Real estate is one of those areas. Even as a passive investor you decided to invest in real estate, you found the people you wanted to invest with, and you decided on an investment.
Today the hunt is on. We’re emerging from a very difficult year and deals are trickling back to the market. Everyone of us who has been hunting for deals is seeing them, and competition is heating up. Again.
This is a good thing, even though it will be getting harder to find a good deal as the year progresses. We love buyer’s markets when we’re buyers, but that’s usually a distressed market. We love seller’s markets when we’re sellers and those are strong markets.
Don’t despair because the market changes. If we’ve been in the market for more than a few years we know to prepare for the changes. It’s changing again now, and we are ready. Putting in offers. More broker discussions. Liking what we see!
If you want an early heads-up about our upcoming opportunities, let us know. Our deals have been filling quickly. The best investment opportunities are timely so it’s good to get a jump on them. Email me or schedule a call with me.
Market update
Jackson, Mississippi – Mississippi’s cities are small, and Jackson is the largest, with a population of 140,000 in the city and about 600,000 in the major metro area around the city.
The story of Jackson has not been positive for a long time, and the population trend reflects that. Population in the city itself has declined from 200,000 30 years ago, and census data identified it as the fastest shrinking city in the U.S. from 2021 to 2022, dropping 2.5%, and about 12% since 2017. This is especially unpleasant because a chart of population growth in Jackson from 1900 to today shows a sharp upward slope up to 1980. Then down and still declining.
Causes of the recent population drop have been in the news: a failing water system, drinkable water only from other sources, political and leadership conflicts that resulted in no garbage collection, and a homicide rate that placed Jackson at the top of the worst homicide rates in the U.S.
If you think it can’t get any worse, you would be wrong.
However – a big HOWEVER – these problems are fixable and the State of Mississippi’s laws and regulations favor business growth. There isn’t a Knight to the rescue, a big company or another major impactful imminent change in sight yet, but there is reason to believe this city has bottomed out and is poised to begin a new growth trajectory.
Start with the Infrastructure Investment and Jobs Act of 2021. Say what you want about it. A boondoggle, a climate change act, a waste of money. But the funds were intended for this exact purpose. It is a tragedy that city leaders in Jackson let such critical infrastructure fall completely apart and its citizens suffer such extraordinary hardship, but this happens. Now is when the rest of us put the pieces back together.
What makes Jackson a uniquely desirable place to live and work? Start with its moniker, the City of Soul, add in its status as a mecca for international ballet performances (did you know that? how is that possible?).
What real estate markets do you invest in? It is safe to say your best markets are cities whose cultural pride is at the top of their list of attractive qualities. It’s a huge reason why people are moving there. Not just jobs.
Jackson is no different. A strong cultural “soul” is a magnet. Growth in restaurants, entertainment, and arts point the way for paths of progress. Any company looking for growth opportunities focuses on quality of life as an attractor for future employees. Jackson has not lost its mojo. It’s just lost some focus.
Problems like crime don’t get better over night. Problems like infrastructure can not only improve quickly, but they can pull a city together, raise the city’s spirit, and create new energy that leads to investable opportunities.
Do you thrive on big opportunities that emerge from distressed markets? Jackson should have your attention.
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Getting the most out of your research skills
Are you a competent researcher? Of course you are. We’re all masters with our online search tools any more.
If you have been unsure how to apply those skills to real estate, first think about what you don’t know. The neighborhood, rents nearby, growth rates, demographics, good brokers, even structural (what’s the life of a TPO roof) that you might need answers to.
Be methodical and make notes about all the things you don’t know. Then take them one by one.
Let’s take the first one: neighborhood. You see a property you like that the broker said was for sale. What’s the neighborhood like? That’s a difficult search. You have to be as specific as you can but how do you do that?
Try a search for websites that track this data. I can name a few, like NeighborhoodScout.com and City-Data.com but these are not very granular. Try instead a search for how to find neighborhood information in that city. There might be local real estate brokers who research and publish this data. In other words, do a search to find out how to search for your information.
Talk to the professionals in that market. This could include real estate brokers and property managers but don’t overlook social media. Nearly every major city has Facebook groups for real estate investors. Search for those and join the larger ones. Search in those groups for the information you’re looking for. Post your question to the group. You’ll be pleasantly surprised with the responses, because real estate investors are the nicest people you’ll meet.
Utilize Google Maps and Bing Maps. They’re both good but Bing often shows better results. I can see more of the local businesses in a clearer view, which tells me a lot about the neighborhood. Are the businesses tattoo parlors or Starbucks? Liquor stores or Panera Bread? But there’s nothing better than Google Street View, even when the pictures are a year or two old.
I’ve seen aerial views of a property that show a pool but didn’t recall seeing anything about a pool in the broker’s information, then find out they had one but filled it in. So be aware that these things change.
Looking for a contractor? We recently had a need for someone to repair outdoor stairs. A Google search was practically worthless because there were so many ads and the contractors who appeared first in the results were big, more generalized, and expensive. I joined a Facebook real estate group, searched those posts and comments, and quickly found several.
I like to find local people who can perform light services at a property, even when we have third party management. I might want someone to come by weekly to pick up trash and take pictures. This has helped me many times, calling out mattresses and sofas left next to the dumpster, broken windows, tenants washing their cars, and any other general observations. I look for people who I think are reliable and inexpensive, and I don’t usually like to hire tenants for this purpose.
One guy I hired was having some problems. He was former law enforcement so I trusted him. My wife asked me his name. She went online, looked him up, and found criminal convictions for him. This was years ago but such a simple online search I could have done, but skipped. Never again.
Any of us can get very good at online research. A more experienced friend or family member can be a valuable resource, but then it’s up to you to pick it up and run with it!