In this conversation between Christian Osgood and multifamily investor Brandon Vukelic, the hosts break down how to select the optimal market for multifamily real‑estate investments. They begin with personal anecdotes about why they chose Boise over Spokane, Austin, and other cities, then outline a systematic framework for market analysis: (1) population trends – growth is essential because housing is a product for people; (2) employment landscape – diverse, stable job bases and major employers protect demand; (3) economic drivers – tech, agriculture, military, data centers, tourism, and where urban sprawl is occurring. They discuss the impact of landlord‑tenant laws and political climate, noting that red‑state policies often favor landlords while blue‑state regulations can increase risk (e.g., rent‑control, eviction hurdles, pandemic moratoriums). The conversation shifts to investment strategy: prioritize cash‑flow‑positive properties to build a financial foundation, then allocate earnings into appreciation‑heavy markets, regardless of political leaning. They compare markets like Ohio (high cash flow, low appreciation), Texas (high appreciation), Tulsa/Kansas City (steady, modest growth), and Washington’s Moses Lake (diverse job mix). Risk mitigation tactics include maintaining reserves, using long‑term fixed‑rate debt, and understanding local market dips (e.g., Mount St. Helens impact). Finally, they advise investors to leverage personal competitive advantages—local knowledge, networks, or personal preference—rather than chasing a “perfect” market, and to avoid trying to time the market. The episode ends with a teaser for a follow‑up video on market timing.
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Hello YouTube, it's Christian. We are back. Hey, here's Brandon. We're doing Multifamily 101. This is the most asked question. I know I say this almost every week, but this is actually the most asked question I get within Cody and my mentorship group. We get asked, what is the right market to invest in? Well, people have relationships in a market, say like Ohio, where you have a lot of cash flow, but it's a fairly depressed market where a lot of people are leaving. I've personally never been, but it sounds too cold for me. You do actually want to invest in places where humans want to live. We're going to get into that in this video a little later on and how that looks. Um, but we want to let you know that you can buy in every market. You just have to know what to look for and what the right things are, because it turns out there is real estate everywhere in the country and someone does have to own it. Yes, might as well be you. Um, so I want to dive into this. Brandon's actually bought in multiple markets. I've bought in multiple markets within one state. I've never gone out of state. So I want to ask you a little bit, when you were choosing your market, because you ended up on Boise, of all places. Yep. Talk to us about that.
So we wanted to get out of Seattle for some political reasons, more than anything.
Yeah.
And so we were looking at Spokane at the time, Boise, Idaho, and Austin, Texas.
Okay.
So it was my brother and I who invest together, and we liked Spokane and Boise because they're a little bit closer. We lived in the Puget Sound area near Seattle. We kind of quickly ruled out Austin, even though we love the growth, we love the jobs that were going there. For me, my brother, yeah, in the weather. My brother lives in Hawaii. Uh, for us to take a flight to Austin was a little bit beyond what we wanted to deal with in case we need to run there for anything urgent. So that quickly took Austin off the plate, and then we went to Spokane and we went to Boise, did our tours around, met with some great brokers, right, that knew the market. They showed us some properties that their investors have been buying. They showed us specific neighborhoods that they thought were good and up and coming. 'Cause I don't buy A-class, I kinda look for that B-class property. And so after further thought, you know, Washington's kind of a tenant-friendly state, so we took Spokane off and landed in Boise. Oh, there we go. And we liked the jobs, we liked the asset class we were looking at, we liked the price at the time. And so that's kinda how we landed, and we got very fortunate with that decision.
Yes. That brings me to exactly what I want to talk about is how do you know it's the right market for you as far as the actual market? Like, if I'm looking at a city, let's use the Ohio example, right? Um, if we've decided, hey, I, I'm gonna buy in Ohio, well, there's a lot of areas of Ohio where the population is going down. Basic supply and demand. If you want to know where to invest your money, where it's going to go up in value, how you're going to protect your money, or if you're raising capital, your client's money, which is even more important. If population is going down over time consistently, year after year after year, there's less demand for your product. I would not invest anywhere. That is the absolute number one right thing that I look at in any market. Your product is housing for humans. If humans don't want to live there, you have a major problem. Yep. Don't sell a product that no one wants. And I don't care what business you're in. This works for anything. If you're selling phones, if you're selling candy on the side of the street. I wouldn't sell candy to a cult of vegans. They're all about health, right? That's the wrong market. It's the exact same principle. Know your market. First thing is gonna be population. Next, you're gonna look at jobs. Jobs are extremely important. I want to see a diversity of jobs. If it's just one company that supplies everything, and we've seen this in Michigan with like Ford and auto manufacturing, when that got shut down, Michigan just like tanked.
Do you know that I heard this, that this week that Detroit was the richest city in the world at one point when auto, the automobile industry was growing. They thought those jobs were there forever, right? And look what happened. Super depressed. Yeah.
Awful. So you want to diversify your risk. Cody and I talk about Moses Lake, Washington all the time. That's where we invest. Do I like investing in Washington State politically? No. We'll talk about that next. But the actual market— you have military presence, you have Boeing, you have data centers, which I don't think are going anywhere. Like, internet seems pretty stable. Like, I think we're gonna keep using that. But you have Microsoft, you have Amazon, you have Google. Google's— yeah, Google has a huge area out there. And then you have a backbone of agriculture that has been there forever. And Washington, especially Central Washington, is just fantastic agriculturally. So you have mid-level jobs, high-paying jobs, a diversity of occupations, and then it's also a little bit of a summer town, so you get a little bit of bump in the tourists in the summer months. You have a town like that, you have that diversity, and then you look at the population, and the population Over time, just going up. It's about 1% to 1.5% a year.
Yeah, that's good. That's a good trend.
Yeah, and it's been that way forever. I can go back 60 years. There was one significant dip when Mount St. Helens exploded, covered the state in ash, and it killed all the crops. There was a 2-year period where it was just terrible to farm there, and that's when it was just an agricultural town. Outside of that, No dips. If you see a dip, know what caused the dip. Other than that, invest in places where people want to live. Anything else that we need to look at as far as the market analysis?
So you got population growth, cover that. Who are the big employers? Covered that, right? And then kind of like where the sprawl is happening, I'd say kind of in terms of, let's see, you've got what are the difference in the employment? So is it tech? Is it agriculture? What's driving the economy? I like to look at— we got population, employment, and job growth, right?
Yeah.
The job growth too. You got to see that in terms of the diversification like you're talking about. So, and then landlord-tenant laws, that's another big one.
Yeah. So let's move on to that. Okay. So let's talk, let's talk politics. We're not going to debate politics. We're just going to talk about what matters when you're a landlord. What is easy as a landlord? What is easy as a tenant? What protections do you have? And what does that mean for where you're going to invest? Because that is a question we get all the time. Should I just pour all my money into red states? Now, Brandon, you have a tendency to prefer red states. You just listed, you know, Idaho, Texas. Granted, Austin is, yeah, blue, but in a sea of red. And your laws there are going to align with landlords.
And I still own in Washington like you. I still do. I mean, uh, we have an Airbnb property, so it's not under long-term rental kind of laws, tenant laws.
But when your brother's in Hawaii, and that's—
I mean, Hawaii is about as difficult as it can be, and they're dealing with major short-term rental regulations right now, major. But I also watch like Tulsa, Oklahoma, because I want to get into, like you said, more landlord-friendly states. And talking about like the growth and the rent appreciation, everything too, like we— you don't, you don't get it both ways. You don't have super strong appreciation and super good cash flow most of the time, right? So we have— my brother and I own in lots of appreciating markets, don't have great cash-flowing markets. And so I want to diversify, and that's gonna get me into Tulsa, maybe Kansas City, or other cities like that.
Well, and the cool thing with the appreciation is that protects the value of your dollar. Mm-hmm. This— I had this conversation yesterday with someone in our mentorship group, but we had— he's like, hey, I— this is where I was thinking of Ohio all day, but he's like, I have all these connections in Ohio. I know brokers, insurance people. I have family there, but it's just not an appreciation area. He's like, I can find cash flowing deals left and right, it just doesn't appreciate. A valid strategy that I recommend people do is build cash flow first. Cash flow is your lifeblood. That is the most important metric. If you can find a cash flowing property, it's going to keep paying for itself. You get it long-term fixed rate debt, you're never going to lose it. If you build a base of cash flow in a market like Ohio, you get your first 25, 50 units, I mean, heck, your first 10 units can make a life-changing difference. But you buy in that cash-flowing market, my suggestion is choose an appreciation market, take your earnings over there, and put it in somewhere that's really going up. That could be a blue state, it could be a red state. Texas, the entire state, massively appreciating market.
There's pros and cons. I mean, if you get into a market like Tulsa, where I've been watching, It's not gonna appreciate double digits like the Puget Sound has over years, but it's also not gonna tank. We're seeing prices now cool off, right? These hot, hot markets, West Coast, East Coast, they may tank double digits, but I don't see Tulsa tanking double digits. They told us in 2008 prices dipped like 4%. So that's kind of your pro and con looking at that.
[Speaker] So if you're looking at the red markets, the blue markets, landlord laws, like you mentioned, Seattle's impossible. You got the amount of notice you have to give to raise rent now is insane. If you want to get someone out of your property, and this happens to us all the time, it is a huge, long, expensive process. And if you forget to spell a word right, they can kick it back through court. The true story, yeah, they can kick it all the way back and you have to restart the whole multi-month process. Yeah, extremely difficult to make people pay. When you look at some of the blue markets during an event like COVID people didn't have to pay rent for— I mean, they kept additional, uh, what are they called, moratoriums in place for— how long was that?
Uh, it was a year and a half. It ended October 31st, almost a year ago. We're still dealing with the ramifications from that.
Optional rent. Insane. My mortgage wasn't optional through any of that, right? That's an actual risk that you do need to be aware of. However, keep in mind that someone has to own that property. Might as well be you. You need to do the underwriting in those markets to have more reserves so that you can survive those things. And you better have great cash flow base. And lastly, if you have a lot of those stable jobs, most people are actually good people and will pay their rent. And that is where I think a lot of people are scared. Whoa, you didn't have to pay your rent. Or in Washington, where the government is actually suggesting that you invest all of your saved rent in going out to eat with family.
It was just insane.
Uh, like, hey, I'm not paying my rent, neither should you. Pay your rent. But if you are, uh, if you're in a market where they could make that optional, know that if people have stable jobs, most people will continue to pay. Cody and I have 100 renters. We bought a campus that was dying because of non-pays before COVID right? Um, We fixed that during COVID We have 2 people who don't pay, and we have helped them get on rental assistance because there are programs to help them on that. Don't let that stop you from buying, but do plan for that. If you're in a market where politically they hate landlords, unfortunately, yeah, it's something you do have to contest with, right? Just don't let it keep you from buying.
Exactly. Yeah, I know people invest, still invest in Seattle all day long, and they're A-class kind of properties. $3,000 a month to Amazon software engineer, not really high risk. So they're, they're willing to weigh the pros and cons of being in Seattle, taking advantage of the high rent appreciation, property appreciation, strong jobs, all that stuff.
So yeah, now if you're investing in Class C in Seattle, yeah, that's a different story. They're probably not gonna pay.
No, they're encouraged not to pay.
Yeah, they're, they're highly incentivized not to pay. There's no reason they would. And again, the, the level of job that you typically have in a Class C property in Seattle, you typically fall into a demographic that is less likely. So you carry risks, massive risk. Yeah, just don't let the risk stop you. Have the analysis in place for, hey, I have some extra risk here, I'm gonna need some extra reserves, or this deal has to cash flow even more. Make the decision for yourself. Don't let these things stop you. Last thing I'm going to mention today, and we're going to include this in next week's video timing the market. That's the other thing people are getting stuck on. Where do I invest? Invest where you have a competitive advantage. Could be your backyard. If you hate your market, it's just terrible, you don't want to invest there, choose a market you love. Yeah, we have 19-year-olds in San Diego who are buying up all of Texas. They're at 28 units at the end of this week.
That's awesome.
Absolutely insane. But they chose what they wanted to do and they went out and did it. Are there challenges to Texas, like prices going through the roof and high taxes? Yes. Does that keep you from buying there? No.
There's no perfect market.
No. And so if you're looking for the perfect market, stop. Just know that you need cash flow and long-term fixed-rate debt, and that's pretty much what you gotta do. Commit and make it happen. Don't time the market because you're gonna get stuck the exact same way. We're gonna cover that next week. Looking forward to seeing you guys then. Until then, like, subscribe. This is Brandon Vukelic from Multifamily Momentum. Follow his channel in the link below. And hopefully you're already following us, so keep doing that.
