Is Cash on Cash Return Irrelevant in Arizona?

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

FYI, even if I found a deal where the CoC return was 0% or 2%, but I had room to renovate and increase the rents, obviously I would take that into consideration. But at -50-90%, it's pretty impossible to meet in the middle on that one.

4 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

5y

The immediate return (cash flow) is always factored against the long-term gain (appreciation). If you can get both, awesome! But sometimes its worth grabbing a low cash flow property if it looks like the area is heading towards 'gentrification'.......IMHO

3 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @Bruce Woodruff:

The immediate return (cash flow) is always factored against the long-term gain (appreciation). If you can get both, awesome! But sometimes its worth grabbing a low cash flow property if it looks like the area is heading towards 'gentrification'.......IMHO

In most of my calculations, I would take a 2 BR 1 Bath for example, and look at the area. If the ABSOLUTE NICEST apartment in the area was going for 1800-2000, I'd use 1900 as my rental income calculation. This still wouldn't bring the deal into the positive return %. It's just baffling to me I've gotten 2 responses from 2 different realtors and their statements were "you don't understand this market" . I guess they are telling me people in the Phoenix market are willing to overpay because it's Phoenix. I also have a very southern accent, so I believe there's a chance they think they're dealing with someone who isn't intelligent or a person who doesn't understand math and numbers, so maybe they think they can get one over on me, who knows the true reasoning behind their statement.

2 Reply

Dan Kerch

Lender · Phoenix, AZ · Member since 2020 · 34 posts · 12 votes

5y

Unfortunately I would not believe the realtors. I believe you can find deals that cash flow and have great CoC in every market. I do believe Phoenix has some overpricing issues but it's also one of the hottest markets in the country. Best option to find those smoking deals is to continue to network and learn more about the market trends. I hope this helps. Best of luck!

4 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @Dan Kerch:

Unfortunately I would not believe the realtors. I believe you can find deals that cash flow and have great CoC in every market. I do believe Phoenix has some overpricing issues but it's also one of the hottest markets in the country. Best option to find those smoking deals is to continue to network and learn more about the market trends. I hope this helps. Best of luck!

I want to private message you the listing and let you type the numbers in yourself to make sure I didn’t improperly calculate something haha that’s how outrageous some of these deals are, but I’m pretty sure I typed in the properties exactly for what the numbers were. I had never seen a -50% deal on any other place I’ve invested, yet being told here I don’t understand the market. Still hard to believe I’ve had 2 realtors try to look me in the eyes and tell me that. Also had one try to tell me on a 2 BR, 2 Bath in a not so great area of Phoenix that I need to calculate my numbers based off 2k per month rent. I laughed at that one in my head.

1 Reply

Scott Anderson

Rental Property Investor · AZ · Member since 2018 · 212 posts · 183 votes

5y

I got 12% on my last deal in a Mesa SFR strictly off monthly cashflow.

In reality I doubled my money 6 months later.

99/100 Realtors are ignorant to investing.

Luckily I’m my own realtor.

7 Reply

Dan Kerch

Lender · Phoenix, AZ · Member since 2020 · 34 posts · 12 votes

5y

You’re more than welcome to.

1 Reply

Nick Robinson

Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes

5y

@Ryan Stumbo
Hey Ryan,
I would keep looking there are a lot of overpriced properties, but there are deals out there. In July I closed on a 14-unit in Mesa, AZ for $1.91m (~$136K/door). This was a value add project and I ran my numbers pretty conservatively and ended up with an avg. CoCr of 7.4% over the next 5 years. Phoenix being such a hot market the PM just told me would should rent for $1,450 instead of $1,200 on 2bd and $1150 instead of $1075 for 1bd. If I get those rents that moves my CoCr up to 9.6% today.

If your getting those lousy of returns I would not buy those deals and look somewhere else. Right now if you want more bang for your buck I would look in Mesa or Glendale. You also need to find value-add deals. If something is turn key or you pay market price there is no way it will cash flow unless you are putting down a lot of money. That being said I have not looked into any residential properties, 1-4 units, so their value is based on comps where as 5+ units is based on the properties NOI.

3 Reply

Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

5y

Originally posted by @Ryan Stumbo:

So, recently I have been trying to branch out and buy real estate in other states. I'm currently working in Arizona so I thought "hmm it's nice out here, I should try to get a property or two while I'm out here." I am running into an issue. I'm very big on the numbers. I take every monthly/annual expense and calculate the cash on cash return, and if it isn't at least 8% then it's not worth it to me to even invest.

I have now went to 2 different realtors, looked at some multi-family properties, typed the numbers in, and I've had 1 deal come back as a -55% CoC return. Then another was at like -90% CoC return. I do my numbers and see what kind of price is doable for me. Now, obviously with the deal being that overpriced, I could just not even attempt it, but when something has been on the market for 120 days, I figure heck why not just make an offer. Even if they view it as lowball, attach my spreadsheet to the offer and show them their property is way overpriced without directly telling them that and maybe they'll come to their senses. Me thinking the realtors would respect math also and see that I'm correct, I've had 2 realtors tell me "you're just not in tune with the Phoenix market." At this point, I will ask them politely to explain what this statement means because my math shows this deal is a terrible deal. They didn't respond. Just the vague "you don't understand Phoenix market." So I guess my question is, is there something I'm missing? One of the realtors also said that if I'm looking for 5% return in this market I may as well go ahead and go back to where I was investing before because that ship has sailed. So is this a case of it's just not possible to find 8% returns in this market in a decent location? Or do they actually have any logic or math behind what they're saying. Is there some deeper, specific reason someone is willing to pay for something that returns them a negative % on their money? This 1 realtor also told me there's a lot of "institutional money" here and that people are willing to use real estate to park their money and just take the loss because it keeps the IRS from getting their money.

I suppose in summary I'm asking, 1) are these realtors just trying to talk me into a bad deal and I just lucked out with the 2 realtors I found

2) Do I truly not understand something about the market down here and these -50-100% returns aren't so bad after all? (lol unlikely, since math is math.)

3) are these realtors just intimidated by making an offer they view as lowball since the listing price is so overpriced?

If someone can explain to me what I'm missing I would be happy and open to learning and understanding. I'm just truly not understanding what it means to instead of critiquing a list price that leaves you with a -50% return, I am instead being the one critiqued for not "understanding the market" .. lol any info on this situation would be greatly appreciated.

Thanks in advance.

You are correct. Your math is good. I buy in several markets around the country. AZ doesn't produce the results it once did. If I don't cash flow $500 or more a month it's a pass. The risk is too great and I can't live on future promises of appreciation. Keep in mind the cost of sales as well. That alone negates the appreciation when you go to sell. Plus there's taxes.

What most investors don't do is what you said you base your numbers on, "I take every monthly/annual expense" etc. It's a bit tricky for new investors and they look at the gross numbers, not what winds up in their pockets. Plus it's an emotional experience. "Finally, I found a property where they accepted my offer and now I'm an investor!" Okay, so now what? I'm proud of you, but are you making more money than the hassle?

The questions they never ask themselves are "what if I have a vacancy" or rather they phrase it "I sure hope I Don't have a vacancy". And then eventually there are HVAC to replace, water heaters wear out, carpets need to be replaced, new roof, walls need to be repainted and on and on. One bad tenant with pets ruins a property and it's time to pour a lot of money into the property, . . . . . again. And then there are taxes . . . .again

Everybody in Arizona is a licensed agent, well, except for me. There are about 82,400 agents and more being added every month. Some of them actually know what they are doing. Everybody has become an agent so they can "buy cheaply" (fewer real estate agent fees they think) and get leads before everybody else. However, it doesn't really work that way. The normal market in the Phoenix area has something like 25,000 properties on the MLS. The MLS has been running about 5,000 properties recently. Way too low. That is 1/5 a normal market and there are more agents than ever.

3 Reply

Stone Jin

Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes

5y

@Ryan Stumbo

Post your numbers so we can all see what negative 90% returns look like

I recently bought a 3 plex in Mesa and will be getting close to 20% when I finish the value add for short term rental or 12% for long term.

2 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

@Account Closed are we allowed to post specific properties on bigger pockets and analyze the deals publicly? Lol If not no biggie, but this property in specific, I walked the entire property, looked in the units. Cute little units. Not the best area in Phoenix (Arcadia or something like that) but not the worst either. Realtor who listed it tried to tell me 775,000 for this triplex was a great deal.

Here are the numbers in the listing per the seller:

Insurance: $1552 yearly / 12 months = $129.33 monthly
Taxes: $1351 yearly / 12 months = $112.58 monthly
Landscaping: $713 yearly / 12 months = $59.42 monthly
Maintenance: 5% of rents
Property Management: 5% but from what I've learned most property managers get 6-10% so 5 is actually generous.
Water/Sewage/Trash: $2362 yearly / 12 months = $196.83 monthly
Adjusted Gross Income: $43,789.69 / 12 months = $3649.14 monthly rent (three 2 BR units so about $1215 per unit it sounds like are the rents monthly currently)
Vacancy: 3%

FHA Loan at 3.25% Interest
.85% PMI rate
5500 Closing Costs Approximately
$27,125 @ 3.5% down payment on $775,000 property.

If someone has the time today to just play around with this on one of their apps or programs and tell me what the Cash on Cash % is on this deal and if it's the same awful deal I'm calculating? Lol I was told this was a good price by a realtor. And that I need to kiss it goodbye if I want to see a 5% return. So I'm like "why am I even investing here then if it isn't to make money? Just to say I'm an investor in Phoenix. Whooopeee!!"

1 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Oh forgot Cap-Ex at 5% also.

0 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @Stone Jin:

@Ryan Stumbo

Post your numbers so we can all see what negative 90% returns look like

I recently bought a 3 plex in Mesa and will be getting close to 20% when I finish the value add for short term rental or 12% for long term.

No Problem man. I just posted 1 of the 2 deals, but the 1 I posted was in the -40-50% range. I want you to do the math also to make sure something I've typed in doesnt seem off. But those are all numbers from the listing and basic investor math such as all investment properties I've always been taught you use

5% Cap-Ex
5% Maintenance
5% Property Management
3% Vacancy (in this market)

If there are any more numbers you need let me know.

But basically rents $1300 per unit in triplex (so 3900 total) with an FHA loan, MINIMUM amount to put down and it still came out terrible. As I said, let me know if I typed something in wrong or something looks off because all of these numbers are directly from the seller's listing.

0 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

@Account Closed I understand exactly what you're saying on the one part of your response! It really does seem the realtors want me to just be happy that I'm an investor now and just be happy I got a property, instead of actually making money. It also seems some investors have this attitude as well. They are just happy to have a property but they use no math at all when buying something. I've also had 1 realtor down here keep using the "Cap Rate" every time he tries to explain a deal to me, when everything I've ever learned on real estate investing is a cap rate isn't really a good picture for a property. I've always been told CoC returns are your #1 number you want to look at when evaluating a deal.

0 Reply

Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

5y

Originally posted by @Stone Jin:

@Ryan Stumbo

Post your numbers so we can all see what negative 90% returns look like

I recently bought a 3 plex in Mesa and will be getting close to 20% when I finish the value add for short term rental or 12% for long term.

How much is the value add costing?

1 Reply

Account Closed

Real Estate Agent · Scottsdale, AZ · Member since 2017 · 7 posts · 9 votes

5y

As an investor and agent here in Phoenix/Scottsdale, this is my take... Market value of a residential property is what someone is willing to pay, and they are priced based on comps -not financial metrics a potential buyer desires. Assuming good intentions, they could be saying it's a good deal because the price per square foot is lower than other similar properties. Prices are indeed super high and finding deals with good cash on cash returns & cap rates is difficult, but certainly not impossible. When I looked into buying a SFR in Phoenix/Scottsdale to rent to longterm tenants the returns were absolutely terrible, I pivoted and bought a short term rental instead because the numbers were way better. If you're married to wanting cash flow & having longterm renters look in suburbs where home values are lower. Also Arcadia is one of the most desirable neighborhoods in Phoenix, who are these agents?! Lol. Feel free to reach out directly if you want to continue the convo. Best of luck

4 Reply

Nick Robinson

Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes

5y

@Ryan Stumbo
Answering a couple of your posts. Realtors using CAP rates on small MF is not a good metric to use. I would go more off of CoCr and total CF. Who cares if you get 1000% CoCr if the total CF is only $1.

I agree with @Account Closed the Arcadia district is a very desirable area. The chances of finding a long term CF property there is slim. Especially if it is 4 units and under. I agree if you want to be in that market or Scottsdale everyone seems to be buying them as STR and making pretty good returns. To echo everyone else's statements you may need to be more clear on your criteria and not just say I want an 8% CoCr. Just saying you want investment properties they are going to show you whatever comes up. Now if you did give them a set of criteria (vintage, unit count, value-add etc.) and you told them your goal was CF and a long term hold then give them feedback on the properties they sent you. Things that you like about the property and things you don't. They are trying to figure out what you are looking for and giving feedback will help fine tune the search.

Some of it is on you as the investor knowing you want CF I would look at Mesa, Glendale. If the agent is not listening and still sending you the same type of listings then it maybe time to find a new agent.

2 Reply

Account Closed

Real Estate Agent · Scottsdale, AZ · Member since 2017 · 7 posts · 9 votes

5y

@Nick Robinson Mesa & Glendale were the exact suburbs I was thinking of too

1 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @Nick Robinson:

@Ryan Stumbo
Answering a couple of your posts. Realtors using CAP rates on small MF is not a good metric to use. I would go more off of CoCr and total CF. Who cares if you get 1000% CoCr if the total CF is only $1.

I agree with @Account Closed the Arcadia district is a very desirable area. The chances of finding a long term CF property there is slim. Especially if it is 4 units and under. I agree if you want to be in that market or Scottsdale everyone seems to be buying them as STR and making pretty good returns. To echo everyone else's statements you may need to be more clear on your criteria and not just say I want an 8% CoCr. Just saying you want investment properties they are going to show you whatever comes up. Now if you did give them a set of criteria (vintage, unit count, value-add etc.) and you told them your goal was CF and a long term hold then give them feedback on the properties they sent you. Things that you like about the property and things you don't. They are trying to figure out what you are looking for and giving feedback will help fine tune the search.

Some of it is on you as the investor knowing you want CF I would look at Mesa, Glendale. If the agent is not listening and still sending you the same type of listings then it maybe time to find a new agent.

Let me try to respond to all your points. As far as my goals, I don't really have any picky standards outside of needing my money to have a higher return rate/similar return rate than what my stocks/crypto are doing. For example, if I can invest 80k in crypto and get 20k within a year (25% return), why would I go take 80k and throw down on an investment property that gets me 1% a year. So CoC return to me is very important. I know you say it's not specific enough, but I mean the overall goal with my investments is to make money. Obviously you have to know the pockets near Phoenix that are considered good areas to know how much your average rents are (which RentRange and Bigger Pockets both have helped me find good rent numbers).

So as far as my needs/desires in a property

1) CoC Return 5% or greater

2) Location not poor since I want to do long term rentals and also rent to travel nurses (since I am one). No travel nurse wants to rent in a dangerous area where their cars will get broken into. I know the travel nursing industry pretty well so I know what travel nurses are willing to pay on airbnb, what's considered a good price, etc. So Location needs to be average-good.

3) I can do a fixer upper, again, if the estimates I receive to do the contracting work still give me a good CoC return, then I'm cool with a fixer upper.

4) I'm more of a long term holder. Even if I use it for STR and do airbnb, I still am not the type to want to take a property, fix it up, then sell it back quickly. I am looking for financial freedom and steady monthly CF. So this rules out any flipping in my eyes. I am not interested in flipping.

I am a new investor also as I have 3 rental properties total, so bear with me if I'm misunderstanding some of the acronyms and phrasing. But I think here I have given enough details for a realtor to point out some good deals for me havent I?

0 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Also, I know I stated 8% earlier, but with this market I would do 5% simply because of the growth I expect overtime. But I also like the idea of what one person said on this post which was they don't do a deal unless their CF is going to be $500 a month or more. That's a pretty good standard to go by also.

0 Reply

Nick Robinson

Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes

5y

@Ryan Stumbo
Criteria that you may want to think about. Just ideas:

1. are you looking for a MF or a SFR?

2. Does age matter?

3. single story or two story?

4. CoCr of 5% or greater; is good it gives them a general idea but it depends on the metrics that the agent is using. I have seen some use 0% vacancy and make the expenses basically non existent except for taxes and insurance. Like you wrote earlier that you use certain percentages for each category that's fine but they may not be the same expenses the agent is using

5. Location- Your main goal seems to be to use the property as a STR and hold it long term. You also want the majority of your business to come from traveling nurses. So your location should be close to the hospital in a decent area. FYI if your going to use it as a short term rental you should not be using the market rate for a long term rental. If the property rents for $1,300/mo a short term rental should be higher than that. I totally agree with you though that you should run the numbers as a long term rental so you have an idea of what those numbers look like.

6. If you can always do a fixer upper. I know it takes more effort but you will see a faster return on your money, if done right and bought right.

7. I agree kick out flipping but that doesn't mean you can't use the brrrr strategy on a SFR or a MF. Want to try and always find a way to add value to the property.

1 Reply

David A.

Rental Property Investor · Los Angeles · Member since 2019 · 157 posts · 175 votes

5y

It sounds like you and the two agents you spoke to are wasting each other's time. Time to move on, either find a new agent or a new market. You should be able to look at prices and see if there's a chance the market will work for your personal goals. It sounds like you don't value appreciation or have any plans for a value-add which is fine, but as you can see you are fighting an uphill battle in the market you chose. Ignore what private equity is doing, they have more / better resources than you do.

I saw you used a FHA loan in one of your examples, does that mean you planning on living in one of the units because this will also change your numbers.

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

5y

Originally posted by @Ryan Stumbo:

@Account Closed are we allowed to post specific properties on bigger pockets and analyze the deals publicly? Lol If not no biggie, but this property in specific, I walked the entire property, looked in the units. Cute little units. Not the best area in Phoenix (Arcadia or something like that) but not the worst either. Realtor who listed it tried to tell me 775,000 for this triplex was a great deal.

Here are the numbers in the listing per the seller:

Insurance: $1552 yearly / 12 months = $129.33 monthly
Taxes: $1351 yearly / 12 months = $112.58 monthly
Landscaping: $713 yearly / 12 months = $59.42 monthly
Maintenance: 5% of rents
Property Management: 5% but from what I've learned most property managers get 6-10% so 5 is actually generous.
Water/Sewage/Trash: $2362 yearly / 12 months = $196.83 monthly
Adjusted Gross Income: $43,789.69 / 12 months = $3649.14 monthly rent (three 2 BR units so about $1215 per unit it sounds like are the rents monthly currently)
Vacancy: 3%

FHA Loan at 3.25% Interest
.85% PMI rate
5500 Closing Costs Approximately
$27,125 @ 3.5% down payment on $775,000 property.

your going to live in one of the units ? you cant get the financing your running your numbers at if you dont live there.

also just put more money down until you get to the return number you want .

nothing says rentals MUST be bought with max leverage.. max leverage is dangerous sometimes.

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Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @David A.:

It sounds like you and the two agents you spoke to are wasting each other's time. Time to move on, either find a new agent or a new market. You should be able to look at prices and see if there's a chance the market will work for your personal goals. It sounds like you don't value appreciation or have any plans for a value-add which is fine, but as you can see you are fighting an uphill battle in the market you chose. Ignore what private equity is doing, they have more / better resources than you do.

I saw you used a FHA loan in one of your examples, does that mean you planning on living in one of the units because this will also change your numbers.

1) I did the calculations with what my return would be after my required 1 year of living in the rental.

2) interesting conclusions you reached with saying I'm not willing to do a value add. I would like to know where I wrote that. I simply brought up MTF property that I liked and thought the area was ok and how the price was outrageous and the realtor told me it was a great price. Even with value add, that's irrelevant to what I said about it being a -50% return though. If you're getting a -50% return it's a terrible deal, and my question was asking if there's something I'm missing in this market on real estate with these realtors both saying "you don't understand that market" when I tell them I like a property but not willing to pay the list price. Now had they said "well that's overpriced but they aren't going to come down to the price you need to make it a good CoCr" then I would just move on. But it seems 2 realtors in a row tried to steer me into bad deals or making an offer that burns me. Maybe let's address the moral compass of some of these so-called realtors out here before we go wondering about other things. (not saying all realtors operate this way, but this is about the 5th shady occurrence)

3) the price doesn't matter. I have plenty of money to throw down on some properties, but I'm not going to blow it just so I can say I'm a fancy pants, big-time investor in Phoenix..lol I prefer to make money, not look cool to a group of people at a dinner table.

4) these specific properties were on the market for over 100 days and list price hadn't changed at all. So that was also part of my confusion as to if I'm missing something with my numbers/market. Clearly others saw it was overpriced or something about the deal was off or it would've already been bought. I am perfectly content doing value adds/fixer uppers/single family over multi-family at this point due to the outrageous prices on multi-family.

0 Reply

Ryan Stumbo

OP

Rental Property Investor · Member since 2021 · 63 posts · 27 votes

5y

Originally posted by @Nick Robinson:

@Ryan Stumbo
Criteria that you may want to think about. Just ideas:

1. are you looking for a MF or a SFR?

2. Does age matter?

3. single story or two story?

4. CoCr of 5% or greater; is good it gives them a general idea but it depends on the metrics that the agent is using. I have seen some use 0% vacancy and make the expenses basically non existent except for taxes and insurance. Like you wrote earlier that you use certain percentages for each category that's fine but they may not be the same expenses the agent is using

5. Location- Your main goal seems to be to use the property as a STR and hold it long term. You also want the majority of your business to come from traveling nurses. So your location should be close to the hospital in a decent area. FYI if your going to use it as a short term rental you should not be using the market rate for a long term rental. If the property rents for $1,300/mo a short term rental should be higher than that. I totally agree with you though that you should run the numbers as a long term rental so you have an idea of what those numbers look like.

6. If you can always do a fixer upper. I know it takes more effort but you will see a faster return on your money, if done right and bought right.

7. I agree kick out flipping but that doesn't mean you can't use the brrrr strategy on a SFR or a MF. Want to try and always find a way to add value to the property.

1) I am open to both. Initially I preferred multifamily because more cash flow and quicker, but judging by the overpriced multifamily properties in this market, maybe single family is best for me.

2) on my other rentals I had a trusted inspector/contractor walk the properties with me. My goal here was to hopefully get in contact with another and a good contractor can usually see subtle signs of a poor foundation, poor plumbing, electrical, etc. So age doesn't matter to me as long as contractor sees no major red flags, but obviously everything is sort of a risk until you bust open walls.

3) Not a priority.

4) You are right on the metrics. I definitely will never go 0% vacancy. I have used 2% for when trying to calculate for good areas, and if it's newer or recent repairs obviously the maintenance and cap-ex I will decrease the percent also. So I'm willing to lower or raise numbers depending on certain qualities of the property, but I don't think I'll ever use 0% on any of them, because that's going into a property preparing for only the best case scenarios, when in my opinion you should always prepare for the worst case.

5) agree with you on the fact you should run your numbers based off long term rentals, just because you never know when travel nursing may slow down or short term stays might slow down. I prefer to do the numbers based off worst case scenario which is I have to rent it out to someone long term and the short term rentals take a dip.

6) agree totally. I am totally open to fixer uppers and am inclined to agree with you there is more value here. It's just hard to find fixer upper multi family properties so it looks like I'll have to do single family for a little while in this market.

7) I am open to BRRRR. I have actually already used this on one rental. Your questions will help me focus in even more on what I'm looking for. Thanks a ton!

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Is Cash on Cash Return Irrelevant in Arizona?

Is Cash on Cash Return Irrelevant in Arizona?

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