Data-Driven Real Estate: Mastering Market Analysis with Donato Callahan

Brandon: "Hello and welcome back to another episode of the Collective Clicks Podcast. This is your host, Brandon Bateman, and today I have Donato on the podcast. He has been building a platform called Bright Investor for the past couple of years, all focused on data around comping, dispositioning properties, and targeting markets. So, I'm interested to pick his brain to see what he's been doing and what advice he has for people that are looking for markets to target PPC. And I'll see you there. Donato, welcome to the podcast. How are you doing today?"

Donato: "I'm doing great, thanks for having me here today. I appreciate it."

Brandon: "Yeah, I'm excited to have you here today. We've been talking for just a few minutes before the episode. I think you've got some pretty interesting things to share, and I'm really curious to learn more about you and your business and everything. But for anybody listening that doesn't know who you are or what you do, why don't you share that with us?"

Donato: "Yeah, so I started in real estate in college as a wholesaler and quickly grew to a 4-unit house hack, which then turned into 375 units in a $35 million portfolio by 25. Most recently, a 200-unit deal in San Antonio. Now, I grew that while I was working full-time as a geospatial analyst for the US Department of Defense and the intelligence community. So, you know what that means—long days and long nights, getting off work and going right into work. But it was through that process that I was able to actually retire from my day job, and I got kind of tapped on the shoulder to come be the head of Acquisitions for a multifamily investment group. And since then, I've analyzed over 3,500 deals in the last six months and basically took all of that and wrapped up my experience in this framework for getting deals faster and better areas into my software company, Bright Investor, which I founded a few years back. And now I'm full-time as a real estate investor and software CEO for real estate investors across the nation."

Brandon: "Okay, cool. Yeah, sounds like you've been busy."

Donato: "A little bit. My story is not so different. I started my company in college as well."

Brandon: "There it is. Birds of a feather, that's right."

Donato: "It's a fun experience. I can't say I experienced very much of the college thing once I started the company. I just like, yep, sort of show up to every class that you had to be in, basically do nothing that you don't have to do, and work while you do all the other things. That was kind of my experience too."

Brandon: "College, I remember vividly going on a retreat with some fraternity brothers, and they were going out, they're having a good time, and I was on my computer just on the phone with real estate agents and investors in St. Louis before I moved, getting feedback and talking to them about this product."

Donato: "And I remember vividly one of them walked by me and they're like, 'Donato, why are you this way? What's causing you to do this? Like, why?' And the only thing I said back to him was, 'Why not?' That's fun, why not do this?"

Brandon: "Yeah, why not try? And it was just like, as you started going down that path, you know, this divide grows between—there's nothing wrong with the direction you're going, but it's not for me. And the college experience becomes this is a tool for me to build my future, not this $50,000 party that I'm supposed to then pay for for the next 20 years."

Donato: "Yeah, so just different choices, but I've enjoyed where they've taken me so far."

Brandon: "Yeah, I think it created for me—I'm sort of, it made me sort of a unique case study because I'm the kind of person with the risk tolerance where if I didn't start a business at that point in my life, I probably wouldn't have at a later point in life. Because if you think like, when you're in college, your number one asset is your low opportunity cost."

Donato: "Yeah, like, what are you choosing between? You're probably choosing between like making $15 an hour somewhere or maybe even an unpaid internship, and starting a business. It's really not hard. I remember, like after one month of doing this, I already was like making more money than I would have with like the kind of jobs that were available to me at that time. It was just so easy versus like, I can't imagine leaving a six-figure job to go out and do something that absolutely—"

Brandon: "So much. I get all people all the time. And, you know, I think youth is a huge benefit to starting something because you know, I don't have a spouse necessarily to take care of, I don't have kids to take care of, I'm not funding a college 529 account, I'm not relying on this healthcare to replace my knees in a couple years, you know, there's so many things that I'm not having to accommodate for, and all I've had to do since then is just keep living like I'm in college, and I'm fine. There's no issues. I don't have—there's, I have no other responsibilities beyond just growing this business, and I'm not really giving up anything else. So you're 100% right, you know."

Donato: "Now, I just, at this point, it's like I make so much more, or I'm having so much more fun working with people that, you know, my old co-workers, you know, I remember a very specific time that I asked this guy who'd been working there for 17 years, no kids, so you know, government job, he might be close to retirement, low six figures, and so I asked him, 'Hey man, are you close to clocking out of here and retiring?' And he laughed in my face, like a insulting laugh in my face, like, 'Okay, clearly I'm missing something.' And he said, 'Donato, I've mentally prepared to do another 17 years.'"

Brandon: "And that was the thing that shattered my mindset around him because he's—he was spending 17 years like, 'spare change.'"

Donato: "Yeah, it's ringing off 17 years like you understand that through entrepreneurship and business, real estate, you can be out of here in three to five."

Brandon: "He's like, 'Well, we want different things.' And I just say back to him, 'Actually, we don't. We want the same things, you're just not willing to walk this way to get it, and that's going to cost you for 17 years.'"

Donato: "Yeah, that's a super fair point. Lots of advantages to getting started young, although I can tell you the number one disadvantage for me was that I'm an idiot."

Brandon: "And I firmly believe that me in 10 years won't be. It would have been really nice to start the business at that point."

Donato: "Yes, I have made so many mistakes."

Brandon: "Here we are. Uh, I know, in your mind, you're thinking, 'Oh my gosh, if I knew then what I knew now, I could have done this twice as fast, twice as cheap, with a better hairline and a better waistline than I have now.'"

Donato: "Absolutely, yeah. A lot of times, you just run face-first into a brick wall because you're young and naive enough to think that you'll have it all figured out, that you don't recognize the huge risk. So you just start running anyways, and it's that exact inertia that ends up taking you the direction you need to go because you're not steering yourself off at the very beginning."

Brandon: "Yeah, that's a super valid point. So let's talk about what you're good at. Like, as a person, we'll talk about your companies and what you've been doing too, so I'm curious to hear about that. But what's your superpower? What's your skill?"

Donato: "My superpower is real estate acquisitions and market research. That is what I do every single day. That's my bread and butter, and I spent a lot of time talking about it and analyzing what's working and what's not in markets and properties across the country."

Brandon: "Okay, very cool. So, if we're going down that route, I'm going to start kind of steering you in a way that I think a lot of the people listening might appreciate. I could tell you one of the most common problems that we're trying to solve on a day-to-day basis, and I don't doubt we could be much better at solving, is understanding where we should be marketing. And there are so many different aspects of that, like where we should be marketing means more than just which markets."

Donato: "Yes, it could mean where within those markets. It could also mean which markets, it can mean which states, it could mean where do you draw those lines exactly right because there's a lot of places where, like, one area of the county you're killing it, the other area of the same county, you're not killing it."

Brandon: "Exactly. So there's a brief overview like that. The problem we run into a lot with PPC marketing—The wider you can target geographically, the lower your lead cost gets. So we have this rule for

location targeting. It's kind of like if you go to court, you know, they're going to ask you to tell the truth, the whole truth, and nothing but the truth. We say for location, you got to target the right locations, and that's where a lot of people stop, but then also you have to target all of the right locations and also you have to target none of the wrong locations."

Donato: "Right, or nothing but the right locations. So because here's what happens if you have, like, let's just say there's an area that's like not desirable to anybody, and everybody knows it. I'll give you a good example. This would be like the Detroit City Center, alright? So I want to target Metro Detroit, but the city center is a little bit run-down, it's pretty bad. There's actually no shortage of motivated sellers because they're true motivated sellers because they really can't sell their houses, right? And when the house fully renovated can sell for $88,000, there's not that much money, there's not that much meat on the bone for a wholesale, you pick it up for zero, we're still not doing so good."

Brandon: "Yeah, it's just not exactly not a place to be doing deals, right? So what do you think happens in the Detroit City Center?"

Donato: "Well, all the companies that are targeting Detroit, they probably say I don't want to target the Detroit City Center. So then what happens when you as the investor come in and you do target it, what you're going to find is when you're bidding in the auction, you are the highest bidder in Detroit, great City Center, and you're not communicating to Google that there's any difference in the value of those leads to you. So what you find is you start to get a ton of leads from there, and those leads are actually low quality. That starts to hurt you."

Brandon: "Right, so just including like one wrong area, the risk you run with PPC is you spend a lot of your budget in that area because it's less desirable to other people as well."

Donato: "Exactly, and on the contrary, if I'm just targeting areas A, B, C, when there's also an area D out there that's equally good as ABC to me, I might get a 15% lower cost per lead if I was targeting area D as well."

Brandon: "Right, so it's not just about me finding the right areas to be in, it's about me finding all of the right areas to be in."

Donato: "Right, because that's how I get a lower cost, whether I have a $100,000 a month budget or have $10,000 a month budget, that's true."

Brandon: "Right, so those are the problems we're trying to deal with: how do we determine what these areas are? So, if I were a real estate wholesaler, I'm reaching out to you saying I could target anywhere in the United States, I just have to figure out like where exactly are the right places for me to target, and I want to use data to do that. What's the path that you would guide me down?"

Donato: "Right off the bat, I'm looking at median home price, days on market, new listings that are coming on the market when I'm looking at areas that I want to target via wholesaling or recommending to wholesalers."

Brandon: "Okay, so let me recap that. So median home price, days on market, what was the last couple ones?"

Donato: "And then new listings coming on the market."

Brandon: "New listings coming on the market, okay. So the median home price, that's going to be a very, like, I mean it changes, but somewhat stable metric, like it's not going to be like a world different in a year, I imagine. But the days on market, that's probably like a constantly shifting metric as well as new homes on market."

Donato: "Yeah, and actually, by tracking them monthly, you would be surprised how much volatility there is in median home prices. People, I use lots of examples like this, I'll use examples of Evansville, Indiana, and then I'll do something like Columbus, Ohio. And when you look at median home prices there pre-2018, what I call pre-COVID era, right, we're looking to see what were home prices doing, what was natural market appreciation and demand looking like before workers were relocating, and there's a huge shake-up in where people are having to transact in properties. And you can track as COVID goes into 2020, 2021, huge spikes in the actual median home price as we continue to see this huge jump up in median prices until about 2023 as interest rates start to really take an impact onto the actual housing market."

Brandon: "Yeah, very specific markets across the US, and then specific zip codes within those markets, not only did not drop median home price month over month for the past 18 months, but they were able to maintain their value, if not even continue to grow. At the same time, markets like Evansville, Indiana saw huge spikes I can only equate to a pump and dump scheme within a period of 8 months, home prices dropped almost $100,000."

Donato: "Wow, it's insane, and the thing is transactions drop very quickly as well. And so when I'm looking at a market that we want to be marketing in, one, I want to look for markets and zip codes that have continued to see growth pre-COVID, indicating to me long-term demand for that area, which my repeat buyers going to be buying properties for me. I want to be able to sell over and over again and decrease my acquisition costs. So the better area I can put them in as a repeat buyer, the more likely they are to continue to transact with me. So I want to find areas that have been continuing to increase in property value, if not maintaining it, over the last 6 to 12 months. At the same time, days on market have not gone up really past what their median was around 2021 and 2022 specifically."

Brandon: "So where demand has continued to see action is high. And for that reason, a lot of wholesalers I've worked with who were dabbling in the wholesale and flip space have consistently moved their marketing away from targeting flip projects because of their reliance on the fact that interest rates have decreased their end buyers' purchasing power, meaning they're ending up being stuck paying that hard money costs and their holding costs for months longer than they ever budgeted because they just can't move that product."

Donato: "And so very specifically targeting those zip codes where we can see the home prices continue to be resilient while days on market has stayed strong allows the wholesaler to continue to get into a situation in those markets where one, they have multiple exit strategies, and two, the demand is there to continue to inspire their end buyer to continue to transact in that area. And they're not going to be in a situation where the margin has fallen so low over the past two years that doesn't make sense."

Brandon: "So I take those two things first, and the number of new listings data point that I look at is really there to get an idea on how much competition am I fighting off the MLS. So if I can see where my median home price is continuing to stay stable, where my additionally, my days on market has stayed resilient while the number of new listings has dropped or stayed stable, I see a huge opportunity."

Donato: "Exactly, it's just a perfect one, two, three of, I have this really nice situation where I can come in and provide a huge opportunity to folks who are trying to transact here that they can't find without me. And then shoot fish in a barrel."

Brandon: "Yeah, that's super interesting, and I'm curious to ask, let's just say you had a really short, let's just say you were focused on like what's going to help you next month, you don't care about like repeat buyers over years or what happens to the values of the properties over years, would that change anything?"

Donato: "I would say no, because I'm still looking for an area where my median home price is going to be about $250,000 to $375,000, maybe $400,000 on average transaction where days on market is ideally less than 35 days on market, and it's been consistent for the last 12 months. So if I'm targeting an area now that makes money and transacts, it's going to be an area that continues to in the future. So even if I'm not looking at that future long-term repeat business and building a company for the long term, the fact that I'm targeting areas where the margins still exist and we can get into an area where the product is necessary to move that product, the fundamentals are the same whether you recognize them or not, and whether you recognize their impact on your success, the fundamentals are the same."

Brandon: "Okay, and in your opinion, exit strategy, if I have, let's just say I'm a wholesaler, wholetail, novation, fix and flip, or buy and hold, right, I imagine it's at least true of buy hold, oh—"

Donato: "But absolutely, you know, specifically with the other ones, let's just say, let me just give you like two, two kind of polar but somewhat similar options. First, let's just say, and on one hand, I'm flipping, on the other hand, I'm wholesaling, would you answer that question differently for me in one of those situations, or would is still be the same

answer?"

Brandon: "My answer to that would be, who are you wholesaling the property to?"

Donato: "Probably flippers, a flipper more, it's the same question. And like, I thank you for asking that because when people ask us like, who are you selling this to, it's someone who's going to either fix it up and bur out of it, or there's someone is going to be flipping it. So if you're not thinking of what your end client is doing, you're doomed from the start. If I know going into this zip code, right, that median home price, the days on market, and the new listings are working, and I have comps showcasing that home prices have continued to stay stable last 6 months, the median household income is up 15% over the last 12 months at a price range where their purchasing power at today's interest rates can afford the home, the ARV that I need to hit, and I think about who my end client is, that is how you get into a situation as a wholesaler where you're successful because you're giving them the product that they need, that they can afford."

Brandon: "Yeah, it's why huge corporations spend billions of dollars on market research on what their clientele can actually want to want to purchase and what their purchasing power is. If I don't know what Sally wants to buy from me at the local corner store, how could I ever make a profit?"

Donato: "So it's really the same question, wholesaler or flipper, it's just what part in the process that you're injecting yourself into."

Brandon: "Yeah, I hear you on that. Let me give you one example of a caveat, okay, like, I can tell you this happened when interest rates started to go up in some markets, let's use Arizona as an example."

Donato: "Um, Phoenix, Arizona, massive appreciation for a long time, right? And what's happening for that time? Well, you're buying properties at like 80% of ARV, and you're selling them to flippers at like 95% of ARV, sometimes 100% of ARV because those flippers are idiots at this point, they're just buying too high. But to be fair, there's so little inventory, you know, supply shortage, etc., right? So if you're a career flipper, you kind of got to buy a property, you're doing that, right? So that's what's happening in Arizona."

Brandon: "Interest rates go up, what happen? Their interest rates go up. Well, now the retail prices of those properties, they slide a little bit, they don't slide a lot, right? So we're looking at like what are things selling for in the MLS, it's down a little bit, but cash buyers, those flippers, instead of buying at 95% of ARV, now I have clients that can't sell them for 65% of ARV if they want to because they got really skittish because they feel like the market's going down, right? So in that circumstance, like wholesalers in that market had a really, really hard time for a period of time until we like made it through that cycle."

Donato: "Um, on the other hand, people who were flipping and still going direct to seller, they ended up doing okay in that kind of market, right? So that would be one example. Would be flippers don't necessarily buy always based on the economics of the deal. There could be some level of perception that's involved in that that could cause them to buy higher or lower based on perception of what's going on in the market in such a way that might not exactly match the retail market because they're trying to look six months in the future and often they're going to be wrong about what's going to happen. So just like utilizing that as an example."

Brandon: "But the only way I can think to really know that is you have to know like at what percentage of ARV properties are selling for cash in a market more recently. So anyways, I'm just, they're just you like a jumbled mess of like random thoughts. Do you have any thoughts on any of that?"

Donato: "Yeah, yeah, no, that's really interesting. It brings up a good point, the discrepancy between data-backed decisions and folks who are transacting real estate based off, you know, their local knowledge or their gut feelings, right? And the potential opportunities that exist for wholesalers to sell to investors that have potentially a rosier outlook than they do based off the data they're seeing. Um, I think wholesalers that are operating on a what's happening 6 month, 12 months out and checking what's going on in the local market that they're already spending, you know, ads on or doing PPC on, will be the ones that can better buffer themselves against turning tides like when the interest rate environment is changing."

Brandon: "Um, and then for flippers, I mean, you talked a little bit about how flippers who were able to go direct to seller, almost cut out the middleman there, will be able to be more successful. Uh, personally, as a wholesaler, I would, I'm a little cautious whenever someone is able to or interested in cutting my out from my entire portion of the business, and which areas they have the capacity to do so."

Donato: "Um, but it's really interesting, you know, where one man's trash another man's treasure, and that's really the thing what you're describing there, uh, for folks who are willing to ignore the data to transact where they feel like they can. But I think what we also pointed out was when you do that, you're also the person at the most risk for when those retail prices start to tumble, and cash buyers, even more so than the data backs up, are more fearful then say they necessarily should be from an analytics approach."

Brandon: "And it always makes sense after the fact, right?"

Donato: "Right, they shouldn't have been so scary, but then there's another world where everybody lost a lot of money."

Brandon: "Think, well, you should've seen the read on the wall of what was happening here, right?"

Donato: "Yeah, but it is interesting how there's like, you know, with all markets, there's, there's some emotion that plays in, right?"

Brandon: "It does seem like for years we were kind of operating on the bigger fool strategy where like, yeah, I'll get this price, I'll get this property under contract, and is it actually worth paying this much for the property in a cash transaction? No, but I know that there's another person out there who's an even bigger fool than I am, yeah, and I'm gonna make the money because that person's gonna buy from me, right?"

Donato: "And then you can point to things like market trends like, well, look how much we've gone up the last couple years, let's see where we can go, like, like, and that's, you see your listing descriptions, or your, you know, wholesaler dispo, uh, descriptions talking about all the great things that are happening."

Brandon: "Um, absolutely, and that's kind of where you have, you know, uh, you know, a boulder that's kind of rolling downhill, and there's always someone that's going to be crushed afterwards, that's going to get worse than I am, uh, but eventually I think that that stops, you know, where we see, you know, huge market shifting events occur, whether that be something like COVID where interest rates drop really quickly, where versus interest rates come back up really quickly or legislation."

Donato: "At some point, things hit where fundamentals are required, and this guy, if I take a quick turn to the VC industry for SAS companies, right, uh, when you're looking at valuations for software companies, people are raising capital, and there's a period of time where it's like, you know, what, a billion dollar valuation, I don't care that you're, I don't care that your churn's at 30%, and I don't care that you've never made a profit, and your LTV is non-existent, uh, that's fine, uh, we're just going to keep pumping cash in this thing until—"

Brandon: "Yeah, all of a sudden, things aren't as rosy anymore, and then that's when fundamentals matter, that's when valuations come down, that's when people start reconsidering what they're willing to do because the safety net of there's another fool out there starts to diminish."

Donato: "So, in this point in time where we're seeing the market, uh, continues to really fluctuate, I think fundamentals matter more than ever, but other side of that, had a lot of talk from the Fed recently on what's going to happen, say, September, October, November, December of 2024, and if we're coming on the other side of what 2023 and 2024 have been—"

Brandon: "Yeah, and so I think we're going to see a potential return to the fact that, look, we made it through, and I think you're going to see it over, almost like overzealous, uh, population of real estate investors that are going to say, back to business as usual, things are easier again, and I, I can just see that, folks—"

Donato: "Who are too anxious to be able to use a strategy of a bigger fool's coming behind me too quickly into a potential turning of the market might find themselves just at the final point they're about to cross the finish

line stumbling because they were too ready to go back to a point where they could overpay for a little bit on these assets."

Brandon: "Yeah, yeah, makes sense. You're like the Warren Buffet of market selection."

Donato: "I mean, I'd love to have that comparison be made six years—"

Brandon: "Yeah, yeah, it's a few years, hey, I turned 25 two weeks ago, so I got a what, 70 years on him, something like that."

Donato: "Yeah, yeah, I say, you know, you don't, you don't quite have the track record yet, but you know, in terms of, in terms of thinking and philosophy."

Brandon: "Exactly, that's cool. Okay, so to summarize what you said, it sounds like like the fundamentals, in your opinion, you're saying maybe this changes a little bit based on like, you know, the bigger fool strategy, what's happening in the market, like emotions, etc., but like the real fundamentals here behind everything are, what's the median home value, and, and I imagine you, you'd probably say well, you don't want to be looking for really low median home value because there's not a lot of money to be made on those deals, no, you have to—"

Donato: "There's gotta be on above, um, and then you're also looking for appreciation of that median home value, so you know, we're not looking at a market that's been hit really hard recently. Ideally, if there's theoretically if there's a solid appreciation over time, then there's also equity, and if there's not a fall appreciation over time, there, there's less likely to be equity, of course, there's always, there always can be, um, and then days on market and why new listings on the market, which I imagine—"

Brandon: "Is kind of, it's like days on markets sort of what's happening, and then, and then new new listings on the market is sort of like the forward-looking look at what's probably going to happen to that market like if that's increasing at time, then, then it's likely that there's a market will increase soon."

Donato: "Yeah, generally like generally it's inverse relationship where as the new listings drop, uh, on market, um, depending on other certain fundamentals like if my days on market are continuing to increase, right, then I would usually expect that there are more properties on the market, right, so new listings are increasing, but if I'm seeing a very specific situation where my days on market is increasing month over month, but my new listings are going down month over month at the same time, that gives me a huge red flag on demand in my ability to be able to transact or sell to someone based on the fact that we're not seeing a lot of business moving on, on the flip side."

Brandon: "Yeah, if I'm seeing my new listings continue to, what was that, uh, go up, and my days on market are continuing to go down, huge green flag on demand for this area on what's continuing to happen in my ability to look forward, uh, as a marketer, and so exactly—"

Donato: "Yeah, but that would all be retail demand generally, so—"

Brandon: "Yeah, are you aware of any way to measure similar things from a cash buyer standpoint, or are we kind of like left looking at the retail demand as kind of the fundamental probably behind the cash buyer demand and sort of looking it that way?"

Donato: "Yeah, so when looking at a cash buyer perspective, a lot of the value that cash buyer is bringing in via a wholesaler is the fact that they are bringing off-market opportunity that generally speaking is going to be more affordable or it's going to be at a better margin than what you can get on MLS, yeah, right, that that's a huge value component for the end buyer of a wholesaler, and so if I'm tracking the retail market, and the retail market, I'm watching home prices continue to decrease while my days on market are going down and new listings are going up, I'm in a situation where it's getting more and more difficult for me to yield a better margin or a different transaction than someone can get on the retail market, and so I think wholesalers are in this almost never-ending battle kind of quid pro against the MLS and what people can get on the retail side based on the fact that their huge value component is that they're bringing deals that offer a better margin or easier access or this kind of secret treasure trove of opportunity that people can't find anywhere else, and so I don't, I think the smart wholesalers are the ones who are keeping an eye on the fact that they're not just competing against other wholesalers, they're competing against this large—"

Brandon: "Oh, jeez, millions of consumers and mom and pop flippers that are looking for an opportunity, or even more institutional who are looking MLS and a retail investor side to pick up opportunity, and so I don't necessarily have an idea on—"

Donato: "Or don't have a way that I could be tracking how long days, how many days, or really in some cases hours it takes from an off-market property to be sent out to your dispo list and then picked up, uh, but it's something that I think wholesalers have to be cognizant of if they're going to continue to operate in this market where you have millions of both consumers and hundreds of thousands of investors on the sidelines who are watching retail prices as an indicator of their buying activity."

Brandon: "Yeah, that makes sense. Cool. Is there anything else you'd look at?"

Donato: "Yeah, on a more specific level, like when I'm looking at a deal by deal basis, so for example, if I'm getting leads through, you know, my acquisition channel, PPC comes in, hits my CRM, and my VA is looking at them, I almost always keep in mind my end client, so am I selling, if I am going to plan to wholetail this, or do like a novation, and I'm going to sell to an owner-occupant, they are very much going to be concerned on local school rankings and local crime, and so if my end strategy I want to include somehow involves going direct to consumer for this asset in some way, um, I don't necessarily have to build in a margin for those folks, so I'm able to go to maybe a little bit higher median home price, but things like being on a double yellow road, having school rankings that are above a four out of ten on a Great Schools ranking system, and being avoiding of areas that have higher levels of aggravated assault, simple assault, vehicle break-ins, or uh, weapon law violations are all things that your end consumer is going to be watching or their agent is going to be advising them on, uh, when they go to transact on the investor side, if I am—"

Brandon: "Trying to sell a property, I'm also generally going to look at things such as uh, local income, local franchises, a lot of investors will buy off of, well, if Chick-fil-A and Starbucks and Target are here, then I want to be here, so looking at assets that have proximity to those types of huge, almost indicative of what's coming to an area establishments, is a great way that I'll use to double check uh, what other companies are doing in the area, so then not when I'm going to dispo that property, I'm saying, look, half a mile from your Starbucks, quarter mile from your Chick-fil-A, income's going up, rent growth year-over-year is up 10% or 5%, whatever that number is, those are the things that I know my investor client on the back end are going to be looking at, so I'll check all those things as well, so my ideal situation, after getting to a market that has the right, let's say days on market, home price, and new listings, if I have an asset that is also around high school rankings, low crime, with proximity to those higher income targeting establishments with year-over-year positive rent growth, all that upfront work makes that property a steal to sell on the back end, so you're decreasing your time to sale, and you're able to start transacting properties a whole lot easier, and you don't get stuck with, I can't move this asset, and that's what a wholesaler's worst nightmare is, right? I've got 10 properties under contract, and my EMD or my um, my window to withdraw is in seven days, and no one's biting, so we want to avoid having to hold those properties on books by looking at some of those more specific intra-market things on a deal by deal basis."

Brandon: "Okay, that makes sense. So you wouldn't look at it and say I'm not going to target this area because of this. You'd more look at it as well, now that we have a deal available in this area, this is the information I'm going to use almost as like uh, as part of the comping process, like understanding how much you're going to be able to sell this for."

Donato: "Absolutely, I mean, once you have some of your highly market indicators saying, look, I'm marketing to this area, the next step is on a deal-by-deal basis saying, what is my risk tolerance for the specific asset, like, I know this area, let's say the zip code is definitely something that I'm interested in, but this street over here, I'm going to have more time, like you said earlier, right, which county on this side of the county I'm doing

great, this side I'm not doing so hot, can we get that specific on a deal by deal basis, so it's part of the comping process, I know before I ever write that offer or my I'm going on an acquisition manager doing a know um, a meeting with the seller, I know exactly what my likelihood is being able to sell this thing based on the street by street analytics, so that way you go down from hey, two out of ten properties or three out of ten properties that we're picking up, we're having a really hard time moving, you can remove those overnight by just having a little more time spent on the analysis when you're prepping these deals."

Brandon: "100%, that makes sense. Anything else you look at?"

Donato: "I generally, well, ideally, this is someone who knows their buyer list, so I, I, this is more applicable to someone who's spent time curating their list and someone who has spent time interviewing some of their buyers, but I think it's critical to understand what their exit strategies are going to be, right, is this a person says, I'm going to turn this into an MTR or STR, I'm going padsplit on this deal, and it has to have, I'm going to be a room by room strategy, right, I really want to understand what is this person trying to do with this asset, not that I have to speak to every single person on my list, but having segmented out their top three strategies that they're trying to acquire properties for is going to be huge, whether I'm saying, look, I know this person, like in Seattle, right, is only targeting properties where they have lot size of over 5,000 ft, like can add an ADU on the back, okay great, so when I'm doing my comping strategy and my PPC strategy and I'm targeting these areas, and then I get my VA who's doing the comping, if it doesn't have this type of say lot size, and I know a significant portion of my buyers in this area are looking for that strategy, why waste another second on that deal because you already know that a large majority of your buyer list is not going to want to take that deal down, and so things like that which is are they going to do a padsplit, great, then I need to have a pretty, I need to have the, you know, square footage or the capacity to be able to add some other bedrooms if I need to be able to do a short-term rental, okay great, what are my local RS looking like, or if I'm doing something like a mid-rental, are there major attractants such as things like in Georgia film industry or around major metros, major hospital systems that my end buyer is going to be successful, so if it had to summarize everything, try your best to set up your end buyer for success, so then you'll be successful, uh, if I, if I can make one piece of advice, knowing who you're selling to by using data in a fast way will help you move product faster, easier, and a better margin because you're matching what you have to sell with what your client is demanding."

Brandon: "Got it, that makes sense, that's cool. T, I'm gonna have to listen to this, this one again, and, uh, and see, uh, see what we can do to revamp some of the strategies that we're using to target markets for our clients because that's, it's super interesting, some of, some of the information that you shared. Um, any last words of wisdom before we close this episode out?"

Donato: "Um, I would say, thanks for having me on, and I would say, there are so many opportunities across the nation that real estate is a national game, that's why you've seen some of the top wholesalers and folks in our industry move away from markets they've historically been successful in and target secondary and tertiary markets in major cities and continuing to go to primary markets in smaller, less known areas. If you want to be successful, you got to go where the fruit is growing, and that means you got to play real estate on a national level, so if you're not already doing that, you need to, and if you are doing it, work with people, use the data, and target things effectively, you minimizing your CAC, you're minimizing your speed to lead, and you're able to move properties faster and easier than anybody else because your head's not the freaking sand, you can do it, so do it if you want to be successful, that's what I have to say."

Brandon: "Yeah, yeah, that's awesome. Thank you for your time and all the wisdom you shared with us today, and for anybody else listening, I will see you next week."

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