All Forum Posts by: Tim Winter

Hey @Isabella Donadio , Adding on to what Ryan and the others have said, it's all about the location. The main urban areas for renting are Tempe, south Scottsdale and downtown Phoenix. When units I manage in those areas come available it doesn't take long to get multiple applicants, even when raising rents. Rents have been on the upward trend for years and show no signs of slowing, which is drawing a bit of institutional investors to the area. 

While I agree its a challenge to find good cashflowing properties here in Greater Phoenix area, it's not impossible. There's always deals to be had, if you know where to look for them. 

As far as concerns for a bubble, the real estate market is always cyclical, and if you research the trends it usually shifts every 5 1/2 years. Our last shift was a few years ago, and it wasn't very big. Most people didn't even notice much change. The next one might be a bit larger, but they are thinking its still a few more years out.. unless something major changes in the political or economic climate. But no one has a crystal ball. You just have to keep your eye out for the signs that things are shifting and adjust your investing accordingly. 

@Thomas M. It all depends on what your investing goals, strengths and passions are at. You can blow the money on an investment you don't care about or understand or spread them out over a few and try out various options. Personally, I'd say you should research what you like, and where you feel your personality fits best. There's a myriad of options under the umbrella of Real Estate Investing. 

If this is your first rodeo, I might recommend just starting out small. Find a "good deal", that even if you own your own home, target a place that is in an area you could stand to live in, and buy the ugliest house in the best neighborhood. It was good enough for Grandma and Mr Nickerson, it'll work for you. :) That will give you some first hand knowledge of analyzing deals and applying them, and if if you don't get a home run out of the gate, at least you have a nice place after the rehab to live. Lessons learned that won't break the bank (if it's a truly 100% investment property.) 

Knowledge is definitely your best first step. Have you tried this book list?  the Investing Book List or this Ultimate Guide to Real Estate Investing yet? It's a good list, but the book list I'm surprised they didn't list William Nickerson's "How I Turned $1k into a Million in Real Estate in My Spare Time" which I consider THE classic and upon which most current RE gurus have based their teachings on. In martial arts they always taught us to learn and master the basics first, and Nickerson teaches the only method that has stood the test of time, 50+ years and still good advice (though the tax advice you can obviously skip... :)

Also, a good sanity check is T Reeds list of gurus and his BS tests that he's done on each. It's a good way to double check you're not over drinking the kool-aide of any one guru.

Happy investing! Let me know if you need any advice on the Phoenix Metro area, more than happy to help.  

@Jeff Hassler Any reason you haven't considered partnering with a local resident to do investing? Leverage their credit history, and combine with your investment knowledge and capital? Picking the right partner is like marriage, has to be the right person, but when you do find the right person, it can work magically. 

@Jason Mendoza If you're looking for rental property data, most often rentals follow two things. Job growth and availability of rentals. You mentioned the Cromford report and city-data.com which are good information for current or past data, but if you're trying to forecast into the future, you need to get involved with the data of where things are going to be developing in the future. That data you can get from where things are going to be built in the future. Where are permits being pulled, where are the areas of development happening, who has plans to move into which sectors of the city (i.e. large business moving into the area like Amazon, Apple, Walmart, Banner, banks, ASU (and all their affiliate campuses and satelitte campuses) Intel, USAirways, Dignity, Amex.. if you can follow where these large employers are bringing in jobs, then housing will follow. 

If you join and attend the chamber of commerce or building planning meetings and organizations you can get a sneak peak into where the next areas of future growth will happen. PM me if you'd like some more info on how to get started. 

Its down by rural Buckeye, near Tonopah, where they could get dirt cheap lots.

The rental market in the core urban areas might have reached the saturation point, with permitted builds coming online, but they still forecast that we're short of the 30k new renatals that the Greater Phoenix area will need in the coming years. But it all depends on which economic forecast you listen to.

https://www.google.com/amp/s/amp.businessinsider.c...

I'd have to second what Dick Rosen said, it all depends on what you're looking for in each of those areas. There are some good pockets, and then some not so good. Are you looking for just cash flow, great tenants, or long term appreciation? Of course everyone is looking for all three, but what is your main investing goal? SFH, MF, condo/townhouse or vacation rental? Lots of variables.

As was said before, I have yet to see a dollar for dollar increase. It does raise the perceived value but not for full price.

There was one hedge fund owned property that put solar leased panels on unit and tried to raise price because of it. Leaswd panels were a negative for the buyers as they have to qualify separately from the loan to buy the house. Wasn't sure what the tactic there was. Also house failed to appraise for their increased value, they refused to negotiate, so it went back on market and sat for months.

@Joe Splitrock @Jay Richards

Agree with what Joe said Jay; your best return would be to first educate yourself in what your passionate about and how to make money at it. You put in the hard work to save that money, so what will work for someone else, won't work for you. Only you know what that is. 

If I had $100k at 21, I probably would have done exactly what I did, just a little faster. Keep buying a home that needed work, fix it up, and in a couple years look for the next one as I roll out and rent it out. Keep doing that every 2-3 years, selling and reinvesting any poor performers or before any down turns and when you look back at 31, you'd have 5 or 6 properties. 10 more years you've got 10 or 12. Another 10 you focus your extra reserves on pay down the real keepers and you'd have some free and clear money machines.  

Section 8 is a great way to earn extra cash flow, and as previously mentioned in lean times, that is great. But keep in mind: while you can screen your tenants, you can't screen your tenants friends, family or associates. 

What I mean by this is that lets say you screen a great elderly lady who's on section 8, great at upkeep on your place, never a bother, you get your above market rent on time, no issues from the tenant. Let's also say for instance her delinquent thug of a grandson comes over and visits frequently, with a group of his "friends" and eventually threatens the life of one of your other tenants, leading to many phone calls, police visits and filing reports, etc. How do you screen for such a situation? 

I found you can't. 

Cap rates are compressed in Greater Phoenix area, but there is some good buys in the fringe areas, or if you go smaller into residential (i.e. < 5 units). With the expected growth rate and lack of supply in MF here, the market has been dominated by institutionals(hedge and pension funds, insurance companies, etc.) looking to park money , compressing cap rates. 

The lesser popular MF combos (< 5 units), especially the non-standard complexes of either cottages or a SFH with livable out dwellings are less attractive to appraisers and lenders, and that extra challenge means you can get some price negotiation.

Also, if you're looking to owner occupy, a good alternative to duplexes is a SFH + guest house, or a SFH that you can reposition a garage or workshop into a guest house or 2nd dwelling, and has no airbnb restrictions.