. So you start to see here that the age becomes more variable in the area. So you start to see more younger people move in, but still likely some people in their mid ages as well as in retirement ages. So a good mix. And these people that do move in usually have some sort of job that they’re now commuting to. And because of that you start to see education increase. So more people with a bachelor’s degree or higher that come into these areas. And those are the three demographics that I like to look at initially for up and coming areas. And I also touch on some market stats too. So the three of them are population growth, mix of age, and then education rising.

Tony:
And do you want to see age decreasing I guess, or when you talk about age specifically is what are you looking at there?

Ariel :
I like to see a mix at least year over year seeing about maybe a 10% growth of those who are in between age 22 to 30. So I like to see younger folks also moving in potentially establishing their families there too.

Ashley :
Ariel, where are you finding this data? Are you using census too or is there somewhere else you’re finding this information?

Ariel :
Yeah, so this is all found for free on the US census down to that neighborhood level that I mentioned where you can observe going back even 10 years how these stats have changed. So using Google Gemini is also an easier way to be able to get this data. So many of you have probably used chat GPT or heard of it before and Google Gemini is very similar. So instead of having to research information online and open up multiple tabs, you can ask Gemini questions like what is the average age or how has population change in a particular area or a zip code and it will give you that information back so it really cuts down your research to a shorter period of time. Great. So we just covered those three demographic stats and then also looking at market data to find up and coming areas.

Ariel :
So you can also look at appreciation. So a lot of these folks that are moving into these areas, they’re not all renters, some of them are actually looking to live and buy assets there, buy properties. So you start to see these properties increase in price. For example, maybe in 2010 they are $200,000 as the median house price, but then you see the next year it becomes 220 K, so about 10% increase and you’ll start to see this in this up and coming areas, their appreciation going up. And second, one of my favorite things to look at is the median construction year. So in New Jersey, and Ashley you could probably confirm this with New York as well, a lot of old homes. So you’ll see in the US census that the median construction year of a home is maybe 1910, so pretty old. But for these up and coming areas you start to see that start to increase. So maybe it becomes 1930s or 1950s and you’re thinking how is that happening? Well, what’s going on is that these people who are buying properties, it might not be worth trying to revitalize these old buildings. So instead they’re tearing them down and they’re building new construction on top. So you start to see more flipping activity as well.

Tony:
Super interesting. I’ve never thought to look at the median construction year as a data point to consider. Just going back to the appreciation point, Ariel, do you know what the average appreciation is like nationwide? So you can gauge if a city is maybe or a zip code or areas appreciating faster than the average?

Ariel :
That’s a great question Tony. So one of my recommendations is to always have a benchmark. So whether you’re looking at the national average, the average or the state or the average of the county, you want to choose some sort of benchmark to say, is this area beating it? Because if we say that appreciation is increasing by 10%, but nationwide it’s 30%, that’s not good, we probably don’t want to invest there. It’s way falling below the average. So choosing some sort of benchmark and then comparing against it really helps to understand is this area growing at a faster pace?

Tony:
Gotcha. And which benchmark do you prefer? Aerial and why?

Ariel :
I like looking at state. If you look at counties for example, I saw this particularly for Wayne County, for Detroit, that certain areas start to look really great like oh wow, a lot of fast appreciation and growth, but when you compare it to the whole state, you see that median household income is still falling below and it’s still not there yet to be considered a B or B plus area. One other thing to also consider, and you probably have thought why I haven’t mentioned this yet, which is job employment and you could use Gemini also to see what are the top employers in an area to see if there’s more people coming in that have higher incomes and can also help influence an area. But there’s one major concern you have to have which is RTO return to office. So if you see for example, Newark, New Jersey, Prudential is one of their main employers there.

Ariel :
And a lot of the times people would say, oh, Newark’s going to be an up and coming area because you have a huge employer, a lot of people working, but it doesn’t mean that people are actually living there. And now with return to office, some employers let you work from home anywhere between two times a week to even most of the month and only have to come into the office once or twice. So because of this you really want to see those policies so that you don’t make a decision about an employer, but in fact the people that work for that employer don’t actually live there.

Ashley :
That is such a great tip as to when you are analyzing that data is to another variable to actually look at instead of just like, oh, there’s these three big industries, but do people actually need housing to actually go to work in that area for that or is it a virtual company where majority of the people work across the us? So yeah, that’s definitely a great thing to consider. My next question is, so with job growth, if you are in an area that maybe it’s a vacation homes, as you’re looking for short-term rentals, do you even really care about job growth and what’s the best way to use all this data when deciding what strategy is best for that market?

Ariel :
Yeah, it’s a great question. I think you still care about job growth in relation to all the different types of strategies that you can go for and just summarizing what those are. So you could be looking at long-term, medium term and short term. Typically when you’re buying and holding long-term being a lease of 12 months or more median term, 30 days to less than 12 months and then short term under 30 days. So when it comes to long-term, some things that I like to look at include vacancy rates as well as median household income. So particularly if I see median household income. So what people are making is not that steady starts to fluctuate. That may mean there’s some seasonal jobs or something that’s not keeping income consistent, which could mean that tenants in turn don’t pay on time. These are things that I would look for when things thinking of long-term.

Ariel :
Then when it comes to median term and short term, this is where you really want to look at attractions as well as amenities. So Ashley, I think it’s still important to look at job employment, but it’s probably lesser waiting. It’s not as important. What you really care about is what’s going on in the area. And you could use Gemini to do a quick summary and say, Hey, can you please list the top universities amenities and tourist attractions in a given area? And if you see universities for example, that could be a great strategy to go after student housing. If you see attractions, whether they be natural like a national park or they’re manmade like a Disney, that could still be a great signal to look at short-term rentals too.

Tony:
So iro, you’ve mentioned Gemini multiple times, and again for folks that maybe aren’t familiar with what Gemini is, it’s a chatbot that was created by Google Chat, GBT is probably the one that’s most popular, but I guess you keep mentioning Gemini are, do you have a preference of that tool versus chat GPT for this purpose? And if so, why?

Ariel :
Yeah, I like chat GPT more so the paid version, but when it comes to free, if you’re going to choose between the two, I like Gemini and the reason is because Google has all this information when it comes to locations like Google places, events, and they just have I think a wider view of that. So if you wanted to say put in a property exactly and say 1, 2, 3 main street, what are the nearest attractions to it? I find that Google does a better job likely because it has that backend data that may be chat GPT doesn’t have.

Tony:
So Ariel, what other considerations should a rookie have when looking for an up and coming market? What other data points should we potentially be looking at?

Ariel :
Yeah, so I think there’s three major data points that rookie investors should be looking at. First being regulation and taxes. So you might see a particular area, have pretty low prices and think, wow, this is great. Maybe I can get some great cashflow. But you have to also look at expenses. So for example, Texas and a state known for having high taxes. So you want to see and review all the particular expenses. You could be facing taxes and insurance before just jumping into an area as well as local laws like zoning. So a lot of people have gotten the bug of, oh, I want to build a mother-in-Law suite in the back of my unit so that I can increase rent. So having more people live within the lot, but just because you want to do that doesn’t mean it’s legal. So you need to make sure that the property either zoned that way or can be, and some friendly states for that include California.

Tony:
I get this question a lot for the short-term rental folks who are interested in this piece, but it’s always like, well, where’s the best place to go to get this information on regulations and local laws? So what have you found Ariel’s the best way to do that?

Ariel :
Okay, sometimes using tools or APIs that extract information from county records. So looking at real estate API looking at sometimes the batch leads data could be really useful because they’re already getting all this off market data and they’re extracting information about zoning laws, but then you need to crosscheck that against what the county has. So this far, I actually haven’t figured out how to automate yet, but I have gone through the tedious practice of searching online and going to the county website, searching ordinances. Then from there, pulling up the document that will have different zoning regulations and then looking for the keyword of multifamily, seeing what those codes are and then comparing them against what the code is for the property from those original data sources.

Tony:
When you find a way to automate that aerial, please, you let us know so we can share that with everyone. It is a bit of an arguous process, but same for me. I found the best way to get a good sense of what the rules and regulations are just to reach out to the city or the county, explain what it’s you’re trying to accomplish. And a lot of times they can kind of point you in the right direction and obviously some cities and some counties are going to be more maybe be helpful than others. It might depend on what employee you’re chat with that day. But yeah, I found that to be maybe the easiest path. So the regulations, the landscape is one thing to consider. What are maybe some other things that rookies should be looking at as they’re trying to identify these up and coming markets?

Ariel :
Yeah, one of the biggest is also crime rates, which actually sometimes isn’t used the best way. So the FBI collects crime data across the nation and they provide it for free. Usually it’s what you see when you search crime on different websites. However, they actually state on their website that you shouldn’t be using crime for rankings. And they state this for a couple different reasons. For under underreporting crime, sometimes areas that have a large police force naturally see more crime. And the third, which I find the most interesting is that crime doesn’t always mean causation. So I’ll explain that a little bit here. If you are a student and you’re looking to study for an exam, if you are studying for 10 hours, you more likely are going to get a better grade, but doesn’t mean you get an A, not necessarily. So those two things are correlated with each other, so they change together, but it doesn’t mean that you’re actually going to get that result. And the same thing is for crime, just because there was an assault or something occurred on a corner of a street doesn’t mean that you shouldn’t invest in that street unless something happens because of it. So Ashley and Tony, if you lived in an area that all of a sudden had all this crime happening at all hours of the night, would you be like, no way, I’m staying put no matter what or would you just consider moving? Consider

Ashley :
It. Yeah. If it was all of a sudden happening, yeah,

Ariel :
You’d probably consider moving. And so that’s an effect of what’s happening with crime. So you could use the US census to look at these effects. One of them being population declines, people moving out of the areas, and then these people that are moving out usually have the ability to, because they have maybe higher income. So you start to see income drop as well. Then you start to see education drop, those that have bachelor’s degrees or higher are likely leaving the area and then you see more government programs like section eight. So all these four factors you can actually view with the US census data to help you not just say, oh, a crime happened here, but this is how it’s actually affecting an area.

Ashley :
And then what about personal preference when deciding on the area?

Ariel :
Yeah, my personal preference is always, well, I live here, I’m not going to invest in a place that I won’t live in. So as I was first looking at areas in New Jersey, my first rental property, I saw different towns by train stations and in the spreadsheets they looked amazing. I was like, oh my gosh, I’m definitely going to invest in this area. Then once I started to walk through them, I saw some of them did not have the lawns maintained, houses weren’t really kept up as well. There was trash on some corners of the streets. So I thought, how can I actually use data to help me kind of sift out these sort of areas that don’t really have much pride? And one of the data points you could use is ownership ratio. How many people in this particular neighborhood actually own their properties versus rent? Typically those that own, it’s their asset, so they want to keep it up as nice as possible. So you start to see when it’s about 60% of people own the property in an area, lawns are more maintained as well. There might be even a neighborhood watch and people are just looking to have more pride for that particular region. I think rookie investors should really consider would you live in the area that you are investing in and you could use data to help back it up.

Ashley :
Okay, so we want to find out how you came up with your rating system and the automation to create your map using this data. But first let’s hear a word from our show sponsors. Okay, so we are dying to know how to create a map that actually identifies future hotspots and up and coming areas of where you should invest. How do you go about creating this?

Tony:
And Ariel has created a step-by-step guide to do this. So you can follow along and we’ll link to it in the show notes for today’s episode.

Ariel :
Cool. So super excited to go over how do you actually create these neighborhood scores based on the factors that you care about. But I’m going to cover a couple of things and don’t worry, there’ll be a one pager that will have the information that you can follow. Overall, the goal that we want to do is to take all these different data points and instead of looking at them one by one, we want to look at them as a whole one single score that could help us to find what is the best neighborhood to invest in, not just best city. So the first thing you want to do is figure out your top five metrics, and this really has to do with your risk tolerance and your investment strategy. Now you could look at hundreds of metrics, but it’s way easier to start with just a few rather than going too wide.

Ariel :
So a couple of metrics you could look at include population growth, median household income, and education as well. The way you would get this data is also looking at smaller regions. So instead of looking at the whole United States, it’s easier to just focus on a couple of cities that you’re interested in. So that was first looking to expand outside of New Jersey. I was considering Austin, Texas and Tampa, Florida because they were having growing tech hubs. So instead of looking at the whole us, I just focused on those counties and I pulled those five metrics that I cared about for those particular counties. And the data that was pulled was that neighborhood level data. So the US census tracked. So instead of looking at information that summarized all of Tampa for example, I now maybe have a spreadsheet of say 2000 rows that has all the little areas that I can now see education population and the other stats I cared about for once you have your location, your five metrics, you download the data, you could do this programmatically, which is what I like to do, but you could also do this just downloading it to Excel, which makes it easier to comb through and work with the data.

Ariel :
And you want to understand trends, so not just what happened say in 2022 for these areas, but you want to see how things are changing over time. So for example, population, you want to see how it’s changed year over year. So the US census data can go pretty far back. I particularly like to look at the last five years and see how have things changed over time. And the next thing, once you have this data for the last five years, you want to create some sort of benchmark. So you mentioned previously that even if you see home appreciation increasing by 10% say every year, that’s not enough because what if the national average is say 30%, that’s underperforming. So the benchmark really is your choice. You could look at national state, or I suggest too, you could look at county level stats. So what you do for your spreadsheet is you just basically click the column and you look at the average across all these different neighborhoods of what’s happening, say for population growth. And then you add a field that says if it’s beating my benchmark, put a one. If it’s not put a zero. So with year five now metrics that you care about, if you add them all up together, you’ll see that some of these neighborhoods have met all the requirements and there are five, some of them are underperforming across the board. So you’ll see a zero. And now you could start sorting on these to see which neighborhoods you really want to dive deeper into with your agent.

Tony:
So one follow-up question, how long does this process that you outlined just take? Is this weeks of digging through the data or is this, say someone who’s somewhat savvy in Excel, could we do this in an afternoon?

Ariel :
In an afternoon, about 30 minutes to an hour? And what I’ll also have, I do have Python tutorials, but I’ll also have just a quick free tool if you want to just quickly download for a particular region. So you don’t have to even go through the process of retrieving the data, it’s just straight analyzing it in Excel. So one of the things that I’ve also been asked a lot for people who have created their own scores as well is what if I care about one factor more than the other? So as an example, if you are a business traveler and you’re booking a hotel, you can sometimes see these tags that Expedia or other sites will have best for business travelers. And the way they do this is that they look at the same exact metrics, but they’re looking at some things more importantly. For example, does this hotel have a meeting room?

Ariel :
Is it local to conferences? So they have a higher, what we call waiting towards these. So if you wanted to get even more granular with your score, you can start to weight these different metrics differently. So if population growth really matters to you, that’s what you deem to be most important across your five metrics. You can wait that say as 60% of your total score and then the rest as 10% making your score a hundred percent in total, that could be the best for a neighborhood. So there’s a lot of ways you can really get detailed in these scorings, but I suggest to start simple at first. And then if you want to expand to using weightings or maybe even using more data points.

Tony:
So once you’ve gone through all those steps, Ariel, it sounds like you’ve got at least a decent idea of not only what cities, but even beyond the zip codes. What are the tracks within those cities that may be aligned best with the criteria that you’ve decided that’s important to you? So once you have all that, then what are the next steps from there? Are you just kind of working with an agent to source deals or is there another step you take beyond that?

Ariel :
Yeah, my favorite part is actually working with someone else. Get yourself out of the spreadsheets and it’s time to start looking at properties. So work with an investor friendly agent and they would love it if you have already a map and hey, I’m considering these areas, these blocks, but I really need your help to understand if these neighborhoods really are up and coming because agents might have some knowledge that you don’t know since they’re local experts and they have knowledge at their fingertips. So my biggest recommendation is only use data so far, say 85% of your research, but really use that last 15% to get local knowledge with an expert.

Ashley :
If anybody needs an investor friendly agent, you can go to biggerpockets.com/lender finder because that is such a key to your success, is actually having an agent that understands real estate investors and understands what you are looking for too. In a property I’ve used both where a real estate agent did primarily primary home sales and what we were looking at in a property was very, very different as to what I wanted and what she thought would be a great sell on the property. So it does make a difference to coordinate that. Once you have this map created and this data and you’ve honed in on your market, what are you doing with the agent that may be different as far as once you’re actually going and viewing the properties or having the agent view them, is there a step further that you’re actually taking once you actually identify your property to scrub data?

Ariel :
I think at that stage you can kind of start to move off of this demographic and market stats and really start to hone in on the property data by looking at what the property could rent for and making sure that those cashflow metrics that you’re reviewing so your income and expenses really is true. So one of my favorite resources is free Zillow’s tool called Price My Rental, and you could pop in and address there and it’ll show you on a little gallery view all the properties that are similar to it based on bedroom count, bathroom size with photos, and you could quickly assess what the property that you’re thinking of, how it fits there, and if the rent price is aligned with what your original metrics were. So the demographic data, I think once you’re looking at properties, you can kind of stop there and then start going into property data.

Ashley :
And that is where we’re going to have to have Ariel on for part two to talk about in depth the process that you can take to actually find that data. Well, thank you so much for all of the information that you have provided today. We are going to put the page that you created to kind of follow these steps to find the data for the market and to put together an actual map where you can identify what is a specific niche neighborhood that you should be investing in. So thank you so much for adding so much value to us and the rookie listeners today. Thanks so

Speaker 4:
Much for having

Ashley :
Me, and if you want to find more information on Ariel, we’ll link her information also into the show notes. Thank you guys so much for joining us today. I’m Ashley. And he’s Tony. And we’ll see you guys on the next episode of Real Estate Rookie. If you want to hear great GU like Ariel, go to your favorite podcast app, search real estate rookie and hit that follow button as it helps us grow and we’ll be able to find more great GU for the show.

Tony:
This BiggerPockets podcast is produced by Daniel ti, edited by Exodus Media Copywriting by Calico content.

Ashley :
I’m Ashley. He’s Tony, and you have been listening to Real Estate Rookie.

Tony:
And if you want to be a guest on a BiggerPockets show, apply at biggerpockets.com/guest.

 

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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