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Multi-Family Investor
    Collective (MFIC)
                 Market Research:
Narrowing Your Investment Universe

                  February 4, 2009
Agenda
I.     Brief Prior Meeting Review & New Member Intros
II.    MF Investment Process

       Narrowing Your Investment Universe
III.   State & County Identification
IV.    City Selection
V.     Neighborhood Analysis

VI. Summary
VII. Open discussion & Concluding Statements
I. Review of Prior Meeting &
New Member Intros
Review of Prior Meeting:
Prepare Yourself for Multi-Family Investment Success

New Member Intros
  Investment experience
  Why real estate investing?
  Short-term goal
  Something interesting about you

Goal: ID one person who you may be able to assist.
II. Multi-Family Investment Process
Phase          Investment Process

PREPARATION    1.   Prepare Yourself for Multi-Family Investment Success
               2.   Market Research: Narrowing Your Investment Universe
               3.   Building & Managing Your Investment Team

BUY RIGHT      4.   Mastering Multi-Family Investment Analysis:
                    The Properties’ First Hurdle
               5.   Offer & Negotiations: Getting to Yes
               6.   Due Diligence: Verify—Do I Really Have a Good Deal?

MANAGE RIGHT   7.   Writing an Investment Management Plan: The Roadmap
               8.   Executing Your Investment Management Plan
               9.   Value Add: Practical Ways to Increase Property Value

SELL RIGHT     10. Sell Right: Preparing Your Property to Sell For Top Dollar
III. State & County Identification
      Population Growth, 1st Predictor of a Growing Market
Invest Where People Are or Will Be
US Census Bureau: Population Projections
http://factfinder.census.gov


                                           • Decennial Census
                                           • American Community Survey
                                           • Population Estimates Program
                                           • Economic Census
                                           • Annual Economic Surveys
III. State & County Identification
      Population Growth, 1st Predictor of a Growing Market


Top 10 States
Ranked by Growth
Rate
2000 to 2030




                                                    4. Texas

                                                    3. Florida




                                                    7.   North Carolina
                                                    8.   Georgia
                                                    1.   Nevada
                                                    9.   Washington

                                                    10. Oregon
                                                    2. Arizona
                                                    5. Utah
                                                    6. Idaho



  Source: US Census
III. State & County Identification
      Population Growth, 1st Predictor of a Growing Market


Top 10 States
Ranked by Growth
Rate
2000 to 2030




                                                    4. Texas

                                                    3. Florida




                                                    7.   North Carolina
                                                    8.   Georgia
                                                    1.   Nevada
                                                    9.   Washington

                                                    10. Oregon
                                                    2. Arizona
                                                    5. Utah
                                                    6. Idaho



  Source: US Census
III. State & County Identification
     Job Growth, 2nd Predictor of a Growing Market
Invest Where the Jobs Are or Will Be
US Bureau of Labor Statistics: Available by national/state/county/occupation
http://www.bls.gov
III. State & County
          Job Growth: Invest Where Jobs Are/Will Be
 Thousands of counties are now experiencing job growth…
 Example:                Travis County (Austin), TX




Positive Trend:
   Maricopa County (Phoenix), AZ            Dallas County (Dallas), TX             Dade County (Miami), FL




Negative Trend:
    Mohave County (Lake Havasu City), AZ    Hopkins County (Sulphur Springs), TX   Brevard County (Cape Canaveral), FL
    Grand Canyon                            Dairy Capital of Texas                 “Space Coast” for JFK Space Center
IV. City (MSA) Selection
Review City/MSA multi-family indicators
                                                   Review:
                                          Institutional
 ● Available Property Types               Market Reports

                                                 City Websites
 ● Vacancy Trends
                                          Masterplan
 ● Employment Trends                             Local News & Media
 ● Construction Trends
 ● Rent Trends
 ● Sales Trends



                                                           Exercise: Institutional Marketing Reports
V. Neighborhood Analysis
Narrow down your investment universe to high growth neighborhoods.
Ensure neighborhood is stable or improving. Look for growth drivers

● Development                                       Review:
  Incentives                                    City Websites
● City Planning &                           Masterplan
  Path of Growth                                  Local News & Media
                                    Police Department Websites
● Crime Stats & Trends
                                                Zip Code Analysis Websites
● Transportation
● Employment Diversity /
  Sources
● Tenant Profile
V. Neighborhood Analysis
Narrow down your investment universe to high growth neighborhoods.
Ensure neighborhood is stable or improving. Look for growth drivers

● Development
  Incentives
● City Planning &
  Path of Growth
● Crime Stats & Trends
● Transportation
● Employment Diversity /
  Sources
● Tenant Profile
VI. Putting it All Together:
Narrowing Your Investment Universe


                                NEIGHBORHOOD ANALYSIS
   Review local media sources to narrow down your investment universe to high growth neighborhoods.
   Ensure neighborhood is stable or improving. Look for growth drivers.
        ● Housing Composition               ● City Planning/Path of Growth ● Crime Stats & Trends
        ● Transportation                    ● Employment Div / Sources     ● Tenant Profile


                                         CITY SELECTION
    Review institutional market reports to ensure market indicators are favorable.
         ● Available Property Types          ● Vacancy Trends                ● Employment Trends
         ● Construction Trends               ● Rent Trends                   ● Sales Trends




                            STATE & COUNTY IDENTIFICATION
   Review US Census demographic data and identify states that will experience population growth.
                            .
   Review US Bureau of Labor Statistics and, within the states identified, select counties that will
   experience significant job growth.
         ● Population Growth                  ● Job Growth



                                MARKET SELECTION PROCESS
VII. Open Discussion &
Concluding Statements
  Questions?
  Handouts
     Online Sources of FREE Institutional Research Reports
  Deal X-Ray


Next meeting…
Building & Managing Your Investment Team
Guest Speaker: Chad Hill, Dallas/Ft Worth GMAC REO Team
Extra Slides:
Determinants of Property Value
  The “DUST” framework.


  Determinant             Importance
  D emand                    2
  U tility                   1
  S carcity                  3
  T ransferability           4

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How to Narrow your Real Estate Investment Universe by Jon Strishak

  • 1. Multi-Family Investor Collective (MFIC) Market Research: Narrowing Your Investment Universe February 4, 2009
  • 2. Agenda I. Brief Prior Meeting Review & New Member Intros II. MF Investment Process Narrowing Your Investment Universe III. State & County Identification IV. City Selection V. Neighborhood Analysis VI. Summary VII. Open discussion & Concluding Statements
  • 3. I. Review of Prior Meeting & New Member Intros Review of Prior Meeting: Prepare Yourself for Multi-Family Investment Success New Member Intros Investment experience Why real estate investing? Short-term goal Something interesting about you Goal: ID one person who you may be able to assist.
  • 4. II. Multi-Family Investment Process Phase Investment Process PREPARATION 1. Prepare Yourself for Multi-Family Investment Success 2. Market Research: Narrowing Your Investment Universe 3. Building & Managing Your Investment Team BUY RIGHT 4. Mastering Multi-Family Investment Analysis: The Properties’ First Hurdle 5. Offer & Negotiations: Getting to Yes 6. Due Diligence: Verify—Do I Really Have a Good Deal? MANAGE RIGHT 7. Writing an Investment Management Plan: The Roadmap 8. Executing Your Investment Management Plan 9. Value Add: Practical Ways to Increase Property Value SELL RIGHT 10. Sell Right: Preparing Your Property to Sell For Top Dollar
  • 5. III. State & County Identification Population Growth, 1st Predictor of a Growing Market Invest Where People Are or Will Be US Census Bureau: Population Projections http://factfinder.census.gov • Decennial Census • American Community Survey • Population Estimates Program • Economic Census • Annual Economic Surveys
  • 6. III. State & County Identification Population Growth, 1st Predictor of a Growing Market Top 10 States Ranked by Growth Rate 2000 to 2030 4. Texas 3. Florida 7. North Carolina 8. Georgia 1. Nevada 9. Washington 10. Oregon 2. Arizona 5. Utah 6. Idaho Source: US Census
  • 7. III. State & County Identification Population Growth, 1st Predictor of a Growing Market Top 10 States Ranked by Growth Rate 2000 to 2030 4. Texas 3. Florida 7. North Carolina 8. Georgia 1. Nevada 9. Washington 10. Oregon 2. Arizona 5. Utah 6. Idaho Source: US Census
  • 8. III. State & County Identification Job Growth, 2nd Predictor of a Growing Market Invest Where the Jobs Are or Will Be US Bureau of Labor Statistics: Available by national/state/county/occupation http://www.bls.gov
  • 9. III. State & County Job Growth: Invest Where Jobs Are/Will Be Thousands of counties are now experiencing job growth… Example: Travis County (Austin), TX Positive Trend: Maricopa County (Phoenix), AZ Dallas County (Dallas), TX Dade County (Miami), FL Negative Trend: Mohave County (Lake Havasu City), AZ Hopkins County (Sulphur Springs), TX Brevard County (Cape Canaveral), FL Grand Canyon Dairy Capital of Texas “Space Coast” for JFK Space Center
  • 10. IV. City (MSA) Selection Review City/MSA multi-family indicators Review: Institutional ● Available Property Types Market Reports City Websites ● Vacancy Trends Masterplan ● Employment Trends Local News & Media ● Construction Trends ● Rent Trends ● Sales Trends Exercise: Institutional Marketing Reports
  • 11. V. Neighborhood Analysis Narrow down your investment universe to high growth neighborhoods. Ensure neighborhood is stable or improving. Look for growth drivers ● Development Review: Incentives City Websites ● City Planning & Masterplan Path of Growth Local News & Media Police Department Websites ● Crime Stats & Trends Zip Code Analysis Websites ● Transportation ● Employment Diversity / Sources ● Tenant Profile
  • 12. V. Neighborhood Analysis Narrow down your investment universe to high growth neighborhoods. Ensure neighborhood is stable or improving. Look for growth drivers ● Development Incentives ● City Planning & Path of Growth ● Crime Stats & Trends ● Transportation ● Employment Diversity / Sources ● Tenant Profile
  • 13. VI. Putting it All Together: Narrowing Your Investment Universe NEIGHBORHOOD ANALYSIS Review local media sources to narrow down your investment universe to high growth neighborhoods. Ensure neighborhood is stable or improving. Look for growth drivers. ● Housing Composition ● City Planning/Path of Growth ● Crime Stats & Trends ● Transportation ● Employment Div / Sources ● Tenant Profile CITY SELECTION Review institutional market reports to ensure market indicators are favorable. ● Available Property Types ● Vacancy Trends ● Employment Trends ● Construction Trends ● Rent Trends ● Sales Trends STATE & COUNTY IDENTIFICATION Review US Census demographic data and identify states that will experience population growth. . Review US Bureau of Labor Statistics and, within the states identified, select counties that will experience significant job growth. ● Population Growth ● Job Growth MARKET SELECTION PROCESS
  • 14. VII. Open Discussion & Concluding Statements Questions? Handouts Online Sources of FREE Institutional Research Reports Deal X-Ray Next meeting… Building & Managing Your Investment Team Guest Speaker: Chad Hill, Dallas/Ft Worth GMAC REO Team
  • 15. Extra Slides: Determinants of Property Value The “DUST” framework. Determinant Importance D emand 2 U tility 1 S carcity 3 T ransferability 4