Finding the Competitive Edge in Your Local Market

Using local knowledge to beat out Institutions and iBuyers

As the economy remains in an evolving state of uncertainty resulting from economic repercussions of the 2008 global financial crisis, and accelerated by the pandemic in 2020, the real estate industry has been flooded with new investors seeking to hedge against inflation. The past five years has seen tremendous growth from new investors entering the industry. These investors span from the individual buying their first single family home, to iBuyers and large institutions buying a variety of real estate assets. Like with anything, when there is a surge in demand and a lag in supply, prices increase. As more money flows into the industry there is less perceived risk in the asset class, therefore investors are willing to accept a lower return.

For me, as an investor and operator, it is easy to look at this and say “how can I compete with an iBuyer that is willing to pay above asking price for a property or an institution that is willing to purchase properties at a 1% lower cap rate than what would make sense for my criteria?”

Well despite all the competition, there is still something to be said for having intimate market knowledge and building local relationships. Understanding submarkets are key to identifying opportunities beyond what is obvious to everyone else. The key to my success going forward, will be combining that local market knowledge with industry leading technology.

Technology is changing the way deals are done. What used to take hours canvasing markets and sourcing ownership information can now be done in minutes. In the click of a button there is software that can provide you with owners contact information, address and mortgage information, and property information. Having this at your fingertips can allow for more efficient and targeted prospecting that, when combined with the local market knowledge, could give an edge over the competition.

Going forward, I think it is critical to combine the local market knowledge with the most innovative technology to stay ahead of the competition despite their size or resources at their disposal.