Joe Fairless has asked over 1,000 real estate professionals across the country for their best advice ever on his daily podcast, the Best Real Estate Investing Advice Ever Show. In less than two years, he’s used this advice to amass an impressive portfolio of over 2,000 units worth more than $175 million. I had a chance to speak with Joe and he shared his top insights and tips to navigate one of the hottest markets in the country, his hometown of Dallas-Fort Worth along with his secondary market of Houston, Texas.
Focusing primarily on DFW, Joe has zeroed in on the growing North Dallas and North Fort Worth parts of the city. Though Joe targets the fastest growing metro in the U.S. with over 140,000 new residents added in 2016, it’s not just the explosive growth that drove him to DFW.
“It’s not about taking way too much time to pick the right market, it’s more about knowing your fundamentals and going with it,” says Fairless.
In addition to population and job growth, he looks at supply and demand, new construction permits and job diversity. And it certainly helps that he knows the market so well that he can look at a property’s address and tell you the school district’s high school mascot.
No matter where you’re looking to invest and the criteria you use for your strategy, Joe has a few tips to help vet a new market.
Joe’s Tips to Vet a Market
1. Conduct Online Research
2. Talk to Locals
3. Visit the Market
Begin with online research using Census.gov to learn about local population and job trends. Once you’ve gathered some online data, reach out to locals to learn more about the market and particular submarkets. If you don’t know anyone local, ask people on Facebook or check out sites like BiggerPockets.com or Meetup.com. Another great place to start is with economic development centers, brokers, property managers and other investors. Finally, visit the market and connect with the people you spoke with to confirm the information you were able to gather from afar. Joe stresses the importance of having local allies who can be your eyes on the ground, especially when you live in a different market.
With DFW’s explosion and rumblings that the multifamily sector is at a peak, Joe shared how he is taking precautionary measures to avoid being burned like many during the 2008 real estate bubble. His three-step process is to ensure the property cash flows from day one, leverage conservative financing such as a commercial 10-year, fixed rate loan, and finally enhance the property through value adds like updating units or lowering utilities.
"You might read in any given day that DFW is too hot, don't invest," Joe states. "We can't be influenced by the news of the day. We have to know what the fundamentals are and just stick to it."