You know the trends in the market, how to do financial models, and where to look for in terms of financing and structuring a deal, But how does one identify good RE investment opportunities without them being sourced to you ?
Do you go top-down.. looking at macro trends, identifying the market cycle in different markets/ countries ? ... Or begin be looking at deals currently on the market, and ways to make them work favorably ?
Read. Read a lot. Depends when in the cycle do you want to invest. If you want to be on the vanguard and invest in markets that you believe are untapped/up-and-coming then there's going to be more risk. You can look at recently closed deals in untapped/up-and-coming areas and ride their coat tails into the market. You can also look at markets where cap rates are already compressed (no longer an untapped/up-and-coming) market and look for B/C class properties to acquire with a value add/redevelopment strategy. Ultimately depends on the risk profile of your investors and targeted IRR of the fund.
What do you read or look at?
NREI is a go-to for most of us. Here is a perfect example: http://www.nreionline.com/multifamily/multifamily-assets-smaller-market…
The Economist for macro level/international trends. CBRE has troves of data at a high level based on asset class, location, etc. Crain's for happenings in Chicago. DNAInfo.com (only available for Chitown & NYC) for insight into demographics of certain neighborhoods. WSJ every morning. Once you identify an area of potential interest follow the local news station/newspaper on FB and sign up for the town's monthly newsletter (usually puff pieces sent out by the mayor, but good insight into infrastructure projects & feel good stories).
And I totally agree with DCDigger Google Earth is constantly open on my desktop.
our guys spend tons of time in google maps, looking at the path of development and identifying sites for potential development in the future. could be something 2 years down the line, or 15 years. keep a log of sites you like, who owns them, and basic data. maintain this log regularly. you'll find that just by knowing who owns everything, you will discover opportunities that the competition doesn't. i was at a dinner one night and randomly met a guy who owns like 4 properties i had been watching for years.
I'll skip all the filler and get to your question directly:
But how does one identify good RE investment opportunities without them being sourced to you ?
What you are asking about is relationships. On the principal side, real estate is largely about relationships. Sure, you can be Dr. Michael Burry and amass a Big Short once in a lifetime. But if you want to find a good real estate investment opportunity you have to be in touch with the local players and know their strategies. When their strategies fail, you can make a friendly call to a buddy and take the problem off their hands, thereby making yourself a small fortune. And potentially strengthening the relationship for the future.
Again, this is about people. Not so much data and markets. Want to know how to do it?
Never eat lunch alone.
This is great life advice in general.
Yes but killer on your waistline.
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