My brother and I just returned from a trip to Florida a few nights ago. Now that we are actively marketing in the area, we thought it best to talk to local experts and build a team in Jacksonville. It’s not difficult to send marketing dollars to a zip code clear across the country, but once a property becomes available, having the right team in place to make the flip happen can be a challenge. It is possible to flip across the country, and I’d like to share with you one of the first things we do when we enter a new market.
I often think of cities as childhood sandboxes. Sometimes the neighbor kids sandbox has better toys than our own and sometimes ours is better. But the great thing about real estate is we can play in whoever’s sandbox we please. So why not play in the sandbox with the best toys?
California, though not the best place to invest according to some investors, has proven to be a decent sandbox for us. We’ve done most of our deals here and are happy with the business model. However, there are other markets in the United States whose economic growth, job growth, net migration, and affordability trumps that of California and we are excited to apply our models in those states.
After identifying the city whose economies are working better than our own home state, we take a trip to the city to meet with as many contractors, realtors and local experts that we can in an effort to build our “boots on the ground” team. Typically, these trips, now dubbed “Scouting Trips”, leave us exhausted, overly stuffed, but excited about the future.
The week is filled with wall to wall meetings. We try to meet with as many relevant local experts that we can. Usually our first meeting is early in the morning at a local coffee shop with our local expert seated across from us. After an hour or so of rapid fire questions, we are off to the next coffee shop, café or recently purchased SFR that is in the middle of a renovation. By the end of the day, we are amped on too much caffeine, full from too many lunches and dinners, but mostly excited about the prospect of investing in the city.
One interesting thing that we’ve noticed while on these trips is somewhat of an unusual takeaway. It seems like the people that we initially set the meeting up with, while very interesting, oftentimes point us to the person we are looking to work with. It seems like the second or third tier introduction is the most helpful individual. It’s sometimes those later introduction individuals that we came to know as a result of the first meeting who are the people that we end up working with.
Another thing that I learned while on these trips is that there are possibly easier and more efficient ways to build our team, but it’s difficult to form a bond over the phone. In our day and age due to technology, a lot of connections can be made over the phone or through email. Usually you can get a good idea of the type of person you are meeting with after a few simple phone calls and visits to their websites. However, we’ve learned that by looking someone in the eye and shaking their hand, a connection is built that cannot be otherwise be built.
The “Scouting Trip” is usually one of the first steps we take when investing in a new market. The trip is a way for us to get a feel for who the players are and who we should stay away from. We can usually figure out who the outliers in the area are (good or bad) from these visits.