How to Underwrite a Multifamily Market

by Anna Myers | Commercial Real Estate Pro Network

Anna:  If you’re looking to have tenants, which if you’re an investor, you want people to live in your places. Well, those people need to have jobs.

If you’re in markets where population is decreasing or job opportunities aren’t numerous enough or they’re dependent perhaps on overly-dependent on one business, one company, then that is very problematic.

I have learned to really, really focus on looking at job numbers and population numbers.

Announcer:  Welcome to CREPN Radio for influential commercial real estate professionals who work with investors, buyers, and sellers of commercial real estate coast to coast. Whether you’re an investor, broker, lender, property manager, attorney or accountant, we’re here to learn from the experts.

Darrin:  Welcome to Commercial Real Estate Pro Networks, CREPN Radio. Episode #192. Thanks for joining us. My name is J. Darrin Gross. This is a podcast focused on commercial real estate investment strategies. Weekly, we have conversations with commercial real estate investors and professionals who provide their experience and insight to help you grow your real estate portfolio. Let’s get into the show.

Today, my guest is Anna Myers. She is a Vice President of Grocapitus. She teaches underwriting for MultifamilyU and cohosts a real estate investor Meetup in the San Francisco Bay Area. With an extensive background as a programmer and systems architect in the tech industry, she used these skills to evaluate multifamily deals and identify key investment markets and implement systems and processes to acquire and manage multifamily assets.

And has also partnered with Neal Bawa and together they have over 500 units and are projected to add another 300 here in the first quarter of 2019.

But before we start with Anna, I want to remind you, if you like these shows, CREPN Radio, please let us know, we’d love to hear from you. You can like, share and subscribe and leave a comment. We, again, would love to hear from you.

Also, if you want to see how attractive our guests are, please check out our YouTube Channel, Commercial Real Estate Pro Network. With that, I’d like to welcome my guest, Anna. Welcome to CREPN Radio.

Anna:  Thank you. It’s really great to be here on CREPN Radio.

Darrin:  I’m delighted to have you and before we get into our topic today, if you could just take a minute and share with the listeners and myself a little bit about your background.

Anna:  Sure. I started in commercial real estate—well, I started in real estate purchasing in 2006 and I was working—actually I’m a businessowner at that time and I was trying to reconcile how much taxes I was paying, so I started investing in real estate to help get some more depreciation and solve my tax situation.

That actually worked out really well for me and so that solved my taxes, but what I realized is my job that I had wasn’t scalable. In looking at real estate and realizing that I needed something more scalable as my next thing in life, I moved into real estate. I decided to move into real estate full-time. I sent a five-year plan for myself in terms of dedicating myself to pulling back on my business and pushing forward with my real estate.

I carved out time, because I worked seven days a week between the two careers for many years, and eventually succeeded in closing my previous business and going to real estate full-time.

Darrin:  Got it. When you started, were you doing more single family? Is that what I—

Anna:  I was. I was doing single family. I did some land deals. I’ve got like some small multis, so a variety of things. I live in California, so I was always investing out of state. Which for me, I guess from the very beginning, I was very focused on markets. How do I know those markets? I’m not going to be able to live there. It’s too expensive for me to invest where I am in the San Francisco Bay Area, so I needed to find places out of state to be able to invest in. That’s been kind of a—for a very long time, that’s been a focus of mine. I’ve gotten pretty good at it.

Darrin:  Awesome. Markets, and that’s what I was hoping to drill down with you a little bit and talk more about kind of your process and what it is you look for. I think a lot of times in the media market or the real estate market is assumed to be one market, when I think most investors recognize that where you are or the town or metro areas, it’s own market kind of thing, can you share with us some of the things that you look for? I guess, some of the tells, if you’re going on a search for a market. What are some top indicators you would look for?

Anna:  Sure. Some of the things I look for, the top two are jobs and population. Population growth and job growth. Those are very, very key metrics. If you’re looking to have tenants, which if you’re an investor, you want people to live in your places. Well, those people need to have jobs.

If you’re in markets where population is decreasing or job opportunities aren’t numerous enough or they’re dependent perhaps on overly-dependent on one business, one company, then that is very problematic.

I have learned to really, really focus on looking at job numbers and population numbers and you can find these numbers on the internet. The census that they do regularly provide these numbers and cities and states also regularly deliver this information. It’s not hard information to come by in a free format.

In addition to looking at population and jobs, I also look at rent growth. We look at quarter by quarter, as well as year over year, and then we look at the forecasting of rent growth.

We drill down at the neighborhood level once we’ve identified markets. I also look within the markets at neighborhoods. Once you’re getting down to the neighborhood, we look at median household income. That can be a really important factor because you want to make sure that your tenants can afford to pay you and if they’re not making—for example, we found that the key metric for us is $40,000. If you’re median household income of the area—this is a general area that’s not highly populated with college students, I want to say that, then $40,000 is kind of a key number that you can hope highly and it usually will hold true, that your tenants will pay you 12 months out of the year.

If instead, you’re in an area where the median household income in that neighborhood is $28,000, well, there’s a good chance your tenants cannot afford to pay you 12 months out of the year. You’re going to have higher delinquency, higher bad debt, and potentially more evictions and everything that goes along with that.

Even if you find a great market, you then have to drill down and make sure that the neighborhood within that market is going to substantiate your business plan, which of course, for an investor, means getting paid—that if someone is living there, that you need to get paid for it.

Darrin:  No, that’s awesome. I love that you shared an actual number.

Anna:  Yeah.

Darrin:  I think so many times we get into these conversations and people say, “Yeah, it’s going up, it’s going up,” but if it’s gone from 0 to 1, that might not be enough of a go.

Do you have any kind of a minimum population that you look for?

Anna:  Well, that’s a very good question and I do get asked that a lot. I could say, yes, we want 500,000 and above, we want a million and above, but here’s the thing:  When you’re looking at markets, you need to look at the markets that are close to that market. If you’re looking at a market and you’re not necessarily that familiar with it and you’re like, “Oh, that market only has 250,000 people, that’s too small,” but that market is 20 minutes away from a market that has tons of jobs and that’s 750,000, we definitely consider that because we’ve had properties that have done really, really well that are near power-block cities. If they are 15-20 minutes away, you really have to take it with a grain of salt.

I’d say that there are certain areas, like, for example, Boise, Idaho, or Salt Lake City or Provo, these are some cities that we like a lot. We are willing certainly to look at some of the surrounding areas and say we’re  open to some of the smaller populated, little neck of the woods around there, because they are an easy drive to these power-block metros that are just churning out jobs.

That’s what I would say. You can’t just look at the numbers. You have to look at the location and its correlation to places that are delivering the goods.

Darrin:  Got it. You mentioned distance. Is there any kind of a radius that you would cap at? I mean, 15-20 minutes seems reasonable.

Anna:  Yeah, that’s also a great question. I would say a maximum of 30 minutes’ drive time, because I say that because traffic varies a lot. A 30-minute drive time, it could be 30 miles, or it could be 15 miles if there’s a lot of traffic in that metro. That seems to be a good number. Once you get beyond that, your rents are really going to start going down further and further. People that live 45 minutes out from the city aren’t going to pay as much as people that are closer that don’t have to drive as far. Public transportation also would be great if you have easy access to public transportation going to the jobs in that city. Multiple ways to get there would be ideal.

Darrin:  You mentioned jobs and employers. Obviously job growth is awesome because then if you’ve got more jobs and more income, then you’ve got more ability to pay. Is there any kind of a sector or types of employers you’d like to see as a base?

Anna:  Yeah. That is a really good question as well. Before I answer what ones we like to see, I will tell you that we like to see a big—if you imagine a pie, we like to see a lot of different sectors in that pie. As many sectors as we can and with those different sectors being as evenly distributed as possible. We don’t want a place that the majority of that pie is one section, and, for example, it is government or whatever that is. Military markets are doing really well right now, but how are they going to be doing four years from now? They kind of go up and down depending on their budgets. Those can be a little tricky.

Construction can also be tricky because it depends on how that market is doing. But one business type that does very well and we’re always happy to see is healthcare. Healthcare is needed everywhere. You’re never going to get away from it and it has a lot of high quality jobs.

But you really should take the time to look at markets. They surprise me when I look at them and I have even built in assumptions about such-and-such city, that’s lots of military. For example, Jacksonville. We just invested there. We just bought an apartment building with our operating partners in Jacksonville. I was surprised. I thought there was a lot more government and military there, but the pie was just every shade of the rainbow and pretty evenly distributed.

Markets like Jacksonville, that are growing from all kinds of different sources, are really ideal.

Darrin:  I appreciate you sharing that because I’ve heard people talk about you want at least a couple of major employers, and I’ve heard it said elsewhere, you can kind of insulate yourself from up and down if you have a wider dispersion of employers and of different category of employers. That’s good.

You mentioned rent growth projections. I want to tie this also to like housing stock, whether it be—I’m presuming are you guys primarily buying B and C assets?

Anna:  We buy class B and class C multifamily that’s value-add so that we can renovate, force appreciation, and deliver returns for our investors. So, yes, B and C.

Darrin:  In that, how much do you guys look at the new construction? Kind of the growth of the housing supply and then with that—okay.

Anna:  That’s very important to look at. How much new construction is being delivered into a community is really key. However, you have to understand that class C gets hit less than class B when you have a lot of new or class A construction coming in. We prefer to see very little construction. When we’re evaluating a market and looking to go in there, we then of course look again at the neighborhood where the property is located and see what’s been delivered in that neighborhood in the past, say three years, and then what is going to be delivered. Because there’s ways to know that because they’ve already, put their permits in. They know what’s going to be built in the next few years.

You definitely want to look at that but understand class A is going to get—when a bunch of new class A comes in, class B gets hit first because the people that are in B, the class As, if they lower their rents enough, they can attract those class Bs with concessions and lower rents just to lease up their building. Because that’s what they need to do, right when they finish, they’ve got to lease up.

The class C tenants aren’t necessarily going to be able to bridge that gap to get up to that rent space. They’re impacted less, but they will also be impacted because then the class B is going to start going down and trying to pull from the class C. Everybody is going to get impacted, but the class C overall will get less impacted than the class B. All that to say that we do look very carefully at the incoming construction because it is a concern.

But you have to look at the type of construction. For example, we’re finishing up a purchase of a property in Tucson, Arizona, another fantastic market, I might add. There is new construction coming in. It’s about four or five miles away from the property. At first, you’d say, “Oh, this is no good,” but when you look into it, it’s all student housing. It’s purposeful-built student housing being built right around the university.

Well, that’s not our market. That’s not our tenant. You do need to dig a little deeper to say, “Yes, it’s new construction, but who’s it for? Is it really going to impact my tenant base? Who is your demographic as a tenant?” That’s one thing everybody would need to put on their tenant hat and say, “Who is going to live here?” Then evaluate whether that new construction really is going to be stealing from your tenant pool.

Darrin:  Got it. Do you look at new-starts for single family at all?

Anna:  We don’t.

Darrin:  No? Okay.

Anna:  Now I’m a multifamily convert. I only do multifamily. I’m a big believer in numbers and the power of being able to control your net operating income and force the appreciation, decrease expenses, and then the magic of dividing by that cap rate and having your building be worth millions of dollars more than when you bought it.

I don’t see that happening with single family. Your value with single family is worth as much as your neighbor’s is.

Darrin:  Right. I guess what I was trying to point to was, is there any information you guys look for as to if maybe there’s—

Anna:  How we compare in the market? How do we look at the cost of—

Darrin:  Yeah, or if there’s all of a sudden new, low-cost development, single families that could possibly suck out of the—

Anna:  Yeah. What we look at in regard to that is the price-to-rent ratio. You have the price to rent versus the price to own. There gets to be a point where it’s—you want to be in the area where housing is a little bit outpriced for your renter, so it’s not easy for them to own.

In markets where housing is very, very cheap, and some of those markets have really high cash flow for tenants, but when you realize that your tenant can very easily become a homeowner, then that’s riskier. There is a Goldilocks-zone for the price-to-rent ratio, which is about 14-22. Okay?

If your price-to-rent ratio is in that area, that’s a great area to be in. If it’s below 14, like I think Memphis might be like 11. Some of these markets like this are pretty low, the cost of housing to purchase a house is very low and you could be losing tenants to that.

If it’s above 22, then you’re getting into very expensive markets where you might not be able to make your cash flow work because it’s so expensive to buy those buildings. Those are going to be lower cap rate areas, so it’s going to be harder for you to make your rents. Not that the people can—it’s just class C, forcing appreciation, that 14-22 is your Goldilocks-zone.

Darrin:  Right. Can you briefly describe how you calculate the price to rent? I mean, are you taking the—

Anna:  The price-to-rent ratio is basically your rent—okay, you take the rent, multiply by 12, right? To annualize it.

Darrin:  Right.


Anna:  And then you divide it by the home price, the average home price.

Darrin:  Gotcha. Same then for the price to own there, or I guess the payment, what their mortgage payment would be.

Anna:  Just the average, the actual home price, the average price of a home. What is the median cost to buy a house in that area? You look at the median rent x 12, so you’re annualizing the median rent, divided by the median house cost.

Darrin:  Gotcha. All right. That’s helpful. We’re talking about growth, forecasted growth, forecasted rent growth, are there some percentages you guys like to see as far as minimums or is it just a direction or a trend?

Anna:  Sure. We like to see high rent growth numbers forecasted, of course, but we’re always very conservative with those numbers. We have a mechanism where we look, we have a paid service that we subscribe to and it is forecasting home growth, home price growth for the next three years, and so we have a method that we use of looking at those numbers and extrapolating what the rent forecast would be in those markets.

However, no matter how good the numbers are that we end up with, we never use above 4% and we would only use those numbers for the year 1, year 2, and then year 3, and then after that, we don’t forecast after year 3. We just use a flat 2-1/2%.

I might start out with if it’s a very good market and say this calculation that I do comes back with 7-1/2% rent growth, I’m going to use 4% that year, because I’m not going above 4. And then the next year, it was 3-1/2 and then 3-1/2. We do this phasing thing.

But those numbers are really, again, tied to the housing market and what the growth of the housing market and a special sauce we use to extrapolate that data.

Darrin:  As far as rent as a percent of income, I thought you’d mentioned—or maybe you didn’t—is there a percentage rent to income that you look for?

Anna:  You mean, that our property managers—oh, what rent do we look for when we’re purchasing?

Darrin:  Yeah.

Anna:  We don’t like the median rent of the property to be below $800. Okay?

Darrin:  Okay.

Anna:  You could have some studio apartments that could be 650 and then you’ve got your 1 bedrooms, your 2 bedrooms, your 3 bedrooms, so I understand that your studio apartments are 650. It doesn’t mean it misses the mark. That’s why I say the median across the building. I’d say $800 is our median.

Once you’re below that, you’re kind of dealing with, again, a tenant base that you may not get your rent as often.

Darrin:  I was looking, you had indicated 40,000 was kind of a—

Anna:  That’s the median household income.

Darrin:  That you guys look for, yeah. Got it. Let me ask you this:  When you’re looking at all these indicators and presumably you’ve got some insulation from changes, are there any dynamics that you, or some tells, that you have learned to look for, if something is changing that might tell you that things are changing from where we thought they were or is that basically just paying attention to the same factors you’ve used to underwrite your market?

Anna:  That’s a really good question. When we’re trying to find the progress within a metro that we like, one of the things we look at, and we use free tools like City Data to do this. You can go to the map on City Data and within the metro, it shows you the different census tracks and you can pinpoint into those different census tracks and see what is the median household income. We talked about that already. But then you can also see what is the housing price. Then you can look historically to see—there’s a way you can shift it back and forth to see what was the housing price 10 years ago or in 2000, so you can see trends.

What you’re looking for are areas that the price of housing, the median household income has gone up, but the price of housing has not yet gone up. These are people that are getting paid more because the jobs are coming—wherever they’re getting their jobs from, their income has gone up but the housing in that neighborhood has not yet gone up.

What we found is, as a trend, the cost of that housing will go up. If you’re able to buy in those areas before the housing goes up, that is a path of progress indicator. There’s ways, again, that you can use We have some webinars that teach you how to do it, where you can use that map and by switching some different levers around, you can literally see a river, a path of progress through the city.

I have to be like showing the map to show people how to do it. It gets a little further into it, but the answer is yes, there’s things to look for to know where to buy and where the changes are coming. You can clearly see them.

Darrin:  That’s great to, again, drill more into the neighborhood and the street and get more finely tuned there.

Anna:  Then I guess the same thing, you can be looking at the larger markets and looking at trends of where things are going. Sometimes you’ll have some sleeper markets. We see the big power-block markets going on and those are kind of all in our face. We try and also look at those emerging markets that are making movements on our spreadsheet. They’re popping in and out, they’re changing gears, and then we can look at those and try and keep track of what’s going on.

One area that we really like is in Florida. There is a road there, a highway there that goes between Delton to Tampa and includes Orlando along the way. One of the markets that’s targeted by many people for huge growth this year, in 2019, is Lakeland, Florida. That is right in between Tampa and Orlando. If you think about it, people that are living there, they have the option of working in two different power-block cities. Even though it’s an hour, so that Lakeland is an example of a sleeper city that you just have to watch and go like, “Wow, Lakeland, things are happening for you.”

But that whole corridor there is really impressive, so that’s definitely a place to look at. Then you can actually look off of this. We’re noticing trends that is not just a straight line now. There is almost a web that’s being developed in that area. It’s like a network of little cities and roads that are really, again, it’s because this area is bordered by Tampa and Orlando and then everything in between is really starting to tick up beyond this web feature that’s going on.

The line is even becoming longer, so it’s extending beyond Tampa, down along the coast towards Fort Myers and these other areas. If you pay attention to the statistics and metrics and different jobs and metrics, reports that come out, you can start to see these changes happening

We collate a lot of this stuff on spreadsheets and then I keep track of the tabs and you can pretty clearly see things kind of popping in and out.

Sometimes, by the way, we ignore outliers. We talked about markets and places that have single employers. If you use these metrics that I’m talking about, especially jobs and population. You might see places like Odessa, Texas and Midland, Texas jumping off the page at you. But then you have to qualify that to say those are predominantly oil places. We don’t invest in those places because while they might be at the top of the spreadsheet this week, in two years they could be at the bottom.

We avoid those places that jump too far around our spreadsheet. When something is moving around on the spreadsheet, I try and dig in and say why? Why is this moving? What’s happening? Is this just a blip? Suddenly their job numbers drop for a quarter. Is this just a blip or is this a trend? Is this going to be an ongoing trend?

Darrin:  Right. Is it amazing when you are looking at the numbers and you can see the numbers, the movement, and you can drill down into it and kind of isolate what’s the cost or be that much more aware as opposed to—it’s a pretty city or something, but to really understand what’s driving is the beauty of the numbers like that.

Anna:  I have to say, that’s what I used to do when I first started out, because I was investing out of state. You go to a place and you go, “Would I live here? Do I like this city?” That’s not relevant. I just have to say. It doesn’t matter if that city has your politics. It doesn’t matter if that city, you know, how pretty it is. Look at the numbers. If you’re an investor, you got to look at the numbers.

Darrin:  Yeah. I could talk to you for a long time about that and some near misses on our part here as investments go.

Anna:  I actually want to add about the landlord-friendly states is very important. There are different markets that are not landlord-friendly, and you might love to vacation in those places, but it’s really important that you pay attention to the laws of that state and of that county.

If you get caught in a market where it takes nine months to evict somebody, you’re out a lot of money and there’s tenants in those locations that are what we like to call professional tenants. They know the rules. They will be in your place, not paying you rent for nine months. That really, really hurts your bottom line.

We focus on states and counties that are more supportive of A) Business and B) Landlords. That’s one of the reasons we invest in places like Georgia and Florida and Tucson, that I just mentioned, in Arizona, Arizona is an extremely friendly for business, as well as landlords. It only takes 14 days to evict somebody in Arizona.

Darrin:  Wow.

Anna:  Those are remarkable numbers. That’s like stunning, right?

Darrin:  Yeah.

Anna:  Then what that leads to on the tenant side is they know they’re not going to get away with it, so it doesn’t make sense to be a professional tenant in Arizona. If somebody is down on hard times, the landlord could decide to work with that person, set up a payment plan, but you don’t have this tribe of professional tenants trying to live for free off of you for nine months and then just moving onto the next building.

Darrin:  Yeah. You would love to see the front page of the Oregonian today. We’re working to pass statewide rent control.

Anna:  Yeah, I have two units in Oregon and they’re for sale. [Laughs]

Darrin:  It’s a long conversation, but it’s interesting where the legislature is reacting to a market condition that happened almost ten years ago. It doesn’t make any sense.

No, I didn’t realize 14 days in Arizona. That’s an attractive—

Anna:  It’s very attractive. And, by the way, in terms of shouting out to Arizona, the property taxes are very low in Arizona. Great to look there. Phoenix is very overheated right now. Great market, by the way. Phoenix is a great market. Hard to find anything that makes sense, so start looking at Tucson. Tucson is an example of a sister city that is getting the benefits of Phoenix, but since everything is too hot in Phoenix, Tucson is really starting to tick up. It’s kind of like how San Antonio is getting the advantages of Austin or Sacramento, which is the top rent growth in the nation, is getting the advantages of the San Francisco Bay Area.

Looking at these sister cities and maybe not going for the big hot metro but go for the sister or brother metro to that.

Darrin:  That’s great. I looked down my list of things, you’ve kind of gone through them pretty thoroughly here.

Anna:  That’s good to know.

Darrin:  I appreciate that because I had written down some kind of notes and stuff as far as different types of things, when we’ve talked about the size of the metro area, the number of employers. The types of jobs. I mean, you’ve provided percentages, actual numbers. That’s great.

Is there anything on, just if somebody is looking on the front end of the market that we haven’t discussed that comes to mind that you would like the listeners to think about?

Anna:  Let’s see, we talked about population, job growth. Obviously, unemployment rates are important. They’re low everywhere, but you don’t want, when you’re looking—again, I’m going to go down to the neighborhood. When you’re looking at a neighborhood within a market, you don’t want your unemployment in that neighborhood to be higher than that unemployment for the city.

If your city has an unemployment rate—and you can easily find the unemployment rate just by Googling it. Unemployment rate, Tucson, Arizona, or whatever city, and Google will spit right back at you what the answer is. If the unemployment rate was 6% in the city, you don’t want to go above 2 points above the city’s unemployment. You can go up to 8% unemployment in your area, but if that building in that location is saying 10 or 12% unemployment—ding, ding, ding. Again, that’s the delinquency problem that we talked about.

We’re investors, we need to get paid for people to live in our places. The more people aren’t able to pay, the more problematic it is for us as investors. I take that very seriously, because we’re using other people’s money partnered with us to purchase these buildings. It’s up to us to really be careful of where we place our investor’s money and to make sure that it’s the best possible investment.

Darrin:  You mentioned unemployment. I wanted to ask kind of a related question. Occupancy, is there any kind of—or maybe more of a vacancy rate in a marketplace that would be like a line that you would say yay or nay on?

Anna:  We like places where occupancy is like 95% and above, for sure. Would I consider markets that are lower than 95%? I’d need to understand why. Right now, we can pick—there’s so many strong markets right now, so we might just be fortunate, but if I had a place that was 92% occupancy, I feel like we might struggle a little bit to keep the occupancy up.

You have to remember that there’s the physical occupancy and then there’s economic. You’ve got physical vacancy and your economic vacancy. Your economic vacancy is always going to be lower by some percentage than your physical vacancy. If you’re already starting out with a high physical vacancy, and then your economic vacancy is going to be pretty significant.

I’d much rather be in markets that have a 95%, maybe 94, 95% as your occupancy. We’re talking at that point, 5-6% vacancy as your maximum, so then you’ve got a little room to move on your economic vacancy.

Darrin:  That’s good. Anna, I want to shift gears here for a second, if we could.

Anna:  Sure.

Darrin:  As we mentioned or we discussed briefly before we started recording, by day I’m an insurance broker and one of the things we do is we try and manage risk. Essentially there’s three strategies that are common. One is to avoid the risk, the other is to minimize the risk and then the third is to transfer the risk, which is essentially what an insurance policy is.

Anna:  Okay.

Darrin:  Along those lines, I’m asking all of my guests if they can identify in their investment strategy or if they can apply or look at what they’re doing and identify what they believe to be their biggest risk. Can you look at what you’re doing or perhaps what we’ve talked about today and identify what you believe to be the biggest risk?

Anna:  Well, as a person who studies markets and uses other people’s money to invest, I think one of the biggest risks is not understanding your market well enough and not going into a market that really supports the rentals you’re trying to project and the growth you’re trying to project.

The markets are going to change. The economy will change. The markets will change. We like to go in markets using data science where we can show, there are jobs here, there are population there. That’s going to give you some padding. We like to have that padding there because if we make any mistakes as operators of that building or if the economy changes and there’s a shift in the market, we’ve got some padding to help.

Whereas if you’re in a market just for cash flow and you have no underlying strong fundamentals in the market of jobs and growth, you don’t have any padding. That’s a much bigger risk that you’re taking. If you make a mistake, the markets can’t help you out. The market can’t help you with that risk.

That’s how we like to mitigate our risk, is again, by relying on the data science and underlying fundamentals of what makes a strong market. We can’t force appreciation. I mean, we do force appreciation, but we don’t rely on the market to be appreciating. We just go in strong markets.

Darrin:  That’s great. Again, kind of the reiteration of the ability to force appreciation in your property, but not rely on the market to life you up.

Anna:  Right, exactly.

Darrin:  Yeah, that’s great. Anna, where can the listeners go if they’d like to learn more or connect with you?

Anna:  They can find me on, is where I teach. There’s a lot of webinars that we do there regularly. I teach underwriting once a month there. I also teach a deep dive into underwriting in a quarterly bootcamp. If people would like to get more information about a lot of the stuff that I’ve been talking about and how to do a deep dive and find out more on their own about all these reports and stuff that we read, you can text RETOOLKIT to the number 44222. Again, that’s all squished together, no spaces, RETOOLKIT, and you’ll get access to a webinar that talks about trends, it talks about markets, and then it has all this information that was used to make up that report.

Basically, we’ve got lots of great content online. My email address is That’s A-N-N-A at G-R-O-C-A-P-I-T-U-S dot com.

Darrin:  Awesome.

Anna:  I imagine you’ll probably have that somewhere on this.

Darrin:  I’ll put it in the show notes.

Anna:  Because everybody misspells Grocapitus.

Darrin:  Right. No, we’ll put that in there.

Anna:  You should definitely check out that toolkit, it’s phenomenal. We change the information that’s there all the time, so all those industry reports that are used to understand what markets are shaken, all that information we put in that toolkit and we keep updating it every month.

Darrin:  I’ll be sure to check that out and we’ll list it all there in the show notes so the listeners can do so as well.

Anna:  Yeah, great.

Darrin:  Anna, I can’t say thanks enough for taking the time. I’ve enjoyed talking with you and learned a lot. I hope we can do it again soon.

Anna:  I do, too. Thank you very much. It’s been a great time spending the afternoon with you.