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Being in the business of real estate comes with challenges. There are an infinite number of questions always looking to be answered, and at times, those answers can be hard to find. While I, like many others, are data-driven, having a first-hand resource to answer those questions can be valuable when learning the ins and outs of the industry. Data is always right, but the context behind the data is equally, if not more, important.
A common question I receive is a question as old as real estate investing itself: What city should I invest in? Many people who invest in real estate start in their own “backyard.” This is a legitimate starting point, as it gives you access to your assets and allows you the convivence of viewing your properties as often as you wish. However, out of state investing can be far more lucrative based on the city or cities you choose to invest in.
As a syndicator, my job is to look at markets and understand not only their current profitability, but how they will continue to perform in the future. I currently manage $530M worth of assets with my company, Blue Lake Capital, and we look at multiple data trends before investing in a property to ensure that we are investing in a strong market. In 2021, I have found a consistent success in three major markets that I believe are worth sharing, in no particular order.
1. Atlanta, GA Metro
Atlanta, Georgia has performed very strongly for our investors and continues to be a strong performer. The submarkets provide beautiful scenery, as surrounding cities of Atlanta are located in beautiful foliage and nature. On one property, our tenants make five times more than their rents, and our economic occupancy in all assets in this metro remains healthy and strong. To further this, at another location, we were able to push rents by $400+ dollars upon acquisition, without completing any renovation. This market continues to grow, as it is becoming a new destination for working professionals, both old and young. Atlanta, Georgia has been a tried-and-true market and is worth a look at when considering your next investment.
2. Charlotte, NC Metro
Similarly to Atlanta, Charlotte consists of working young adults, excited to explore the warm weather and job opportunities that come with it. Charlotte is the largest city in North Carolina and has recently continued to grow year-over-year, now ranking as the 3rd fastest growing city in the state. The factors that drive this interest are a low cost of living, along with the general opinion that Charlotte provides a niche feel at the intersection of suburban peace and city atmosphere. Even the the city itself is undergoing new renovations to keep up with corporate relocations. Lastly, Charlotte has an average home ownership rate of 52.9%, which is lower than the national average of 64%, meaning there are far more renters within the area. This makes Charlotte very attractive to multifamily investors.
3. The Research Triangle: Raleigh, Durham, and Chapel Hill, NC
The research triangle, which boasts over 300 companies within the area, is an up-and-coming region that deserves more of a “look-at.” This area is anchored by North Carolina State, Duke University, and University of North Carolina, Chapel Hill. This trifecta of “research” colleges provides a high demand for the area, as many new, young working adults tend to stay in the area. The area in total has an enticing feel due to this and many tech companies have gravitated to it. Even Apple has committed to a $1B campus creating 3,000 jobs between 2023 and 2032. This market is in high-demand and looks to continue to grow in coming years.
Summary
Location is everything when it comes to real estate investing. While data and analytics can paint an idea of a market, it’s the context of that data that paints the picture in full. As someone who has found success in multifamily investing, I have found three markets that are highly notable in 2021. Atlanta, Georgia is a market that continues to grow, as the diversity of occupants consistently provide great economic occupancy in our assets. Charlotte, North Carolina is a metro that also continues to grow year-over-year. The percentage of renters coupled with the younger feel of the city makes this metro a hub for working young adults in search of warm weather and fun atmospheres. Finally, the research triangle in North Carolina deserves more attention. The universities that live within the triangle are attracting tech companies to create jobs there, therefore driving the cities need for occupancy up. While many metros are performing strongly this year, it is the longevity of growth that makes all the difference in the long run.
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About the Author
Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the host of REady2Scale , a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.