Worth Investing in Arizona?

11 Replies

@Albert Gutierrez really depends on what you are willing to accept, if 6% cash on cash and 4% appreciation is solid for you then sure, if you are expecting 10% cash on cash and 8% appreciation, probably not going to happen in AZ.

No! It is over inflated! Wages are still at a nation low and no one can afford the prices that inflate with the hype of Arizona Massive competition and very low if any returns, this is current as of July 2019 according to local REI group, stats and trends.

many replies, I was just looking at equity vs cash flow for out of state deals, realistically, I'm looking for something that "makes" sense in terms of investing so I guess I want to know average CapRates for Arizona 

@Albert Gutierrez to be honest, I don't look at cap rates when I invest. I look at cash flow vs. what I have left into the property after I have refinanced the property into a long term loan. With that being my metric, I think Arizona is wonderful. On most of our deals, we are able to acquire with only a few thousand dollars left into the property after we use the BRRRR strategy combined with the lease option strategy. And with most of our properties we are able to cash flow $200 or more per door. But, I should let you know that we have systems in place that help us acquire discounted properties, rehab them inexpensively, and lease option them out for a premium rent and a $3900 option fee. So the average investor in Arizona probably does not get the same returns that am able to create in the same market. I don't say that boastfully, I say that to give a proper perspective so that new investors don't jump in with unrealistic expectations.

Originally posted by @Shiloh Lundahl :

@Albert Gutierrez to be honest, I don't look at cap rates when I invest. I look at cash flow vs. what I have left into the property after I have refinanced the property into a long term loan. With that being my metric, I think Arizona is wonderful. On most of our deals, we are able to acquire with only a few thousand dollars left into the property after we use the BRRRR strategy combined with the lease option strategy. And with most of our properties we are able to cash flow $200 or more per door. But, I should let you know that we have systems in place that help us acquire discounted properties, rehab them inexpensively, and lease option them out for a premium rent and a $3900 option fee. So the average investor in Arizona probably does not get the same returns that am able to create in the same market. I don't say that boastfully, I say that to give a proper perspective so that new investors don't jump in with unrealistic expectations.

Hi Shiloh,  

This is very interesting. Do you always go for off-market deals? 

 

Originally posted by @Shiloh Lundahl :

@Aaron David Lietz not necessarily. I would say 1/3 of our properties still come straight off the MLS or Zillow. We look for deals where the numbers make sense.


Oh ok, that's awesome. I've been discouraged recently b/c I keep running the numbers on properties and they just don't cash flow that well in the valley. I feel like I need to sit with someone who is successful and pick their brain on this market. 

There isn't a lot I wouldn't do to get into my local market, but like it is stated above, it has been completely discouraging, so much so that I quit the whole business.  Sick and tired of driving to other states that are also now inflated, being a beaten and abused long distance landlord, and running numbers here at home where I live AZ I have not found a deal at home in over 10 years. Probably due to the belief too many CA residents with new wealth from Chinese buying up all of CA and coming here and overpaying for everything, it's infuriating to live in a place where everyone is after everything, high demand is terrible to live around much less to invest in.  Just being a resident I had to take a menial job to pay skyrocketing taxes due to greed coming from CA, all my neighbors are from there and they overpay for homes, jacking up my expenses, bringing with them noise, pollution and traffic.  I am running out of savings and 100% discouraged.  I used to love rehab.  But I have not been able to invest in my own sate for over a decade. 

This post has been removed.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here