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House Hacking

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Michael Adamo
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Seeking Insights: Phoenix House Hacking Market

Michael Adamo
Posted Jan 22 2024, 09:09

Hello BiggerPockets community,

I'm exploring opportunities in the greater Phoenix real estate market, specifically in house hacking. Considering an inherited property in Los Angeles that could be rented for $6,000-7,000 monthly, and with monthly trips to Phoenix amid a child custody battle, I'm interested in understanding the current state of the Phoenix house hacking market.

If you have insights, experiences, or trends to share regarding house hacking in Phoenix, I would greatly appreciate your input. Are there specific neighborhoods, market conditions, or opportunities that make house hacking viable in the Phoenix area?

Your expertise will be invaluable as I navigate this decision. Thank you for sharing your insights!

Mike

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Nathan Harden
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  • Real Estate Agent
  • Puyallup, WA
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Nathan Harden
Pro Member
  • Real Estate Agent
  • Puyallup, WA
Replied Jan 22 2024, 10:24

The only real "trend" is just house hacking in general. You see a MF property, you want to buy it and have the other tenant pay the majority of your mortgage. There is no special "trend" happening in one specific place.

Arizona is a hot market. House Hacking has become very popular everywhere. Not just AZ. Find a duplex or MF property, buy it then rent out a unit.

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Randa Dehaan
  • Lender
  • San Diego, CA
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Randa Dehaan
  • Lender
  • San Diego, CA
Replied Jan 22 2024, 12:56

Hey Michael!

Phoenix is a great market to invest in. Arizona in general really -- a lot of people leaving CA to go there as well as multiple college towns. That's where I'd recommend looking into as far as house hacking as there are more transplants in those areas. Think U of A, GCU, ASU, etc. Connecting with a lender that can run numbers for projected mortgage payment vs  market rents in relation to the area you're looking into would be a good first step! 

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Sean Bozigian
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  • Realtor
  • Scottsdale, AZ
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Sean Bozigian
Pro Member
  • Realtor
  • Scottsdale, AZ
Replied Jan 22 2024, 13:03

Hey Mike, 

There are plenty of options for house hacking in the Phoenix area, from small multi-family, to homes with ADUs, to rent by the room setups. It ultimately comes down to your budget and desired level of privacy in your living situation. Happy to chat more!

Sean

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Michael Adamo
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Michael Adamo
Replied Jan 22 2024, 16:47

Thank you for your replies and thoughts

@Randa Dehaan I have spoken to a lender to get things in order, but haven't chosen one that I'm moving forward with yet. I like your strategy of being near the colleges I was thinking of something similar. Everything seems so expensive 1million + around Tempe which is near ASU ..to be honest  im not trying to go that deep. I'm trying to be under $500k I'm not sure if today's market will allow me to obtain that. Pre-pandemic maybe ? But I think prices have risen so high in the Phoenix area that it's kind of scary to jump in. Atleast for me it is. 

@Sean Bozigian I would probably want as much privacy as possible but also looking for space. I'm comfortable living in one of the units but not an adu. 

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Randa Dehaan
  • Lender
  • San Diego, CA
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Randa Dehaan
  • Lender
  • San Diego, CA
Replied Jan 22 2024, 16:56
Quote from @Michael Adamo:

Thank you for your replies and thoughts

@Randa Dehaan I have spoken to a lender to get things in order, but haven't chosen one that I'm moving forward with yet. I like your strategy of being near the colleges I was thinking of something similar. Everything seems so expensive 1million + around Tempe which is near ASU ..to be honest  im not trying to go that deep. I'm trying to be under $500k I'm not sure if today's market will allow me to obtain that. Pre-pandemic maybe ? But I think prices have risen so high in the Phoenix area that it's kind of scary to jump in. Atleast for me it is. 

@Sean Bozigian I would probably want as much privacy as possible but also looking for space. I'm comfortable living in one of the units but not an adu. 


 I sent you a private message! I just reached out to a realtor I know that works in the Phoenix, AZ market to see what she knows about multi unit properties in that area that are under $500k. 

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Noah Corwick
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  • Realtor
  • Phoenix, AZ
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Noah Corwick
Pro Member
  • Realtor
  • Phoenix, AZ
Replied Jan 23 2024, 09:19

Hey Michael!

House hacking under $500k is definitely possible, but just depends on your long term goal. House hacking a multi family for that amount will be tough, but it's totally possible with a SFH or townhouse.

There are some awesome strategic areas that will cash flow with a house hack + are nice appreciation plays. I'll shoot you a DM. 

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Wale Lawal#3 New Member Introductions Contributor
  • Real Estate Broker
  • Houston | Dallas | Austin, TX
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Wale Lawal#3 New Member Introductions Contributor
  • Real Estate Broker
  • Houston | Dallas | Austin, TX
Replied Jan 23 2024, 11:23

@Michael Adamo

Phoenix's real estate market is dynamic, and under the appropriate circumstances, house hacking might prove to be an effective strategy. The following are some tips and things to think about when house hacking in the Phoenix area:

1. Robust Rental Market: Due to Phoenix's rapid population expansion, there is a high demand for rental units. This can make things more conducive to house hacking, particularly if you're thinking about renting out some space on a home.
2. Affordability in Specific Areas: In comparison to other large cities, several neighbourhoods in Phoenix provide reasonably priced homes. Think about locations where rental revenue possibilities and property prices match.
3. Central and emerging Neighbourhoods: House hacking prospects are frequently found in central and emerging neighbourhoods. Nearby job hubs, facilities, and public transit can draw in both tenants and prospective homeowners.
4. School Districts: When looking for long-term rentals, having a property close to a top school district will help draw in families as tenants.
5. Local Real Estate Networking: Attend networking events in the Phoenix region and make connections with other real estate investors. Local investors can offer insightful information about particular neighbourhoods, industry trends, and potential opportunities.

It's necessary to carry out in-depth market research, consult with local real estate experts, and get guidance from experienced Phoenix investors before making decisions. Understanding the local quirks is essential for effective house hacking because every neighbourhood have its own distinct features.

Good luck!

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Dave Skow
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  • Seattle, WA
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Dave Skow
  • Lender
  • Seattle, WA
Replied Jan 23 2024, 15:54

@Michael Adamo- thanks - if you decide to purchase a AZ  property - make sure to get pre approved for a loan  ( if needed)  well before you begin looking for properties 

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Kyle Gardner
  • Real Estate Agent
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Kyle Gardner
  • Real Estate Agent
Replied Mar 2 2024, 11:13

Im a little late to this post but I hold a real estate license in AZ and own a construction company. We focus on building multifamily and taking on house hacking projects.

Phoenix has a water shortage so recently changed some laws to make guest houses or additional units more acceptable.

The bottom line is, once you decide what area and what type of main house you want, go search for a good deal and then add a little value for higher rents. I had clients buy a 2 unit property in Mesa and closed yesterday. They bought it for about 425k and it appraised at 499k. There are good deals out there, its just a matter of being in the trenches to find the deals. 

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David Avery
  • Flipper/Rehabber
  • Phoenix Arizona
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David Avery
  • Flipper/Rehabber
  • Phoenix Arizona
Replied Mar 15 2024, 13:18

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