Example property yielding strong returns in Sedona, AZ

[Chad McMahan]

Regardless of how predictable many elements have been, we are in turbulent economic times. It's more important than ever to invest wisely and earn strong reliable returns. For many years I have been posting on BP, as well as reading hundreds of real estate investment posts on BP and hundreds of articles, elsewhere, as well as hosting multiple podcasts and Youtube channels, and guest speaking on (too many to count) other podcasts as a real estate investment expert.

My goal for this post is not to convince anyone of anything, but simply to provide an example of a property in the Greater Sedona area that I consider a solid STR investment. As you continue to read, know that I watch my local market (Primarily Sedona and Cottonwood) closely and have for years, so I have witnessed and studied trends. In addition, I'm one of the top experts on STR related AZ real estate law, and I have my finger on the pulse for what's happened, is happening and will *likely* happen (based on interviewing and staying in touch with local mayors, closely watching possible new AZ STR laws, etc) to AZ and local STR restrictions. I am not a real estate attorney, and do not give legal advice.

There is a lot of incorrect information floating around about Sedona as a STR location and it's STR restrictions. Many BP-ers have watched my interview with the Sedona mayor, Scott Jablow.

Bottom line- reach out to me to discuss, if you have concerns. Sedona proper (city limits), as well as Greater Sedona Area (also includes VoC, Oak Creek Canyon, Upper Red Rock Loop Rd, Lower Red Rock Loop Rd, and a few other outskirt areas) are STR friendly at the time of this posting, as long as properties do not have STR restrictive CC&R's (notice I didn't say "no HOA"- which is incorrect and quite trendy to say for many people, including agents that should know better).

The following Sedona property example is available for purchase at the time I am posting this. There is no guarantee that the seller will agree to the following price. There is also no guarantee that if you want to pursue this it will still be available by the time you submit an offer.

Purchase price $1,250,000

Earnest $20,000

Typical inspection period - 10 days

35 day escrow

2nd home financing- 90% LTV = Approx $125k down payment + escrow/lender fees

2 renovation options:

1) $75k renovation (new flooring, remove 2 walls to enlarge community spaces, adding more glass to walls for improved natural light and big views, add a bedroom with adding 2 walls and a door to the office, upgrade kitchen and bathrooms = $1.42M ARV + $200k-$220k gross annual STR revenue

For those seeking anything at the 1% rule. This is 1.26%, including renovation + PP.

2) $145k renovation (All of #1 + converting the garage to 2 bedrooms + a bathroom, and expanding the septic system) = $1.53M ARV + $250k-$270k gross annual STR revenue

For those seeking anything at the 1% rule. This is 1.5%, including renovation + PP.

There are currently other strong ROI/STR options in the Sedona/Cottonwood areas with purchase prices from $500k (Cottonwood) - $3.5M (Sedona). Reach out with questions.