In the past I've harped on about the importance of getting the macro right when it comes to real estate investing. But, once you've figured out your market and why you should be there, you move to the next level. What are the more micro elements that distinguish properties within your chosen market and create the opportunities - the home runs versus the bond deals. And a few off the top of my head...
-proximity to transportation hubs
-lack of amenities in an area that calls for them
-complicated liability structures
-unique floor plans
-pending zoning changes to surrounding areas
-constraints on new development
-discounts to reproduction cost
-unique legal issues to resolve
-condo exit strategies
Etc, etc.
As to the macro again, specifically for multifamily, I have spent some time recently contemplating the opportunities that exist at home (I've said before that I like frontier markets, but I'm not up and moving to Myanmar). So where will the growth happen here? Well, a resource boom is taking place in North Dakota, but that's no secret. In a more under-the-radar sense, I think the other boom that will come is derived from the expansion of the Panama Canal. Face it, this country is stagnating, jobs are a precious commodity. The more goods coming into a port, the more economic activity likely to follow in its surrounding environs. So, between warm weather, more favorable tax rates, and growing populations, the key port cities on the Gulf and southeastern seaboard are probably a good place to look. And, at that, focus on the downtowns -- don't get cute out in the hinterlands.
The other thing on my mind lately is how to monetize all the reading that I do. Because, to be honest, some of the stuff I take on is pretty arcane. And the conclusion I've come to (and hopefully it's not just a rationalization for what would otherwise be deemed a waste of time) is that it can give me an insight into the prevailing trends. A lot of my reads are about the economic theory of the dominant school of thought. And if you have a clue about what they're planning to do, you can try and plan accordingly. More to the point, every slice of mainstream economist is pushing for some form of greater stimulus and inflation, through deficits, money-printing and the like. If you see that, then you know greater liquidity is eventually going to come and should naturally benefit hard assets.
Now, you tell me, what would've been a clever title for this post?
