All Forum Posts by: Pamela Sandberg

Phoenix typically runs a little below the 1% rule (more like .6 or .7%). However: we do have really consistent, reliable appreciation, so that almost always offsets the reduced cash flow. It's important to remember that 1% is a very rough rule of thumb that applies very differently in different parts of the country. 

Yes, casitas are a great way to house hack, and I know plenty of people who are making a killing by AirBnBing their ADUs. It gives you a lot of investment options (STR, LTR, added value on sale, etc.) I'm happy to answer any specific questions or help you find properties in Tempe with ADUs!

Hi Bryan, the Phoenix market is a great place to invest. We've had consistent, sustainable growth ever since 2008. That's been supported by a lot of job growth, which gives our market a good foundation. All in all - a good, reliable market for investors!

As far as areas: there has been a lot of development in downtown Phoenix. Lots of high rises are going up, and there have been some gorgeous remodels on homes in the surrounding historic districts. (The spreads on those can be ridiculous, BTW.) In the meantime there are a lot of big tech employers coming to the East Valley, so a lot of workers will be moving to the Chandler/Mesa/Gilbert areas. Hot areas with higher entry barriers, but a lot of opportunity for growth in the coming years. 

Be careful with MFs here in the Phoenix area. Most of them tend to be in rough parts of town that you wouldn't necessarily want to live in. Happy to answer any specific questions about a particular unit or area. 

Yes, the zoning issue was my first thought. Changing the use from commercial to residential (and not just residential, but MF as opposed to SF) will be significant. Whether the city will be open to it probably depends a lot on the municipality. (For example, you might find it easier to do in Glendale than Mesa, or whatever.)

If the zoning issue turns out to be prohibitive, I don't see why you couldn't find existing space in a residential zone to make this work. In downtown Phoenix there is already a lot of MF zoning, so you may be able to find your vacant land in an area that's already zoned for it. Co-living is certainly a hot new trend! Would love to see someone try it in Phoenix. 

Service of process must be accomplished in state, so "reaching out" to an out of state owner won't necessarily satisfy legal notice requirements. Any person over the age of 18 can perform this function. There are companies that will perform it for a fee, but if you're looking for the most cost-effective option, a friend or family member in state will be the way to go. 

Hi Daniel,

Hello and welcome! Yes, there is a high entry barrier to investing in LA. Many Californians are looking here in the Phoenix metro area (including Peoria, but there are many other good areas to consider here). Proximity is an important consideration when investing out-of-state, and Phoenix is a short drive from Southern California. 

Another important consideration is building a local team you trust. You'll want a Realtor who knows the area and has access to off-market deals, a dependable contractor, and a property manager who is both affordable and reliable. Other needs will arise, so it's important to have a team that can put you in touch with anyone you need.  

You're not alone in over-analyzing a deal to death - engineers and attorneys especially are known for this. I think at some point we all just decide to take the plunge and make ourselves do it! There are risks to owning any real estate (a personal residence, undeveloped land, rentals, whatever). Accept that these risks will arise and trust that you can handle them when they do!

As far as immigration: I'd recommend talking to a tax professional. Your LLC will need a taxpayer ID number, and a tax specialist can help you determine the best way of going about that. You might also want to speak with an immigration attorney about the type of visa you are on. Different visas allow different activities, and you'll want to be sure yours allows for investing - or get one that does.

Hope this helps! Happy to answer any questions I can about the Phoenix market.

I have to agree with everything above - all these iBuyers keep their margins RAZOR thin. They slap some paint on the flip and call it "rehabbed". BUT ... there are many different sellers, and they are staying in business, and they are changing the game. So I think we all need to be aware of them. But I would probably never advise a client to buy from Opendoor. 

Hi Danielle, and welcome!

You're definitely on the right track. SoCal is very tough to make work. A lot of Californians invest here in Arizona - the entry barrier is much lower, and it's just a quick drive away. The Phoenix market has also had really healthy, sustainable appreciation for several years now (with good indicators that will continue). I've worked with several out-of-state investors. Happy to answer any questions I can!

HI Shawn, and welcome!

Phoenix has been hot, and by all indications it will continue to be. One of the biggest indicators of SUSTAINABLE market growth is the employment rate. I keep reading articles about the thousands of jobs that continue to pour into the Valley. This is a really important sign that home values will continue to appreciate. All these new workers need someplace to live!

I work with many out-of-state investors. Happy to answer any specific questions about the Phoenix market!

Welcome! Happy to answer any questions I can about the Phoenix market!