I have recently decided to begin real estate investing in Arizona. I am currently looking for a triplex in Phoenix and will utilize the FHA loan and Bank of America Grant Home program along with my current finances. I would like to know if there are any other opportunities I can take advantage of in the Arizona market. I would also like advice about closing a deal.
Inventory is very tight in the Phoenix area, as well as AZ in general. For the most part there a not a ton of multi-family properties in the Valley, but they can be found in the Northern and Central Phoenix area. I think your strategy is sound with the FHA loan and B of A grant program, however getting a deal accepted with this financing will be a challenge. Many sellers are choosing 'all cash' offers or conventional with a sizable downpayment.
I would recommend locking on to an area first, seeing what types of properties there are first and then putting your offer in. In this market once you have the deal locked and loaded, as long as your numbers work, the rest should fall right into place. Good luck!
Not sure what your budget it, but it's gotten much harder to find multifamily properties on the MLS the last few years. The ones on the market are older, in rougher shape, and are typically located in the rougher part of town. Is there any particular area in town you've been looking at?
@Seth Ensminger there are absolutely opportunities in the Phoenix market to execute this strategy. Anyone who tells you otherwise doesn’t know what they are talking about. MF doesn’t move anywhere near as fast as single family in Phoenix If you’re willing to do the dirty work to improve the rents and the property, I could point you in the direction of a deal tomorrow. Holler if you want to chat strategy.
Caveat...the days of the 1% rule do not exist in this market. A 5-6% cap is pretty typical tho.
It will be very, very difficult to find and do what you are expecting in the current Phoenix market ... just being honest. It's too hot for sellers to consider accepting an offer utilizing a grant program. That type of offer just won't be strong enough to compete with the other buyers as @Ryan Husser mentioned.
But anything is possible, just not very likely in the current Phx market.