Some have wondered what the process is like behind the scenes as FIG looks for land throughout various markets. Questions include: What exactly do we look for in a market? What are some of the things we take into consideration before moving forward? What local market trends are most important to us and help shape our search criteria?
There's plenty of steps that happen before we spread the word to our network of investors. As a starting point... Here are 4 Key Focal Points of Picking a Market long before the plat records:
FOCUS #1 — Price to Rent Ratio
A large part of our philosophy revolves around the mindset of cash is king. In other words: we're in it for the rents. Our mindset going into market selection must be a little bit pickier on which market to choose from. We're not just looking for a good deal on land/builds, we're looking to maximize your rental income long term. So if the price doesn't make sense for what the local rent trends indicate, we move on.
FOCUS #2 — Operational Integrity
It's important that where ever we build, you can put your financial trust in the construction and quality of each build. We must understand the ins and outs of the property management as well, since they'll be the ones filling our units with cash flowing tenants. Both are the life blood of our investment, so this integrity is an important aspect of reducing risk of future repairs and vacancies. Both of are essential in the location we choose to invest in.
FOCUS #3 — Landlord Friendly
The third thing we look for when picking location is whether or not the state/city is friendly to landlords. It is important that laws favor the day to day decisions landlords have to deal with, especially in regards to evictions. If we can make the unavoidable evictions as smooth and quick as possible, we'll be able to reduce loss from vacancy.
FOCUS #4 — Diverse Metro Area
In many ways this focus is most important. The diversity found in each metro, especially over time, is a long-time reliable indicator of the future success of any real estate investment. We make sure to consider extensive data on the growth and stability of each local economy and whether the diversity of each job market is likely to foster the type of growth we are looking for.
Learn what markets we are currently working on @ fig.us/now-selling
Read through our carefully put together market reports @ fig.us/marketreports