When March Madness Meets Real Estate Investing Metrics

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when March Madness meets real estate investing metrics by Colony American Finance

NCAA March Madness is in full swing. As real estate fanatics who enjoy sports, it’s another opportunity to test our unorthodox method of selecting teams and predicting results based on investment market data. In our last attempt, we accurately guessed the close win by New England over Atlanta in Super Bowl LI. Was this a mere coincidence or is there a strange correlation between the performance of local real estate markets and local sports teams?

The Real Estate Connection

Before we put our metrics to the test, I’d like to mention that a strong connection between basketball and real estate already exists. In fact, the NBA holds annual forums where players learn from other players about real estate investing.

Former Indiana Pacers All-Star Danny Granger said he made more money from his real estate investments than from his basketball paycheck in his final year of the NBA. Granger oversees a portfolio of more than 200 properties, mostly income-producing rentals in various markets.

Another player, former Los Angeles Lakers forward Devean George, runs a real estate firm that buys, develops, flips and holds rental properties in markets like Minneapolis, New Orleans, and South Carolina. Obviously, these basketball stars have done their real estate investing homework.

Method to our Madness

Let’s be real. If there were a scientific method to our predictive madness, we would be professional sports analysts or statisticians. We’re not. We can’t compare to Nate Silver or even Paul the Octopus. What we did was combined data that measured the top 150 fix-and-flip investment markets and the top 20 single-family rental markets and matched them with nearby college basketball teams and their overall ranking, win-loss record and NCAA championships.

After comparing matchups based on these factors, we derived our final bracket below. Read on as we highlight our selections for the Final Four and their respective real estate markets.

2017 NCAA Championship Bracket

Final Four Picks Real Estate Investing by Colony American Finance

View our complete bracket selection for all 64 teams and matchups.

Winners of the East

Duke Blue Devils – Durham, NC
Duke University in Final Four by Colony American FinanceRental Market Ranking: 13  |  Fix and Flip Ranking: 48  |  Basketball Ranking: 7 | Championships: 5

No team in the East has won more championships than Duke and its title town of Durham, North Carolina. Off the court, the local real estate market also wins with a 7% annual home price growth, a 2.2% annual job growth and 7.1% three-year population growth. Prices here are undervalued by 15%. Also, Durham ranks 48 out of the top 150 fix and flip markets based on its flipping potential, renovation costs and quality of life.

Winners of the West

Florida State Seminoles – Tallahassee, FL

Florida State University picked in the final four by Colony American Finance

Rental Market Ranking: 2  |  Fix and Flip Ranking: 25  |  Basketball Ranking: 10 | Championships: 0

Despite not being in the tournament since 2012, the Seminoles enter this year strong with a 25-8 record and a 10th place ranking in the NCAA. They are a team with upside and so is their local real estate investment market in 2017. Annual job growth is 4.1%, combined with a 5.1% three-year population growth and 9% annual home price growth. Homes can be found in this market well below the national average, and its fix-and-flip potential is near the top of the charts.

Winners of the South

Middle Tennessee Blue Raiders – Mursfreeboro, TN

Middle Tennessee State University picked in Final Four by Colony American Finance

Rental Market Ranking: 8  |  Fix and Flip Ranking: 13  |  Basketball Ranking: 48 | Championships: 0

The Blue Raiders shocked the NCAA tournament when they beat Michigan State in 2016. This time around, they are an even more dangerous team, having already beaten some top-seeded schools. The local real estate market is among the fastest-growing cities with a 6% three-year population growth. It also enjoys a 9% annual home price growth and 2.7% annual job growth. Homes here are also underpriced and have a top-15 flipping potential.

Winners of the MidWest

Kansas Jayhawks – Lawrence, KS

University of Kansas picked in Final Four by Colony American Finance

Rental Market Ranking: n/a  |  Fix and Flip Ranking: 37  |  Basketball Ranking: 2 | Championships: 3

Earning a 13th straight regular-season title, the Jayhawks dominated the Big 12. Although Kansas was bumped last year in the Elite Eight by Villanova, they are on track for a deep run into the finals with an incredible lineup that’s earned them a number 2 NCAA ranking and a 28-4 record. Even without rental market data, Lawrence and its surrounding markets score high on the fix and flip scale, including ranking fifth for the quality of life category.

NCAA Championship Prediction

The odds of predicting a perfect bracket is 1 in over nine quintillions. No one has ever accomplished it – not even close. While we’ll be celebrating each and every pick we get right, the real fun for us is trying new methods of selection based on different real estate investing data.

As the 2017 NCAA Championships eventually come to a close, we believe that Florida State will out muscle Middle Tennessee. The hometown of the MTSU Blue Raiders has a slightly higher fix and flip potential, but the Florida rental market surrounding FSU remains at the top.

The FSU Seminoles also rank much higher than Middle Tennessee for the season, giving it the needed edge to win in our outlook.


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