Today I'm giving the stage to Gino Barbaro. I met Gino earlier this year when I was featured on the Wheelbarrow Profits podcast with Gino and his business partner Jake Stenziano.

Jake and Gino are specialists at buying apartment buildings and multi-family investment properties. They've built a large portfolio of real estate and these guys provide a wealth of information on how their business works.

Gino knows a lot about how to identify and explore new markets. This information is important because not all markets are created equal. Some areas are ripe with opportunity while others have some serious challenges when it comes to finding deals with built-in equity and major cash flow potential.

When you understand how to move outside of your immediate sphere and identify other markets that can provide the growth opportunity you need, you'll see how powerful this information can be.

Are you having trouble finding deals in your market?

Does it ever seem impossible to track down any properties with positive cash flow?

You are not alone in that sentiment. I live in the New York metro area, about an hour north of New York City. My market is notorious for properties with very poor cash flow because of high taxes, high insurance costs and high costs per unit.

When I started looking for solutions, I had two choices. I could either change my investment strategy to fix and flips or look outside my market to continue pursuing properties with better cash flow.

I didn't want to become a fix and flipper because I already had a job. Since I wanted to build my sources of passive income, I decided to start looking in other markets.

Lady luck was on my side because when I was making this monumental decision, my partner Jake was packing his bags and moving from New York to Knoxville, Tennessee – an emerging real estate market.

What is an Emerging Market?

Simply put, an emerging market is an area experiencing growth, adding jobs, seeing an increase in population and a surge in construction.

How can you start to analyze a market before you commit any capital?

I have six important criteria that I look at:

  1. Job Growth
  2. Household Growth
  3. Construction Permits
  4. Demographics
  5. Tenant Laws
  6. Strong Government Leadership

Job Growth

In real estate, everyone has heard the term “Location, location, location” but I like to use the term “Jobs, jobs, jobs!” when analyzing a market for potential.

The demand for apartments will increase when a city is adding employment. Jobs are a driving force when it comes to people relocating to another city. Jobs have a multiplier effect; in essence, when one white-collar job is created, two to five blue-collar jobs are created to service that white-collar employee. We strive for at least a 2% job growth rate for at least two consecutive years.

To access data for jobs in a market, Google the name of the city and “job growth”. At the time of this writing, Knoxville, TN is ranked 99th in job growth with a 2.6% growth rate. You can also use the website to gather employment data for a specific city. Another site to gather information on demographics is the U.S. census website. If you Google the name of the city, a treasure trove of data will appear.

Become familiar with the employers in the market, and be aware of any announcements of new companies relocating to the market. Once a company announces a move to the market, it can take up to two years before the company is established. First comes the construction jobs; then, once the factory or office building is complete, the company is ready to move into the site.

Job Growth


Focus on the number of households, not the total population. The number of households will tell you how many potential groups of renters there are, while population only focuses on the number of people living in the city. If you see a decrease in the number of households, the demand for rentals will also drop and rental rates will follow.

One statistic I like to focus on is the migration of people to a city or state. For instance, Florida has overtaken New York as the third most populated state in the country. Florida is definitely an emerging state due in part to the influx of people relocating to the state. Factors such as job growth, cost of living and quality of life have contributed to this growth.

New Markets


Go to the town hall of the city you are researching and look up the number of building permits. They are a good indicator of a city’s growth, and when a rise in construction permits is seen for 2 or 3 years, you are in the midst of an emerging market. You can also see if a city is adding too many units and is being overbuilt. In this case, supply may outpace demand, and rents will begin to decrease to absorb the excess supply.

A saturated market presents a huge problem for landlords and will allow tenants to move up to better apartments with very little increase in rent. Most new apartments built are loaded with amenities. If you own a B property next to this new apartment complex, tenants will move to the newer, shinier apartment.

Construction Image


I like to focus on people in their 20s-30s and those who are 55 and older.

The middle-aged demographic tends to have families and are more prone to buying homes rather than renting. Focus in areas where the population is single and where families are young and small. America is becoming a renter nation for a couple of reasons. Graduates who leave college are saddled with student loans and often can’t afford to purchase a home. Another factor is that workers are being hired as contractors, what is also referred to as 1099 employees. These employees want the luxury of being able to live wherever they want and prefer to rent. Pride of homeownership, once a staple in American culture is definitely on the decline.

Market Demographics

Tenant Laws

It would be prudent to learn the tenant laws of a specific city. I can tell you from experience that New York tenant laws favor the tenant, to put it mildly. In contrast, Tennessee laws favor the landlord and eviction times are much quicker. You need to be able to remove a non-paying tenant as quickly as possible.

Tenant Laws

Strong Government Leadership

When analyzing a market, contact the local government to see if there is an economic development committee committed to attracting businesses. Some cities develop a master plan and economic zones to attract companies to relocate to their city.  A city with proactive business policies is a market you want to be investing in.

Now that you’ve started researching markets, it’s time to choose a market. 

Steps on Choosing a Market

  1. Choose an emerging market based on the criteria above.
  2. Begin researching the market for tax laws, tenant laws, and quality of life.
  3. Choose the type of property to invest in: A B C D, and the strategy you will employ.
  4. Research properties on Loopnet to find brokers in the market.
  5. Use Realtor , Zillow, and Trulia for more market info.
  6. Begin contacting brokers to discuss the market.
  7. Use BiggerPockets to begin networking with real estate professionals in the market.
  8. Choose a date to visit the market and schedule appointments with brokers and property managers.

Once you have chosen an emerging market, it’s time to visit the market and start building your portfolio. The fun has just begun!

Gino BarbaroGino Barbaro is the co-creator of a unique framework known as “Wheelbarrow Profits”, which entails the three pillars of real estate: Buy Right, Manage Right and Finance Right. Through this framework, his company has grown to a portfolio in excess of 675 units within two and a half years, enabling him and his business partner to transition out of their jobs and become full-time investors.

Find out more about Gino's work at

About the author

Seth Williams is the Founder of - an online community that offers real-world guidance for real estate investors.

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