As with many new real estate investors, I have read just about every book on real estate investing (as well as attended a few not so cheap "bootcamps".) With all of this preparation I was anxious to do my first deal. Unfortunately, the market in Boston where I live is not currently very conducive to real estate investing so I decided to go to Plan B and look outside my own backyard.
As a backup, I chose to explore the Triangle area. I chose the Triangle initially for two reasons: 1. I went to Duke so I knew a little bit about the area and, more importantly, 2. the Triangle fits my definition of an emerging market.
When identifying emerging markets the most important factor I look for is job growth. With job growth comes population growth and ultimately greater housing demand. In addition to the demand side of the equation, I try to estimate the housing supply in the market. I look at factors such as vacancy rates, concessions and whether rents are rising, stable or falling. From my research the Triangle appears to have very strong job growth as well as rising rents making it a very attractive market to invest in..
While it is important to understand the macroeconomic factors affecting a market, it is equally, if not more, important to understand the nuances of the sub-markets. In my opinion, the only way to gain this knowledge is by visiting the market and working with folks like Deaton who know the market so well.
Having identified a target market, I now faced the challenge of not only doing my first deal, but now doing my first deal remotely. To overcome this barrier, I knew I had to build a team in the Triangle area. I decided the logical place to start was by identifying commercial real estate brokers. Initially, everyone I came across seemed to deal in large scale commercial properties that were well beyond my investment capacity. Enter Deaton.
I came across Deaton in an advertisement in the Triangle Business Journal. Deaton was the perfect fit for what I was looking for. Not only did they help me build a team of mortgage brokers, property managers, insurance agents, attorneys, etc., but they also shared all of their market knowledge and served as a process guide as I completed my first deal. Throughout the entire process I found Deaton to be extremely helpful, responsive, honest and hard working. I would strongly recommend them to anyone considering investing in the Triangle area.
In summary, in my opinion the Triangle is a great place to invest given the strong job growth and rising rents. If the Triangle fits your investment criteria then I would recommend:
1. Tour the market with Deaton to understand the sub-market nuances. 2. Build a team to support your deal locally. 3. Run the numbers to make sure the financials meet your investment objectives. 4. Find a deal and pull the trigger.
Bradley Dufour
Boston, MA
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