All Forum Posts by: Kyle Gardner

It all depends on if you want cash flow or stability/appreciation. Or what combination of both? The new builds in the outskirt towns are fine and if you buy with a primary loan, you can get a great interest rate. But I don't see them appreciating in value as much as fully developed cities in the metro. Buckeye, San Tan, Florence, Casa Grande: they all have an abundance of land for any builder to construct a new house, so the land holds very little value, thus lowering the chance of appreciation. 

I really like East Mesa and Apache Junction. There are pockets of rundown areas but it's close to the freeway and much closer to the Phoenix metro than the outskirt towns. It'll take a few years but I think this area is going to show steep appreciation over the next 5 years and you can get a decent place that'll cash flow a little right now, more if rates drop and you refi and best of all, high appreciation over the next 5-10 years. 

I build ground up and flip a handful of properties each year which I list myself in AZ. If someone comes to me without a buyers agent to purchase my property, I'm going to get everything out of them that I can. I feel no need to get them a good deal as they seek self representation. 

But representing my buyers, I treat them and their money as sacred. I protect them as much as I possibly can. And for my clients sake, I take advantage of sellers that hire a bad agent, sometimes to the extent of 10% of the price or more.

And for my sellers that I represent, if a buyer comes to me without an agent, I'm going to work over the buyer as much as I can. In my experience, the people that try to buy without a realtor are usually a major pain to deal with and feel entitled to complain at any point during the transaction. Said buyer is never going to give me a referral or a thank you, so I'm going to get $10,000 or more out of them so that my seller loves me and sends their friends my way. 

I can't understand it either, I buy in other parts of the country and use an agent to buy and sell as well. I refer my family in other areas to good quality agents. I negotiate a lower fee but why wouldn't I want someone who knows the area to help??? 

Long story short, we will see more people not using buyers agents and they may work out once in a while but in the grand scheme, they'll get what they pay for. But I'd rather pay 2.5% of my own money to a buyers agent rather than deal with an entitled buyer on my own property. 

More disclosure is a good thing, less agents is a good thing but overall, everybody needs someone in their corner.

The same people who try FSBO and screw buyers agents will do the same thing now, bad agents will likely get weeded out, and average decent people will appreciate having someone help them. And good agents will follow the correct path to make sure that they're providing proper value to their clients and get paid in a way that doesn't adversely affect their clients.

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Sale price: $525,000

I bought this land, built a duplex on it and sold it.

What made you interested in investing in this type of deal?

To learn and make money

How did you finance this deal?

Private money

That's what I was thinking. Even if demand isn't outrageous, supply is so low... I've read the reports that talk about the permits pulled recently and overbuilding of multifamily, but I can't find whether those are big complexes or smaller. 4 units and less would qualify for residential financing, but is there a reason that I can't find anyone else building these? (Within reason, obviously there are some other builders but very few from what I can see)

I am a GC in phoenix building simple duplexes and 4 unit complexes. 200/ft is way too much for a simple duplex. I couldn't build you something for $105/sqft but $200 plus site prep is excessive. 

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. 

I have some land in the Phoenix metro and am considering building 4 units to sell. There are very few comps. Is anyone seeing demand for 4 brand new units that would qualify for residential financing? Or better to just build 6-8 for a bigger investor?

Congrats Jack! My wife and I bought a duplex when we got married and it greatly increased our net worth doing the first few years. I'm a realtor and general contractor in Phoenix and am building duplexes and other house hacking projects with that in mind. 

Lots of good info here on this thread. One trick I like is to find a large house in a non HOA community. Preferably over 2000sqft and with 2 bathrooms. Check the floorplan to make sure you can divide part of the house and add a kitchen on one half. The best projects have 2 living areas so that the only thing you have to do is wall up a hallway and add a kitchen. And viola, you have a private house with a rentable guest house.

Obviously easier said than done, but I find these types of projects quite regularly.