All Forum Posts by: Patrick Allen

Hello from the Corona Virus void! Yes, not surprisingly the state of Arizona has yet to get a handle on the pandemic roasting its way across the Southwestern states, so we will be meeting up virtually in the month of August. Better we all stay inside & off the roads anyway!

August's meetup will be all about Buy & Hold Real Estate, and will involve a not-insignificant amount of math. We will be discussing several of the numbers every investor should know when evaluating investment property: cap rate, gross rent multiplier, cash flow... oh my! If you have ever wondered how to run numbers on a buy & hold deal opportunity, or were wondering about all the things you were doing wrong when deciding whether to move forward on a deal, this meeting is for you.

Pre-Register here: registration link through AZREIA

As we always do, we will be getting together on the first Monday of the month to talk real estate and learn from one another. The meeting officially runs from 6:00-8:00pm, but folks are encouraged to come earlier or stay later for networking and to share recent success stories.

Tucson AZREIA New Investor Subgroup's vision is to get new investors into action: saving capital, learning the market and doing deals. To support you along the way meetings will include presentations on topics relating to the new investor, highly collaborative breakout sessions where you solve problems as a team, games and activities to instruct or facilitate conversation about RE and money, and a platform to crowd-source input from your peers about deals you're doing or problems you encounter on your journey into REI.

Please do note these meetings are not instructional: we are not presenting a step-by-step model on how to invest in real estate and we will not actively direct you on the path we (whoever "we" are) deem the best path for you. This is a chance to learn, talk with and get to know other investors around town

This thread hasn't really gotten any eyeballs since I posted the numbers below, and the same data felt appropriate to place here.

Thanks to the work of @Dave Meyer and the BP Insights team, I was able to take rental market data sorted by zip code to create the following spreadsheet of Tucson's top zip codes:

You will see I sorted the data based on average inventory for a 5-week period in February/March 2020: the number of rental properties being advertised "for rent" as presented in the BP Insights data set. We can also see the "concentration" of rental properties per zip code (vs. all residences), which when combined with an "A, B, C, D Neighborhood" classification system (see this blog post for a simple explanation) can paint a pretty specific picture about what micro-markets might work for a given niche & strategy. In this case "R" stands for rural, as some of these zip codes include quite a lot of open desert-scape.

Generally speaking: anything in the city proper (River Rd -> Golf Links | Oracle -> Wilmot) is going to have a higher prevalence of rental properties than the periphery, although Sierra Vista is a respectable 8th place with nearly 100 of their own rental property options. 

A discussion on the fastest appreciating markets in town would be a very different one, but hopefully this gives a more empirical spin on the conversation.

The best market for you to invest in is where you have good people: find a deal-finder, a lender, a property manager and a general contractor in just about any US city & you will make millions over the next couple decades if your people are good at what they do.

Price points are generally lower in Tucson than in Phoenix, but Phoenix has the larger, more diverse economy and is further along in its growth trajectory. Phoenix is double the size and triple the population as Tucson (rough numbers), and they are basically the same proximally: only 100 miles between the two, and both cities are growing for overlapping reasons. Both are positioned to do very well over the short- and long-term, for whatever that means in our volatile market...

One more thought: analysis paralysis is the enemy, far more so than choosing the "wrong market." Pick one to focus on & start networking.

Closing costs are the sum of loan costs, Buyer's half of title/escrow fees & prepaids for taxes & insurance. They are typically around 3% of the purchase price (in my home state of Arizona) for properties under $350k or so, as a general rule of thumb.

Because portfolio loans are higher risk to the lending institutions it may well involve higher closing costs, and obviously the greater flexibility in financing options to do otherwise un-doable deals helps make up for this.

There is a new investor subgroup which meets on the first Monday of every month. It isn't showing up in searches in the Events page because it's online, so zip code searches aren't finding it.

Here is the BP Events link, which links back to the AZREIA website Andy pointed out. My group focuses on new investors who are looking to do their first deal, and there are several other subgroup options in Tucson (and more in Phoenix) you can check out as part of your yearly membership.

I thought for the fleetest of moments that July might have been an opportune time to re-start in-person meetups of the New Investor Subgroup of AZREIA, but the Mayor of Tucson, Governor of Arizona & updated recommendations from the CDC have insisted otherwise... As such, you may feel encouraged to once more mark your calendars for the next *virtual* meetup of AZREIA from the comfort of your home or office!

This month's meetup lecture topics will be: "How to Find Leads in your Target Market" & "How to Fund the Deal"

Now that we have established the foundation of our real estate investing journey (your niche/strategy & target market), the next step in the Deal Funnel is about finally getting into the field: finding deals & putting together funding for your next property under contract! 

Pre-Register here: registration link through AZREIA

As we always do, we will be getting together on the first Monday of the month to talk real estate and learn from one another. The meeting typically runs from 6:00-7:30pm in the "age of Corona Virus", but folks are encouraged to stay later for questions and general networking as the medium allows.

Tucson AZREIA New Investor Subgroup's vision is to get new investors into action: saving capital, learning the market and doing deals. To support you along the way meetings will include presentations on topics relating to the new investor, highly collaborative breakout sessions where you solve problems as a team, games and activities to instruct or facilitate conversation about RE and money, and a platform to crowd-source input from your peers about deals you're doing or problems you encounter on your journey into REI.

Please do note these meetings are not instructional: we are not presenting a step-by-step model on how to invest in real estate and we will not actively direct you on the path we (whoever "we" are) deem the best path for you. This is a chance to learn, talk with and get to know other investors around town

Local community banks have a greater capacity to be flexible in their lending criteria, but only exercise that flexibility to the extent the know & trust the borrower. As such, it's generally best to approach those sorts of lenders in advance, perhaps even putting some money on deposit with the bank in the form of opening checking accounts and otherwise building a relationship with them now on the promise of future business. Just because they might reject you as a new account holder doesn't mean they wouldn't be more open to taking on greater levels of risk after years of doing business with you.

Here is a tool to help you find local community banks around town if you'd like. Several great options; I went with National Bank of Arizona for my business banking, largely because I already had contacts with their SBA & Commercial loan originators from prior networking events.

Just PM'd you. Check out www.azriea.org for information about the REIA we have here in Arizona, as well as the BP Events page. We're actually seeing several meetup opportunities every month in different parts of town, which I can only expect will continue to grow as the Tucson RE market continues to do well.

My advice: get the first deal done. It'll be scary and overwhelming, and the market might crash and all that blah, blah, blah. But just do the one deal, as best you can, learn along the way, & use all that to do another, better deal. BP calls it The Stack: start small and scale over time. Good advice!

In the interest in reviving an old thread, I have some data that I think might be helpful to a few of you on here. Thanks to the work of @Dave Meyer and the BP Insights team, I was able to take rental market data sorted by zip code to create the following spreadsheet of Tucson's top zip codes:

You will see I sorted the data based on average inventory for a 5-week period in February/March 2020: the number of rental properties being advertised "for rent" as presented in the BP Insights dataset. We can also see the "concentration" of rental properties per zip code (vs. all residences), which when combined with an "A, B, C, D Neighborhood" classification system (see this blog post for a simple explanation) can paint a pretty specific picture about what micro-markets might work for a given niche & strategy.

Apologies to anyone who attempted to join last month! Technical & Logistical difficulties in our Phoenix office prevented us from hosting our meetup as normal.

If you registered for the last meetup as a paid guest, please DM me or reach out Maureen ([email protected]) about getting re-registered for this month; your fee paid last month will transfer. Those of you AZREIA members get to come for free either way, so simply go sign back up.

Click Here for more info & updated links. See you there!