My name is Adrian Lyew, and welcome to the Market Analysis Execution Plan. In this Execution Plan (EP), I’ll take you through each step needed to effectively, efficiently run an in-depth analysis for any market of interest. The next few pages break the entire process down into easy, digestible steps, and show not just how to pull the numbers but, also, why we do it and why each point matters. And in the end, you’ll have a turnkey solution that will help you make critical decisions about your market and your next steps.

Get the most out of this Execution Plan by following these two essential steps:

1. Read the entire EP first – Read through the EP from start to finish, watching the videos and downloading the free resources as you go. It’s important that you don’t take any additional steps until you’ve finished reading through the entire EP at least once. This will provide you with a better understanding of each step before implementation, and help you see the big picture.
2. Work through EVERY step – Consider this EP your checklist. Once you’ve finished reading, it’s important to follow each step in order. Work your way from start to finish to get the most from this plan. If you skip steps or go for the lowest hanging fruit only, you won’t maximize this EP or the processes outlined.

There are a number of resources included in this Execution Plan. Don’t worry about downloading them until they’re referenced in the EP—they probably won’t mean much until you get to that point in the guide. Here’s a quick list:

• Sample Email to Send to Realtor Requesting MLS Data
• 1-Line MLS Export Template
• Excel Spreadsheet with Sample Pivot Table

Part of the foundation for any serious real estate investor is understanding the market—the market surrounding them, the market they’re investing in and the markets they want to break into. But most investors don’t do this—most investors believe they can close successful deals without going through this critical process. While, technically, that might be true—you can close deals without a comprehensive market analysis—you aren’t going to get much further. Think of it like fishing. There’s a big difference between fishing in a pond behind your house and becoming a professional deep sea fisherman, right? The guy in the pond doesn’t need a plan—he’s just out there because it’s fun. However, if your entire livelihood depends on catching fish, you’re going to want to plan every detail from where you’ll fish to what you’ll use to fish to when you’ll fish. You’ll understand it’s a delicate balance, and that you need to understand it all to be successful. Same goes for real estate investing.  Ready to learn more? Let's dive in!

Like anything, to get the best output you need the best inputs—analyzing a market is no exception. If you’re going to get the best, most accurate analyses, you need to use the best data and data sources. Think about it—if you’re baking a cake, you’d want the best ingredients, right? Right. Same here. So those “best ingredients?” In real estate investing, they come from Multiple Listing Service (MLS). This data will be the best foundation to ensure you build out the most accurate market analysis. That said, you absolutely can use other sources—throughout this EP I’ll touch on other platforms and sources. By the time you finish this EP you’ll probably be able to figure out ways to source sold property data from free online sources or public records. But my goal? To make things as simple as possible, at least when it comes to analyzing markets. Every market has MLS, accessible to real estate agents and brokers. As an investor, you likely already have or are already building strong relationships with agents in your chosen market or markets—so why not leverage those relationships to pull MLS data, and use the best resource for your analyses?

Or maybe you have MLS access on your own. If you’re a licensed realtor and have access to the MLS, then you have everything you need—no outside agents or brokers required. The data you need to analyze any property and any market is right at your fingertips, in this case. If you have access, chances are your local MLS uses one of the following systems:

• Matrix
• Flex
• Fusion

And even if you have a different MLS system, you should still be able to squeeze everything you need out of your platform. As you watch the three videos in this EP, you’ll notice a common theme across all MLS types. If you have a different MLS system, you’ll still be able to get most—if not all—of the data you need by following these steps.

Using Matrix MLS

 

Using Flex MLS

 

Using Fusion MLS

The main criteria you’ll need to run your searches are:

• County
• All Closed Sales in the Last 90 Days. If your county is small and has less than 1,000 transactions in the last 90 days, then increase this to the last 120 days or 180 days.
• Single-Family Homes. Change this criteria depending on if you’re investing in other asset types.

The main fields/columns you’ll need to ensure are exported in a one-line format are:

• MLS Number / Listing Number
• Address
• City
• Zip Code (as a separate field from address)
• Bedrooms
• Bathrooms (Full)
• Year Built
• List Price
• List Price/SF (if available)
• Sold Price
• Sold Price/SF (if available)
• Sold Date
• DOM
• Terms Of Sale (or Financing Type)
• Subdivision

Note: the items in bold are mandatory to a complete analysis. Once you have everything, export all results into an Excel or .CSV file that you can then use to run your pivot table analysis. We’ll review this in Section 3.

Most real estate investors don’t have MLS access—so don’t worry if you don’t have it. Simply follow these steps and you’ll be able to ask a local real estate agent to pull this data for you. Follow these tips to make the process super easy and painless—for both of you.

1. Call a reputable real estate broker/agent Tell them you’re looking for one of their agents who is somewhat tech-savvy and very familiar with MLS. Keep in mind you don’t necessarily want their best agent—they’re likely too busy wheeling and dealing to dedicate time to pulling your reports. When you get to an agent, let them know you want to invest in this market. Add that you don’t want to waste their time—so, in that vein, let them know you’d like to pull some very specific reports that will help steer your investing.

A quick note—often a local agent will tell you that they know where you should invest. While that might be true, you want to do your own analyses—often you’re looking for very different things than the typical buyer. If this comes up, simply tell them that you appreciate the offer but that this is standard operating procedure for your business and for any market you plan to invest in. It’s all about trust-but-verify in this business—exactly what you’re doing in this step.

2. Send a follow up email

Follow up by sending an email to the agent. Use the Email Template included in this EP—just copy, paste and customize. CLICK HERE TO DOWNLOAD A SAMPLE EMAIL FOLLOW UP

3. Ask which MLS system they use

While any are just fine, it’s important to find out if they use Matrix, Flex, Fusion or MLXchange—or something else. Once you know this, send the corresponding video and One-Line MLS Export File that shows the agent how to pull this data from their MLS. CLICK HERE TO DOWNLOAD A ONE-LINE MLS EXPORT FILE TEMPLATE  If they happen to use another MLS system, then share one of the videos with them and ask them if they could do the same with their MLS. It’s all the same process, more or less, so they should be able to accommodate your request.

4. Collect their exports

Get one-line export files back from agents and move on to the next step in your analysis.

Chances are, you all use Microsoft Excel. But chances are, you haven’t been using the Pivot Table function—I know I hadn’t. This is an extremely powerful tool that will help you break down markets based on any variation needed. Armed with the data from Section 2, your next step is to manipulate a pivot table to generate a report that will help guide you on your way to understanding any market.

Follow this VIDEO that will show you how to set up the main pivot table. Once complete, your pivot table should look like this: Set up these tables by selecting these categories: In Section 4, we will look at the fields to focus in on based on your preferred exit strategy.

After you set up your main pivot table, you can create additional pivot tables as sub-categories, still based on zip code as the main line item. Watch THIS VIDEO that shows the possibilities, which include, but are not limited to:

• Bedrooms
• Subdivisions
• Sold Terms

The sky’s the limit when it comes to pivot tables—and, with it, how you understand and analyze your market.

Keep in mind, pivot tables are only as good as the data you have and the smart, strategic thinking that’s powering them. This EP outlines what’s needed to break down your market by zip code, but by no means do you need to stop there. If you can brainstorm other columns from the MLS data that you could utilize in a more detailed pivot table, go for it. For example, you could put “Swimming Pools,” or “Garage Spaces” as a row, or even a filter, then see what results pop up. If that’s critical in your market, this could be a big win. You could also break things down by square footage as a subcategory of zip codes, then understand what range of square footage is moving the fastest, and for what price. You could even take things a step further and brainstorm categories of data not included in this EP, downloading it from MLS and running your own picto table analysis. Again, the possibilities are limitless. This EP is intended to challenge your investor brain by giving you the tools and from there figuring out how to best apply it—the rest is up to you. One quick note of caution, though. It’s important to know how you’re inputting the pivot table fields so you can get the right information output. Here, I’ve laid out the main—and, likely, only—pivot table you need to break down your market. This will help eliminate the guesswork and save lots of time in the short- and long-term. However, keep in mind you can manipulate the pivot tables any way you like as you go.

So, what do you do if you DON'T have access to the MLS? Well you certainly don't freak out, or fall victim to "Analysis Paralysis." Instead, you move on to the next best thing, which is what we call the Listsource Market Analysis Method. It's very simple and 100% FREE. To unlock this secret for yourself, just watch this short video (it's less than 8 minutes long and goes through ALL of the steps!) [video width="1280" height="720" webm="https://realadvisors.wistia.com/medias/7yta0gr17x?embedType=iframe&videoWidth=720"][/video] However, please don't stop here! The quality and quantity of the data you'll obtain from a full and official MLS export is so much higher. There are no pivot tables with the Market Analysis method. This is just designed to help you get started in the right direction, while constantly drilling down and working with better and more updated information!

That’s all that’s needed to tackle market analyses using MLS data and pivot tables. Depending on what your primary investing exit strategy is, you may want to manipulate the pivot tables differently—again, it’s up to you. For some of the more common exit strategies, these are a few additional pivot table go-tos you can integrate into your planning and analysis.

If you are wholesaling, the most important thing is to know where the cash buyers are buying, and for what price. If you’re going to be taking properties into contract, you need to be sure you can find the right buyer quickly. Adjusting your pivot table can help you better understand the market and what’s likely. A simple solution? Sort the “Count of MLS No” column by largest to smallest, so the zip codes with the highest number of transactions are on top. Then, toggle the “Terms of Sale” or “Financing Type” column to show cash-only transactions. Be sure to key in on the zip codes where the cash buyers are buying—this will tell you not just where to start hunting for wholesale properties, but at what price points you should be picking them up for as you go.

Just as with wholesale analyses, you’ll want to focus on zip codes that have the most transactions in the last 90 days. However, you may want to pay extra attention to the DOM—days on the market—field, which can be a huge determining factor for rehabbers. Once you finish rehabbing that house, you want to know that you have a good chance of having plenty of comps and that it will sell quickly—a low DOM is the indicator here. Sort the “DOM” column by smallest to largest to see zip codes with the lowest DOM. From here, cross-reference them with the column that shows number of transactions.

You may want to do an additional market analysis when dealing with rentals—Owner:Renter Ratio is a good add-on for landlords. This is a more advanced move—you may want to simply ask your real estate agent for that ratio for every zip code you’re considering, then cross-reference it with the pivot table you’ve already run. Keep in mind you’ll need to zoom much closer in each zip code to determine the best rental areas. Another tip? If you’re interested in Section 8 rentals, look at GoSection8.com to see where these properties are located. You can have a virtual assistant grab all properties from GoSection8.com and enter them into a spreadsheet and sort by zip codes. Then you can cross-reference them with the pivot table you’ve already run.

If lease option is your primary exit strategy, you’ll still want to key in on zip codes that have lots of transactions. However, you may also want to select the higher priced neighborhoods—these can often be good for those looking to lease properties. A market analysis will help you see where high priced neighborhoods are—from there, use your knowledge pulling MLS data and figure out how to implement market rents into the analysis. It’s all essential when considering lease options as an exit strategy.