What REI Strategy is Successful in Phoenix Right Now?

13 Replies

Hello BP!

Question 1:

What REI strategies are being used right now specifically in the Phoenix metro area (mesa, chandler, Tempe, Gilbert...ect)?

Question 2:

I have been preapproved for a 125k loan. I have 6k cash. Would an FHA 203k be beneficial for my situation and area?

Thanks!

I expect the Phoenix market is extremely competitive. You are going to have to pick a niche and become the expert in it to break through in a market like that. No one is going to let you know what is working for them, learn as much as you can and then execute over and over and you will be successful.

I started investing in Phoenix in 2010 but have largely stopped as prices have gone up considerably and cash flow has shrank. I know of investors still buying multifamily and buying homes near Tempe as ASU creates rental demand. The economy is doing great out there but cash flow is slim now. On one of the more recent podcasts, he is an investor in Phoenix but buying in more rural areas. You should get in contact with him.

For your reference:

http://www.biggerpockets.com/renewsblog/2014/03/06/bp-podcast-060-serge-shukhat/

Originally posted by @Andrew LeBaron :
Hello BP!

Question 1:

What REI strategies are being used right now specifically in the Phoenix metro area (mesa, chandler, Tempe, Gilbert...ect)?

Question 2:

I have been preapproved for a 125k loan. I have 6k cash. Would an FHA 203k be beneficial for my situation and area?

Thanks!

What are you trying to do? Buy and hold? Fix and flip? Wholesale?


With and FHA 203k I want to flip/rehab a home in the span of a year. I'm not going to rely on the market, but simply put needed value in a70k to 100k dollar home.

I would love to wholesale. I work full-time and many wife is at home with the baby. I don't have much time to search homes and send yellow letters but on the weekends. I'm learning so much from BP daily. I just want to know wich strategy works best with 6k cash.

Should I jump into a house now?

Originally posted by @Johnson H. :
For your reference:

http://www.biggerpockets.com/renewsblog/2014/03/06/bp-podcast-060-serge-shukhat/

Like you said, asu is a perfect opportunity to buy and hold

@Andrew LeBaron

I'm buying off the MLS and at auction right now. With the little cash you have, you may want to try and partner with someone until you get more capital. Our market has really slowed down and it is easier to get properties than it was last year.

@Justin S. Hi Justin. How do you feel about the Phoenix market today compared to last year?

@Andrew LeBaron Hi Andrew. Just stumbled across this post and was wondering if you did wind up in a flip or if you went for something more long term.

Originally posted by @Mike J. :

@Justin S. Hi Justin. How do you feel about the Phoenix market today compared to last year?

@Andrew LeBaron Hi Andrew. Just stumbled across this post and was wondering if you did wind up in a flip or if you went for something more long term.

Prices are even higher than last year. I am seeing very little small multifamily (2-4 unit) that would have decent cash flow. I'm not going to do a 0.7% deal on a 4 plex, where the rents barely cover the PITI. Especially not when I know many are C class properties in C class areas.

@Anthony Gayden Hi Anthony. Thanks for the heads up. It sounds like the market is certainly not what it was from a few years ago. If you don't mind my asking, have you shifted your search to other areas? I've been hearing that Pinal, Pima, Ft. Huachuca are slightly better.

PS. I see you're in Tucson. I went to college out there. Bear Down!

Originally posted by @Mike J. :

@Anthony GaydenHi Anthony. Thanks for the heads up. It sounds like the market is certainly not what it was from a few years ago. If you don't mind my asking, have you shifted your search to other areas? I've been hearing that Pinal, Pima, Ft. Huachuca are slightly better.

PS. I see you're in Tucson. I went to college out there. Bear Down!

 Yeah, I live in Tucson, and am buying here for now. I still am focused on small multifamily, but the numbers make better sense. 

Just as an example, I have one under contract right now:

- 4 plex, 2 duplex buildings, each with individual fenced yard and laundry room

- built in 1986

- 2 bed/1 bath 800 square foot units

- monthly rents $600 per unit, $2400 total

- all utilities are separately metered including water

- purchase price $170,000

In Phoenix a similar property would be listed for over $250,000. Since my focus is cash flow, I just had to step away. My one property in Phoenix might be the only one for a while, unless prices come back to reality. If not, I will enjoy the nice gain in appreciation that I am receiving and continue investing in Tucson for cash flow.

@Mike J. - Phoenix market was a lot better this year than last year.  We had our usually spring pickup but now the market has slowed quite a bit, which is normal.  I don't see prices going up much again until next Spring.  We should get a small pickup in buying in October timeframe and then we will slowdown again until February.  

@Anthony Gayden  Sounds like a solid plan of attack on your current Phoenix property as well as your focus on Tucson. And it looks like you picked a winner on the 4-plex. Congrats!

@Justin S. Thanks for the heads up on the Phoenix market. The timeframe sounds somewhat similar to the LA market.

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