How to research asking rents on Craigslist

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If you’re going to do multifamily projects, you need to know your target post-rehab rents.

In our business, we rely heavily on proprietary information from our existing portfolio. Since almost all our units are renovated to a similar standard and all our buildings are clustered in a few areas, we have very granular information about demand.

But what if you don’t have that advantage? (Or, what if, like me, you want to avoid leaving any stones unturned in your quest for information?)

You need to spend a ton of time on Craigslist looking at asking prices for units of various sizes, finish levels, available parking, etc.

And, if you’re going to do this, it’s important to keep in mind the time of the month.

If you do your research in the first few days of the month, you are likely going to see units that carried over from the month before. And that’s bad, because those are the units that didn’t move… which in LA is code for “over-priced” (since everything moves in LA at the right price).

When’s the right time to check CL for pricing? Twice per month:

  1. In the days leading up to the third weekend of the month, prime time for leasing, when you should see the most product; and
  2. In the last week of the month, when owners will sometimes start to cut prices in hopes of getting someone in for the 1st… giving you a sense for which units were over-priced to begin with

If you do this religiously for your target markets for 2-3 months, you will know the pricing well enough to start to underwrite deals.

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