Rental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 385 posts · 421 votes
I have bought 7 single family homes so far this year. 4 long term rentals and 3 flips. The flips were from wholesalers and 1 from the foreclosure auction, they were cosmetic rehabs that were bought between $170k-$270k in Mesa, Casa Grande, and San Tan Valley; rehabs were $8k-$31k, and profits $17k-$26k.
The long term rentals have been from the MLS and from wholesalers, 3 were tenant occupied, so they didn't need any rehab and they were cash flowing on day one, these are my new favorite deals. I bought them between $220k-$260k in Casa Grande, San Tan Valley, and Coolidge, with $20k-$40k invested and $150-$300 in monthly cash flow, these are also my new favorite markets for cash flow with future equity growth. The 4th rental is a cosmetic rehab that I bought from a wholesaler, I have created more equity in this property, but having to buy it with a private money loan and rehabbing the property before I rent it out and refinance definitely cuts into the cash flow, takes more capital, and is a lot more work than the tenant occupied properties.
I'm curious what strategies and markets are working for other people in Arizona? And who else is liking or disliking tenant occupied properties?
Josh, impressive volume — 7 doors in 8 months is serious execution. The fact that you've already done a foreclosure auction is relevant, because tax deed auctions operate on a very similar playbook but with even wider margins.
I've been working with Broward County (Florida) tax deed auctions. The discount structure is different from what you're seeing with Arizona wholesalers. At auction, properties sell at 50-70% of assessed value — not because a wholesaler added a margin, but because most bidders don't understand the due diligence. The county sets the opening bid at the back taxes owed, which is often a fraction of market value.
On your tenant-occupied question — this is where tax deed gets interesting and tricky. In Florida, tax deed wipes the prior ownership chain entirely. That means any tenants are gone legally, but you may still need to evict. The discount is your buffer for that timeline risk. I've seen properties where the 30%+ spread covers 6 months of carrying costs plus eviction, and you still come out ahead.
Your cosmetic rehab numbers ($8k-$31k) are in the right zone for tax deed flips too. The difference is you can't inspect inside before auction, so the rehab range is wider — budget for the worst case, and the acquisition discount absorbs it.
Are you sourcing Arizona foreclosure auctions through the county sheriff sales, or are you using a specific platform?
I have a wholesaler that provides the foreclosure auction list on a spreadsheet every day, he has his title company do a title search on all the properties that are going to auction that day, and he will bid on the property and put up the $10k deposit for me, he just charges a $3k premium for his services (totally worth it in my opinion), so he makes it pretty easy. It is the same here that we don't get access inside the property before buying it, but I have noticed that a fair amount of the foreclosure I see are FHA loans that were sold on the MLS within the last few years, so I can sometimes find fairly resent photos from those MLS listings, still a risk, but it's so competitive here that I can't always walk wholesale deals either (if I try the good deals will sell before I get to the property), so I'm getting more used to buying off photos.
That's a solid setup with your wholesaler — having someone do the title search and put up the $10k deposit for $3k is a good deal honestly, especially when the margins on flips are $17k+.
The FHA photo angle is smart. I've been doing tax deed auctions in Broward County, Florida and running into the same thing — can't inspect inside, so you're working with whatever info you can find. The difference is our auction lists come from the county clerk directly, so I've been building a system to pull property details and recent sales comps automatically before each auction.
Have you ever looked at expanding to Florida? The foreclosure auction dynamics are similar to what you're doing in Arizona but the discount structure is different.