If you’re going to do something, then you have to be able to measure it. Neal Bawa has taken this idea and created a real estate empire, with over $250 million in multi-family properties. He teaches other investors his strategy on his website Multi Family University because, as he says, the people that are doing the measurements are the ones that are winning.
There are two kinds of stocks, a fundamental stock and momentum stocks. A fundamental stock is like a Warren Buffett stock, with strong growth. A momentum stock, on the other hand, is a little more like day trading. It has wild ups and downs, and everyone wants to ride it up.
There are cities that are like this too. There are momentum cities too, with great growth on paper, but their fundamentals are weak. Neal compares the cities of Cincinnati, Cleveland, and Columbus and how the data predicts people’s behavior during a recession in these cities. Coronavirus is cutting the leg out from under these momentum cities, and you need to know which ones are weak.
Measuring true growth is more than just watching the price of homes climb. Neal has the amount of growth required, down to the quarter percentage, of how much growth a city needs to show to be considered a good investment. What is true population growth, when the average American has two kids?
At some point, data has limitations. How do you measure the quality of a great property manager? If you’ve got a great team in place, that can change the outcome of your data, and that’s hard to plug that into an equation. Add the data and metrics about a city into your personal experience with that market before you make your decisions. Stop guessing, and start predicting with data.
- Real estate investors need to understand that emotion drives the data, and your profits.
- Even in the middle of Coronavirus, you need boots on the ground.
- Neal’s 5-minute tutorial on how to use Craigslist to look for properties during the pandemic.
- Why LoopNet is the best and worst place to look at properties.
- How to make a broker want to work with you ten times more.