The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

Volucci says to find apts in weak markets due to overbuilding...

SteveO

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
456%
Jul 24, 2007
4,228
19,294
Re: Volucci says to find apts in weak markets due to overbuilding

This would make Florida and California great places to invest if you only look at this data point. Vollucci is investing in Florida. I think it is too early.

The question for me is what will be the main driver to begin filling units again. As it is, these areas are still selling on very low cap rates and high cost per units.

The perfect storm for me is overbuilding followed by great job growth. I want to buy early in that job growth cycle.
 

ryanpal

Contributor
Read Fastlane!
User Power
Value/Post Ratio
6%
Jul 26, 2007
360
21
nj
Re: Volucci says to find apts in weak markets due to overbuilding

Hey SteveO. Just to clarify, I wasn't mentioning looking at this point only, but rather to start "researching" in these markets since this was one of the main point he stressed in the book.

My boss (the one who lent me the book) suggested Iowa. I'm myself haven't researched this area yet, nor do I know the extent of how much he himself has. At any rate, for sake of argument....any comments on Iowa or any possible areas in which you see as candidates for future investments? (if that's private no worries)

Ryan
 

SteveO

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
456%
Jul 24, 2007
4,228
19,294
Re: Volucci says to find apts in weak markets due to overbuilding

Can you post any information that you get on expected job gains as a result of grain energy?
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Diane Kennedy

Bronze Contributor
User Power
Value/Post Ratio
25%
Aug 31, 2007
780
193
Re: Volucci says to find apts in weak markets due to overbuilding

Can you post any information that you get on expected job gains as a result of grain energy?

Whoa! What a great question SteveO. I hadn't even considered what that could do to the grain growing regions.

I'm interested as well.
 

andviv

Gold Contributor
Read Fastlane!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
40%
Jul 27, 2007
5,361
2,143
Washington DC
Re: Volucci says to find apts in weak markets due to overbuilding

I don't know what grain energy or grain growing regions mean... somebody help please, I'm not familiar with that term.
 

Bilgefisher

Bronze Contributor
Read Fastlane!
User Power
Value/Post Ratio
17%
Aug 29, 2007
1,815
308
Aurora, Co
Re: Volucci says to find apts in weak markets due to overbuilding

I don't know what grain energy or grain growing regions mean... somebody help please, I'm not familiar with that term.

New ethanol fuel is produced from corn and wheat. Hence grain energy. The breadbasket in America is seeing the prices of their crops soar as a result.


This thread brings up an interesting point. What sources do you use to research an area? Does area still matter that much is you are doing a valueplay on a complex?
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

SteveO

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
456%
Jul 24, 2007
4,228
19,294
Re: Volucci says to find apts in weak markets due to overbuilding

My experience has shown that location improvements will typically get better results than the value play. But, I want both.

Every area is going to have up and down cycles with occupancy. These cycles have a lot to do with the ability to land a good value play deal as well.

It will be difficult to land a good deal in an area that has a high demand because there will be competition from other buyers. Apartments will sell for higher "proforma" projections. It is also more difficult to locate the mismanaged properties in locations that have strong occupancy.

This is not the case in an area that has been overbuilt or has had a dip in occupancy due to job losses. A five percent dip in occupancy is generally a lot higher in terms of revenue drop. 10% vacancy can easily lead to a 20% total rent loss. Mismanaged properties with 15% or greater vacancy can be in real trouble as a result. There are usually less buyers in this market and sellers get desperate.

If this location shows a promise in near future job growth, it may be that diamond that you are looking for. Find a poorly managed deal and ride the occupancy wave for maximum wealth building.
 

Bilgefisher

Bronze Contributor
Read Fastlane!
User Power
Value/Post Ratio
17%
Aug 29, 2007
1,815
308
Aurora, Co
Re: Volucci says to find apts in weak markets due to overbuilding

Thank you JScott and Steve for the answers. I kinda figured take the best of both worlds, but I wanted your opinions.
 

ryanpal

Contributor
Read Fastlane!
User Power
Value/Post Ratio
6%
Jul 26, 2007
360
21
nj
Re: Volucci says to find apts in weak markets due to overbuilding

Can you post any information that you get on expected job gains as a result of grain energy?

this flew over my head :smx4:

....good responses all. some great foundation of knowledge im gaining.

ryan
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

BeingChewsie

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
113%
Aug 27, 2007
438
497
Phoenix, AZ
Re: Volucci says to find apts in weak markets due to overbuilding

New ethanol fuel is produced from corn and wheat. Hence grain energy. The breadbasket in America is seeing the prices of their crops soar as a result.


This thread brings up an interesting point. What sources do you use to research an area?


I use most of the resources in the Vollucci book. I use the internet and go to the government site for the MSA and look for the economic development person/people, contact them. I go to their chamber of commerce wesbite and I have found just putting the MSA name followed by forecasted employment growth through 2009 or 2010 brings up a wealth of information. I have found that the local universities usually put out an employment/economic forecast for their MSA. I read the local newspapers and trade papers...you can find them online. I look at the raw numbers put out by groups like Marcus and Millichap, REIS, and Toronto-Wheaton. Sometimes it is something like a headline on yahoo that will lead me to an article that will lead me to another and pretty soon you start to get a picture of an area. I can give you two examples this weekend of articles that I followed..one was on aol about ..what RE markets are set to fail?..it was about the correction needed to bring prices more back to reality in certain areas. This led to me looking at their data which included a 5 year forecast on rent % increases in 54 MSA's. I decided to look into some of these areas and see what was occuring/projected to occur to fuel those increases. The second article was about the most wired cities..an interesting slide show that led to others that highlighted families migrating in droves to certain areas and bringing in business and jobs etc. I hope this is helpful!
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

Latest Posts

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top