All Forum Posts by: Serge S.

I'm wondering if all of you Arizona investors are still active at the moment. We have had quite a run up but things feel as though they are starting to slow down. Feels like a dangerous time to buy and cash flow is getting tight.

I have not done much of anything in Maricopa county instead concentrating on Pinal, Gila and Cochise counties. Still not easy to find deals but definitely easier than metro PHX.

Would love to hear what kind of AZ opportunities people are working on.

Worst advice I got was from a seasoned CA RE investor that told me circa 2009 that I was buying too much too fast. My response was that my biggest risk was not buying enough fast enough.

@ankitduggal I also enjoyed the podcast. One thing that was glossed over was your transition from rentals to tax liens. What did you do with your rentals once you decided to make the transition? Did you simply had them over to a property manager or sell? I would love to hear more about that transition.

Yes definitely had to make many adjustments. My strategy has never been sub $30k and those three are the only ones I have in that class. During the time I purchased those I was actively buying $50k-$70k newer homes that rent in the $1400 range. I much prefer that tenant class and diverse metro PHX locations and my portfolio is mostly that asset class.

Today those homes sell for $175k-$225! Great for my balance sheet but not much room to grow that strategy as rents have stayed the same. I have had to spread out to counties as far as 2-4 hours away and build a team from scratch to capitalize on those opportunities. In that segment I am purchasing homes around $50k and renting for $1000. Still don't use a PM as my operations can handle it. I've also sold some of those first generation homes for nearly $200k and purchased 3-4 cheaper homes in the long distance submarket. Its slow but steady cash flow growth which is fine by me. Here are some pics of these 2013-2014 AZ submarket $50k homes

In LA this may in fact be a deal but its certainly not a buy and hold. Most likely something where the buyer lives in one unit and rents out the other two.

I use buildium for nearly 100 units. We picked it as it was the only one at the time that had an HOA management module. Overall it works but there are a few significant downsides:

- NO ability to create a cash flow statement. They have promised to add this feature for over 2 years now and can't seem to figure it out.

- Cannot import data into quickbooks or just about anything.

- Cannot run reports by a custom mix of properties. This one is a killer. You have to trick the system by setting up another user and assign properties to that user and then log in as that user. Its a huge time waist.

They have not made many improvements over the past few years and they seem content to compete on price. Other than that the software serves its purpose. I pay around $100 per month after all fees.

Keep in mind that switching systems with this many units is a major time commitment so make sure you choose wisely.

Great thread. I don't see any Southwest representation on the tread so here is a little something from AZ! In Arizona the $30k single family home is long gone. Here are three I purchased when the pickings were easier. First one is a duplex each side renting for $500 and the two others rent for $695. Ave purchase price of the three is almost $30k even.Each one needed only $3-4k in rehab. Each is worth between $60-$75k today. We have had a lot of appreciation in Arizona 2012-2013 but it is clearly starting to level off particularly in the submarkets.

In my area these properties require significant remodel costs. They take twice as long to rent as my $70k newer homes and need to be remodeled again once tenant is out. It's monthly drama collecting and constant repair expense. For every year the cash flow comes in at expectation the next is a disaster. I have invested in both types of properties and find over the long term a $70k $1k rental will perform better than the $30k $600 rental. Not saying the strategy doesn't work in some areas but over the long run I will take the newer quality property all day. We are all about the numbers but there is a such thing as phantom returns which only look good on paper. My current portfolio is a mix of both and it is clear now with long term (4 years) actuals that the higher quality has better real life returns.

Bill Exeter thank you. Would be interested in the technical details typically challenged. Is it holding period, held for investment criteria? Ever been an issue of not disclosing intent to 1031 in the sale or buy side of the deal?

Wondering if anyone had a 1031 exchange challenged by the IRs and the issue and result??