All Forum Posts by: Stone Jin

@Tyler D.

As many others have mentioned climate change. We are hedging the long term by buying near large bodies of water in the Midwest. I think water will be vital in the future as our population grows.

Take a look at Johannesburg a few years back. A very modernized country has a massive water crisis.

Current trend for boomers is to retire south in Florida or Arizona. However in 30 years boomers will be gone and who knows what the generations then will fancy.

@Elijah Householder

The housing market is hot everywhere and people are buying. There is no indication that the market will be slowing down while interest rates are low and more dollars are being printed. By holding off a year or two, the prices may be even higher and you would lose 1-2 years of debt pay down and cash flow.

Since you work in the mortgage industry, you know that the loans being given out now is not like what was being lent out in 2006. The forbearance is an unknown but I suspects the banks will not foreclose rapidly as they saw how much the prices in 2008 dropped due to them doing so.

Have a plan and execute. Real estate investing is not a sprint and it’s also very forgiving the longer you hold it.

@Antoinette De la Espriella we self manage in AZ. We did the STR business for 6 years, I'm not sure that's something that can be remotely self managed. You live and die by tenant reviews, so if on a Friday night the blender breaks, how will you address that?

There is such a demand for long term rentals right now that I'm sure you can make okay cashflow if you are able to find a desirable property.  

@Antoinette De la Espriella

Unfortunately I'm not sure what's available at the 150K price point.  I'm guessing there are some condos available that are in rougher complexes.   There are plenty of realtors on this site that can help you with that.

How are you planning on managing the airbnb? I'm assuming you are not local to AZ based on your profile? Unless you want to use the property part time for yourself, the management fees on Airbnb usually makes it comparable to long term rentals. I've seen 20-25% management fees on STR vs the 10% on LTR.

@Michael LemMon

Most of our Mesa property is in east Mesa which has a large number of early 2000 build tract homes. We also own in west and the north parts town.

Mesa is very diverse and has housing ranging from c to a+. You can check housing around Mesa community college where you get a blend of tenants. It’s minutes from all the nightlife of Tempe and Scottsdale. Mesa is significantly cheaper than Scottsdale and Tempe so for a budget of 500k. You might be able to get multiple units to mitigate the risk of vacancy.

@Will Fraser LOL, I should charge guru money for my secrets.  

Rental history - in addition to calling previous landlord, we ask that they provide proof of payment

Income - we prefer 3x rent NET income but will accept Gross base on price point.  We understand that everyone needs X of amount of money to live (food, insurance, gas, utilities) etc, so depending on the price point 3x gross is not enough.  Most of our properties have a higher rent so 3x Gross is usually sufficient.

Credit - the score doesn't really matter to us as medical and student debt are usually culprits for low credit.  We look at collections and them paying on consumer debt like credit and cars.  We also ask for last bank statement to see how much reserves they have

Background - standard whatever the law permits.

Hope this provides some insight.

@Michael LemMon

We have most of our properties in Mesa and depending on the area there are multi million dollar homes there too. Mesa is a huge city with almost a million people and many different sectors.

Sounds like you want to be in the parts of town that more fits your demographic. You can also check out downtown Phoenix as it is also on fire. New condos etc going up all over the place. You can look at getting a newer duplex and upping your budget as the rents will offset your monthly cost quite a bit.

@Prachi Metha

We self manage in Az and in Ohio. They key is having good systems in place. The thing to remind yourself is if you owned a place locally and a tenant calls and says ac is broken, do you go yourself or have a Hvac company go? We outsource all service calls.

The biggest challenge I’ve found managing out of state is actually showing the home. You can take a video and send to perspective tenants and if they really want to view in person you can use a service like rently to manage remote showings.

Lastly screen hard and make sure you have a very good tenant (good job, good rental history, clean background, proof of paying debts).

If you do those things you can absolutely self manage from afar. We have tenants that we have never met both locally and out of state. If you buy a good property and get a good tenant you can do it too. On the flip side, if you don’t take care of your property or don’t screen well for a tenant l, even with a property manager you will still have a bad experience.

@Jesus R.

As they say, it's not timing the market but time in the market.  Let's say you buy now and collect rent for 1 year, how much equity have you gained after 1 year, how much debt have you paid down.   I don't see the 2008-2009 prices in Phoenix any time soon.  Banks know how to deal with large amount delinquencies.   We are still buying through this as long as the deal makes sense.  We bought a triplex in Mesa last year but are also buying in other states.  The market feels very different than 2006-2007 and with all the people/jobs moving here I highly doubt Phoenix will be negatively affected.

@Thomas Corley

A few years ago the azreia had a speaker from the Phoenix economic council come speak and someone posed the question. Because of modern water management and reduction of agricultural use Phoenix uses the same amount of water today as it did in the 1950s when the population was 1/10 of what it is today.

I’d be more concerned about the heat. Every year we reach a new record for number of days over 100 degrees. At what point do people stop waiting to live in the heat?