Emerging Real Estate Markets
Objectives
Recognize and Profit From Emerging Markets
Value Add Through Micro Repositioning
Other Factors
In The Beginning……
3 - 6 Families in Boston
Emerging Markets
Northeastern U – Economics
Harvard Business School – OPM
Portfolio of 8,000 Plus Units
Largest Residential Deal In Texas 2014 - 5,220
Units
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
BMI
SMII
BMI
SMI
BMII
BMII
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
Sellers Market Phase I
 Supply of Property Dwindles
 Foreclosures start to decrease in number
 Properties Sell Fast
 Unemployment Low
 Prices/Rent Rising
 Speculation in full swing
 Construction starts accelerate – Condo Converters
 Existing properties changed to highest and best use/tear downs
 Demand At It’s Highest
Sellers Market Phase I
Key Strategy
Buy and Hold
Flip
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
Sellers Market Phase II
 Time On Market Increases
 # of Properties Increases
 Rent become stagnant
 Still Getting Inflated Prices
 Potential for overbuilding
 Investment properties are bought on speculation/not cash flow
 Demand for construction and materials are still rising
 Foreclosures remain low but steady
 Business/Jobs Begin To Slow
Sellers Market Phase II
Key Strategy
Sell Off Inventory
Flip
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
Buyers Market Phase I
 Price/Rents Falling
 Unemployment Highest
 Excess supply
 Time on market/longest
 No Speculation
 Existing inventory sitting idle, in need of repair
 Foreclosures sharply increase
 Construction – overpriced and stagnant
 Inv Prop At Lowest Levels
 Demand At Lowest Point
Sellers Market Phase I
Key Strategy
Buy and Hold For Cash Flow
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Job Fulfillment
Seller’s
Market I
Job Growth
Buyer’s
Market II
Job Construction
The Real Estate Market Cycle
Buyer’s
Market I
Seller’s
Market II
Buyer’s
Market I
Seller’s
Market I
Buyer’s
Market II
Buyers Market Phase II
 Time On Market Decreases
 Absorbing Oversupply
 Job Growth Increases
 Prices Slowly Increase
 Demand begins to increase
 Very Little Speculation
 Existing Properties Being Rehabbed
 Foreclosure – competition fierce as numbers decline
 Rents Begin To Slowly Rise
Buyers Market Phase II
Key Strategy
Buy and Hold!!
Emerging Markets
Large Markets Markets – Late Innings
Dallas
Austin
San Francisco
Anaheim
Atlanta
Oakland
Cape Coral
Denver
Orlando
Emerging Markets
Money In Secondary Markets!
Fort Collins, CO
Columbia, SC
Santa Rosa, CA
Port St Lucie, FL
Boise
Knoxville, TN
San Antonio
Waco, TX
Richmond, VA
Montgomery, AL
Daytona Beach
Jacksonville, FL
Chattanooga, TN
Dayton, OH
Manchester, NH
Akron, OH
St Louis
Reno
Micro Repositioning
86 – 90% Occupancy
B Property/A-B Area
Upgrade
Exterior - Landscaping, Parking Lot, Signage, Leasing Office, Minor
Ext Repairs, Paint Exterior, Common Areas
Interior – Carpet Cleaning, Paint, Spray Counter Tops, Lighting
Package
Total Cost - $1500/3,500 per door
Complete Time – 2/4 Months
18 Month Refinance Into Long Term Debt/ Equity Return
Senior Living Facilities
Free Gift From
Wilson Conferences!