Flips in West Valley, Phoenix

15 Replies

Hello,

Would any of you be willing to provide some contacts/brokers, whom you have had positive experience with, that invest in or list properties in the West Valley of Phoenix, specifically Mesa, Apache Junction, Coolidge, and Casa Grande?

Thanks!!

Updated 4 months ago

Would any of you be willing to provide some contacts/brokers, whom you have had positive experience with, that invest in or list properties in the West Valley of Phoenix, or specifically Mesa, Apache Junction, Coolidge, and Casa Grande? Thanks!!

@Jared Carpenter just for reference, those cities are in the East Valley, not the West Valley. 

@Shiloh Lundahl

Thanks! I forgot “or” which happens to be a key word in that sentence. What is Blue Equities focus?

@Jared Carpenter Blue Equities is the company I use to flip properties. I use different companies when I am holding properties.

@Shiloh Lundahl

Understood. Are you actively flipping in AZ, if so what does your pipeline look like?

@Jared Carpenter we were flipping more in 2016, but in 2017 we slowed down on our flipping and started to lease options. We get 1/3 of our properties from wholesalers, 1/3 from the MLS, and 1/3 from my partners advertising.

Hi Jared! I work for a mortgage broker here in the Valley and would be happy to take a look at any deals you may have. My contact information is on my profile, I'd be happy to hear from you anytime!

Simone

@Jared Carpenter I know the whole Valley, but have to admit that Casa Grande, Apache Junction, and Coolidge are not on my radar at all (nor do I want them to be).  They are pretty far on the outskirts of town.  I am sure that opportunities may exist in these areas, but since they are so far away, they aren't areas I service.

Mesa is more local to the Valley, and so is the West Valley.  If you are looking for some off market or wholesale opportunities there, or other parts of Greater Phx area, PM me, and I would be happy to pass along the ones I get regularly from my network of wholesalers.  Some of them are good flip opportunities.  Others would be better buy and holds that give you good equity to start (maybe there isn't enough to flip it, but it's still priced under retail).  So, if you let me know what your investing strategy is, I can target only those properties that fit.

@Cara Lonsdale Mesa, Apache Junction, Coolidge, Florence, and Casa Grande Are some of my favorite cities to invest in. The cash flow in the cities makes sense and I like smaller towns also. They are very high maintenance because I sell the properties on lease options two end buyers and they take care of the properties.

Updated 2 months ago

I meant to say very low maintenance. Not high maintenance.

Originally posted by @Shiloh Lundahl :

@Cara Lonsdale Mesa, Apache Junction, Coolidge, Florence, and Casa Grande Are some of my favorite cities to invest in. The cash flow in the cities makes sense and I like smaller towns also. They are very high maintenance because I sell the properties on lease options two end buyers and they take care of the properties.

 That is why I included the caveat that there may be opportunities within these areas, they are just not areas I service.  Additionally, I worry about your approach as it really relies heavily on appreciation in those areas, which traditionally do not appreciate much.  What happens when the 5 years is up, and the Tenant can't get financing because the property doesn't appraise?  Have you reached any of those 5 year terms yet?  I would love to hear your experience (genuine interest) on closed deals on these 5 year lease purchase deals.  Do you structure the lease option as an aggressive buy down of the principal so that by the end of the 5 years there is appreciation through principal reduction?

I remember when cities like Maricopa and Arizona City were all the rage.  They were marketed as the "new Ahwatukee".  Floods of people went down there to buy brand new houses for dirt cheap....and then quickly realized why.  There was no infastructure.  Nowadays, you can buy handfuls of houses in Arizona city for pennies on the dollar, but no one to move into them.  It's a ghost town.  

Again, there is no doubt that opportunities exist anywhere.  But those outlaying areas are not for me.

Our model doesn't depend on high appreciation. For instance, we are under contract to purchase a property there from a wholesaler at 88k. The ARV is 120k and the house only needs a little in work (about 5k). We will sell it on a 4-year lease option for 129k. The likelihood of the house appreciating 9k or 7% in 4 years is pretty high. Lets say the house goes down in value for some reason and is only worth 110k after 4 years. The tenant can decide not to exercise the option and buy somewhere else, or we could lower the purchase price, or the tenant could come in with a higher down if they really wanted the house. But if they didn't want to exercise the option then they could move and they wouldn't have to worry about selling the house and paying all of those closing costs or losing money as they would if they were to buy it today and then sell it in 4 years for a 10k loss plus closing costs.

We have not reached the 5 year term on any of our options yet.  We did 5 year options last year.  We are doing 4 year options this year, and 3 year options next year.  In 2022 we are planning on grouping the profits from the options that get exercised and doing a 1031 exchange into larger, higher cash flowing assets.

Originally posted by @Shiloh Lundahl :

Our model doesn't depend on high appreciation. For instance, we are under contract to purchase a property there from a wholesaler at 88k. The ARV is 120k and the house only needs a little in work (about 5k). We will sell it on a 4-year lease option for 129k. The likelihood of the house appreciating 9k or 7% in 4 years is pretty high. Lets say the house goes down in value for some reason and is only worth 110k after 4 years. The tenant can decide not to exercise the option and buy somewhere else, or we could lower the purchase price, or the tenant could come in with a higher down if they really wanted the house. But if they didn't want to exercise the option then they could move and they wouldn't have to worry about selling the house and paying all of those closing costs or losing money as they would if they were to buy it today and then sell it in 4 years for a 10k loss plus closing costs.

We have not reached the 5 year term on any of our options yet.  We did 5 year options last year.  We are doing 4 year options this year, and 3 year options next year.  In 2022 we are planning on grouping the profits from the options that get exercised and doing a 1031 exchange into larger, higher cash flowing assets.

 It helps that you are starting off below market.  The wholesaler is a key player on your team it sounds like.  I will be interested to see how it goes, and look forward to following your progress.  I am rooting for you to succeed. 

@Cara Lonsdale thank you. We hold meet up groups in Mesa once a month and it has been great for networking. I’d love to see you there sometime.

Originally posted by @Shiloh Lundahl :

@Cara Lonsdale thank you. We hold meet up groups in Mesa once a month and it has been great for networking. I’d love to see you there sometime.

 I appreciate the invite.

Awesome strategy @Shiloh Lundahl .  We did that in Denver in the late 90s with several executive homes.  Built in aggressive escalators for the end strike price but never missed one.  Appreciation isn't guaranteed.  Everyone's learned that.  But It's still a pretty sure thing over the long haul.  and like you said you can always renegotiate to meet an under appraisal.

And of course in my world it allowed us to 1031 out which, you might guess, is a subject ever so close to my heart :)

@Cara Lonsdale as long as you don't get greedy and build in realistic appreciation factors you can even do this buying at retail.  It's a cash flow play with the exit strategy built in.  of course with a good wholesaler the cream at the top is just that much thicker!

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