Phoenix Rental Investment

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Phoenix Rental Investment

Dhea Suseno
CA · Member since 2021 · 3 posts · 3 votes

Hello there! I am a newbie in real estate investing who have been reading BP forums, and this is the first time asking a question myself. I live in Cali, and after getting inspired by Long Distance Real Estate Investing book by David Greene, I finally decided to start looking into investing out-of-state. 

Phoenix seems to be growing tremendously in terms of jobs and people living HCOL area moving there. Looking to hear about your rental investment experience in Phoenix, like what's a reasonable cash on cash to expect in that area, which zipcodes should be avoided, any other thing you'd like to share? 

Thank you in advance, happy to finally join the BP community!

Dhea

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Paul Welden
Real Estate Agent · Tempe, AZ · Member since 2011 · 1k+ posts · 543 votes
5y

Hi @Dhea Suseno and welcome to BP!

If you intend to get a mortgage for your real estate investment(s), please be aware of the new FHFA rule that came out last week where Fannie/Freddie will, starting 4/1/2021, will reduce their purchase of investment loans and 2nd home loans by 50% to only 7% of their portfolio. 

I think this is HUGE! 

Some lenders like Prime and Academy have already adjusted these loans by 200bps!

So, it could be much more expensive and more difficult to get a non-owner occupant or 2nd home loan after 4/1/2021. 

In Phoenix, I don't think any area should be avoided but the area to buy in depends on your investment strategy and the type of renter you want to attract.  Every area and zip code has its pros/cons. 

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  • Paul Welden
    Real Estate Agent · Tempe, AZ · Member since 2011 · 1k+ posts · 543 votes
    5y

    Hi @Dhea Suseno and welcome to BP!

    If you intend to get a mortgage for your real estate investment(s), please be aware of the new FHFA rule that came out last week where Fannie/Freddie will, starting 4/1/2021, will reduce their purchase of investment loans and 2nd home loans by 50% to only 7% of their portfolio. 

    I think this is HUGE! 

    Some lenders like Prime and Academy have already adjusted these loans by 200bps!

    So, it could be much more expensive and more difficult to get a non-owner occupant or 2nd home loan after 4/1/2021. 

    In Phoenix, I don't think any area should be avoided but the area to buy in depends on your investment strategy and the type of renter you want to attract.  Every area and zip code has its pros/cons. 

    2Reply
  • Dhea Suseno
    OP
    CA · Member since 2021 · 3 posts · 3 votes
    5y

    Hi @paul welden, thank you!

    Thanks for sharing that, I will definitely look into the new FHFA rule, and useful to have the 4/1 date  in mind.

    Good to know that there aren't any dangerous zipcodes should be avoided. I will make a criteria for the property and renter type to narrow down my search.

    0Reply
  • Tim Fazio
    Lender · Tucson, AZ · Member since 2020 · 20 posts · 5 votes
    5y

    Hi @Dhea Suseno.  AZ is a very hot market with all zip codes being very active.  Paul said it well that it all depends on if you intend to rent these properties out and what type of tenants and price point you are looking for.  We finance properties all over the country but I am a native Arizonan and based out of Tucson and I don't necessarily avoid any zip codes for my personal portfolio.  Every investor has different strategies for how they invest and what they are looking to do with each property.   I would be happy to look at any of your deals that you may intend to purchase.  Happy to discuss anytime. 

    0Reply
  • Dhea Suseno
    OP
    CA · Member since 2021 · 3 posts · 3 votes
    5y

    Hi @Tim Fazio, thanks you for your insights! That is great to hear that all over AZ are good and active. And yes I do intend to rent the properties out, mainly looking at SFH since I don't have a lot of experience now, and want to get to multifamily eventually. Will send you PM to connect, thanks a lot!

    0Reply
  • Hannah Warde
    Real Estate Agent · Scottsdale, AZ · Member since 2021 · 1 post · 0 votes
    5y

    Hi @Dhea Suseno! I'm a real estate professional living in Scottsdale looking also looking to purchase an investment property (buy and hold). All zip codes are hot but not all are going to have good deals. In some areas, like Scottsdale, the market rent isn't keeping up with the average purchase price to maintain a decent ROI. In my opinion, you're unlikely to find any good deals in the NE valley (unless you're boots on the ground and door knocking). I'd start running the numbers using BP's rental calculator in zip codes 85338, 85323, 85353, 84043, as well as the NW valley in peoria, and in the SE-- Queen Creek, San Tan Valley, Florence, Coolidge, etc. These all have easy access to freeways to bring commuters into Phx.

    0Reply
  • Daniella Lamis
    Realtor · Gilbert, AZ · Member since 2021 · 42 posts · 18 votes
    5y

    Hi Dhea! I am finding success in purchasing new builds in the outlying areas of Phx. One new build purchased in Feb 2021 has already seen a $45k increase in the base price, and its not even completed yet. Many new build communities in Arizona (most!) have waiting lists and lotteries but these outlying communities still have first come/first serve availability. 

    1Reply
  • Arthur Yu
    Rental Property Investor · Tempe, AZ · Member since 2017 · 10 posts · 4 votes
    5y

    @Dhea Suseno

    Hi there. Im a californian myself and moved to az last year, i have 3 sfh’s and closing another one. I focus on east valley, my properties are in tempe and gilbert, in tempe i focus on the rental market. Scottsdale is good for airbnb. mesa is cheaper but less desirable.

    Id be happy to walk you thru my investing exp here in phoenix

    1Reply
  • David Avery
    Flipper/Rehabber · Phoenix Arizona · Member since 2020 · 1k+ posts · 686 votes
    5y

    I'm here knocking out Flips, re habs and anything BP members need.

    Reach out when your ready!

    Thanks

    Dave

    davidaveryconstruction.com

    0Reply
  • Nick Robinson
    Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 343 votes
    5y

    @Dhea Suseno

    If your looking to buy an investment I would suggest you look into MF and stay out of SFR. The CF on a MF is going to be better and it will be easier to scale your portfolio. Of course a lot of this depends on how much capital your bringing to the deal. When you do decide to buy anything run your numbers conservatively and make sure their is positive CF. The reason I personally stay out of SFR is if I am only making $100-$200/mo pretty much any expense is going to put me in the red. I also find it is easier to get loans and renovate MF deals than SFR. GOOD LUCK!

    1Reply
  • Marv Sauer
    Member since 2020 · 2 posts · 5 votes
    5y

    Hi Dhea,

    I own a rental property in Gilbert, and it's a great area. You might consider Gilbert, Chandler, and Tempe. 

    You are smart to invest in Phoenix real estate. Property taxes are low (.68%) there are good paying jobs, year-round good weather, tourism, landlord-friendly laws, Sporting Events, entertainment, and good schools. If you're going to buy, do it too, as prices are going up. It's a sellers market right now. I have a property manager that charges a flat rate (not a percentage) and I would recommend them. They will market the home, screen the tenant, sign them to a lease, and collect the rent, and direct deposit to your account. All the best to you! 

    1Reply
    • Aileen Walton
      Investor · San Francisco, CA · Member since 2026 · 5 posts · 2 votes
      1w

      Can you share property manager info please? Like the flat rate.

      0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y
    Originally posted by @Dhea Suseno:

    Hello there! I am a newbie in real estate investing who have been reading BP forums, and this is the first time asking a question myself. I live in Cali, and after getting inspired by Long Distance Real Estate Investing book by David Greene, I finally decided to start looking into investing out-of-state. 

    Phoenix seems to be growing tremendously in terms of jobs and people living HCOL area moving there. Looking to hear about your rental investment experience in Phoenix, like what's a reasonable cash on cash to expect in that area, which zipcodes should be avoided, any other thing you'd like to share? 

    Thank you in advance, happy to finally join the BP community!

    Dhea

    Dhea, awesome that you joined!

    0Reply
  • Auryana Faramarzi
    Member since 2021 · 29 posts · 34 votes
    5y

    @Dhea Suseno Hey Dhea! I'm in the same situation, I live in SoCal and am hoping to purchase a SFR in PHX (chandler, gilbert, ahtuwakee). Just wanted to share my experience so far: I have noticed that homes in my price range ($350K) have been going for 40-60K more than asking. Not only that, homes will receive dozens of offers in a couple days. If you're buying all cash, then you have a great leveraging power. I'm using a conventional loan and even when I put offers above asking, they are not as attractive to a cash buyer. I've been looking for about a month and a half, have put 4 offers, and nada. This is not to discourage you though. I may have completely different price range and location target. But I wanted you to know the situation in PHX so that you can decide if its somewhere to dedicate your time. I have now began to adjust my search to look at Ohio, Tennessee, and Texas.

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Auryana Faramarzi:

    @Dhea Suseno Hey Dhea! I'm in the same situation, I live in SoCal and am hoping to purchase a SFR in PHX (chandler, gilbert, ahtuwakee). Just wanted to share my experience so far: I have noticed that homes in my price range ($350K) have been going for 40-60K more than asking. Not only that, homes will receive dozens of offers in a couple days. If you're buying all cash, then you have a great leveraging power. I'm using a conventional loan and even when I put offers above asking, they are not as attractive to a cash buyer. I've been looking for about a month and a half, have put 4 offers, and nada. This is not to discourage you though. I may have completely different price range and location target. But I wanted you to know the situation in PHX so that you can decide if its somewhere to dedicate your time. I have now began to adjust my search to look at Ohio, Tennessee, and Texas.

     Ohio has a lot of opportunities! I have a property in Columbus, Ohio but I am also looking to move into the Cincinnati and Cleveland markets.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Jay Yoo
    Investor · Seattle, WA · Member since 2019 · 139 posts · 54 votes
    5y

    I'm happy to chat with you about my recent experience in out of state investing! Please DM me!

    0Reply
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