Need Advice On Investing In Phoenix, Arizona Market
I live in San Diego, California but intested in investing in Phoenix, Arizona. I already have RE agent, loan office, and management company in Phoenix. I am thinking about buying SFR and 1-4 units then rent or may be lease option out for 2-3 yrs then sell and start the process again.
The reason i wanted to invest in Phoenix is cashflow. For ex: in San Diego, with 30% down I probably break even, whereas in Phoenix, I think I can get cashflow with 15% down.
Please give me your input/advice. Any suggestions good/bad are welcome. Things I should watch out for? TIA.
Sam
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[ Edited by vatt02 on Date 03/10/2004 ][ Edited by vatt02 on Date 03/10/2004 ]
Hi,
I live in Mesa (suburb of phx.) and I would recommend that you hook up with a RE club in the valley for networking and support. Azreia is great, so is AZpig. They have websites. ****Must Reach Freshman Investor status before posting URL's*** and ****Must Reach Freshman Investor status before posting URL's***
HI keymtn,
Is Mesa a good rental area? I am looking to buy in Glendale area. How is Mesa compare to Glendale?
Thanks.
Sam
I think the best way to buy cash flow is to buy the property for cash. Should this be correct?
DealerJo,
That is totally incorrect. You don't have to buy cash to have cash flow. You must be joking.
I have SF rental properties in Gilbert and Phoenix. The appreciation is not bad (7-10%), but the vacancy rate is higher than a few years ago. Make sure you have minimum 3 months of cash reserve. I've heard New Mexico has low vacancy rate, but only 3-5% appreciation.
Vatt02,
your post seems Sketchy to me?! Could be just me, first, why do you "think" you'll get cashflow there as opposed to anywhere else... Seems like a little property to take on for out of state... Again, just me.... Once i start lookin out of state, it will be for 100- 200 unit complexes... You need to be lookin at individual deals not areas and states... Its all about the deal, not the city you investing in to determine the size of CashFlow... Again, just my 2 cents.. Good Luck in your Investments....
Thanks for your input sKauGhTiEe. The cashflow I mentioned is for a comparison to San Diego market. You right, this is only a small deal. I think it'll be too much headache to invest in other state anyway. I am just not sure if I should invest out of state at all. I probably just stick around San Diego and nearby county.
Hi vatt02.
Quote:
On 2004-03-11 00:01, vatt02 wrote:
HI keymtn,
Is Mesa a good rental area? I am looking to buy in Glendale area. How is Mesa compare to Glendale?
Thanks.
Sam
I think Glendale has some great and not so great areas--Chandler,Gilbert, Surprise,are also excellent--lots of growth out here, and only about a 5-6 hour drive from SD.
I think investing in AZ area is better for appreciation than for outright cashflow . Definatelyl consult with your realtor that you have here.
Go for it!
Hi keymtn,
Thanks for your input. Currently I am looking to buy a 4 plex and SFR. You mentioned that investing in AZ is for appreciation not cashflow? I am thinking the other way around. The prices there are cheap compare to where I live. I was thinking to buy and hold it for a long term to build up equity.
I checked the appreciation from dataquick, Phoenix 4th quarter had around 7-9% appreciation.
Thanks.
Sam
Interesting, I also live in SD and cannot find anything that would give me break even cash flow, forget positive. I was thinking about Phoenix or Vegas. As for it being out of state I was hoping that a good Mangement company would take care of that.
Hi dstudeba,
I know it's been tougher now to invest in SD. I am also looking at Vegas area too. Vegas market is really hot, alot hotter than Phoenix. There are multiple offers going there. We have to do alot more research before we invest in out of state. I like Phoenix area with low appreciation. IMO, it is good a for buy and hold and equity build up strategy. Pls let me know if you decided to invest in Phoenix so we can share information.
Thanks.
Sam
Sam -
I have a few too many things on my plate now, but hopefully it will settle down by June and I will be spending more time on investing. I will keep you in mind, and would love to compare notes/kick ideas around.
- Dan
I am a California investor that bought a 45 unit property in Mesa. I have been through 2 management companies & this is my 3rd. Large complexes in Mesa are tough to keep full. It is very competitive out there with lots of promotions for low move in deposits & free months of rent. As with everything you have to buy smart. If you can find a California property that is cash flowing you are very lucky. To me it makes sense to buy in markets that are in a different economic cycle.
Buy right & Good Management are the keys.
Good Luck
Hi vatt02.
There are parts of the valley (AZ) that are seeing appreciation from 6-27%--I agree that the Phoenix city limit area is probably around 6-7%, but the outlaying areas that I've mentioned are seeing a much better appreciation level than that. Because it is 'so cheap' the rental market is a little soft, but still would make an excellent long term investment (I think), Las Vegas is great, but there's a LOT of competition there--people are going in with cash outright, and sometimes buying more than the asking price on some deals--but since I don't invest there don't listen to me about that.
I was in SD last week--sure a lot cooler than here!
Good luck on your investments and go for it!
[quote]
On 2004-03-23 12:54, dstudeba wrote:
Sam -
I have a few too many things on my plate now, but hopefully it will settle down by June and I will be spending more time on investing. I will keep you in mind, and would love to compare notes/kick ideas around.
- Dan
Hi Dan,
It looks like we're looing at the same time frame here. I won't be able to do anything until May or June.
Sam
Hi Vatt02,
I'm having the same problem here in Northern Cal. (San Ramon). General advice is to invest close to home but there is no way to get positive cash flow. SFR start at around $450K, multi-units duplex start at $650K with not much inventory around.
I thought about Arizona but looking through the internet, the prices still seems a little high...the downpayment to achieve slight positive cashflow.
I've look at Nashville, TN area (again on the internet) and this area seems more reasonable. I hear the area is growing. Duplex can be had for around K80 to K90. Downpayment of 5%, rental between 400-550 per unit= 800-1100/month for duplex. There are plenty of inventory too, at least compared to over here. Now, if I could only find real estate broker who I can work with......
Anyway, vatt02 take a look and let me know what you think. Also, any members from TN area, please comment.
Ted
[ Edited by tws on Date 03/24/2004 ]
[ Edited by jimh634 on Date 09/27/2005 ]
[ Edited by jimh634 on Date 09/27/2005 ]
Hi All,
so far I 've look in Riverside, Vegas, and Phoenix area. Riverside county is one of the hottest RE market right now. If you go for appreciation, I think you should buy in this area. Buy and hold it for a year or two then sell it. Phoenix is a low appreciating RE market. Rental vacancy is high in Phoenix. I haven't look in Nashville. I think that is too far for me to look into that market. I can fly to Phoenix about an hour buy probably 4-5 hrs to Nashville.
Anyway, if anyone of you guys plan to buy anything in Phoenix areas let me know. May be we can meet and have some ice-tea together there.
Good Investing.
Sam
Now do not get the idea that I am blowing the bugle for California. It is just that there is an infinite variety of properties scattered all over the place.
If I were resident in San Diego I would be heavy into military conversion which is going on in a very subverted manner. Seems that most military housing is how shall I put it. Well ok here goes Primative for first three graders. Nobody really wants in they want off base.
I would start to wander up to Julian and keep going, back down through that whole area. I would check Probates as many elderly persons have settled in that area. I would examine with special interest many of the shacks sitting on multiple acres inhabited by strange withdrawn types. I would offer them a price above what they have seen to date and then rehab the dwelling bringing it into modern times. Bounce my rents and what happened? An income stream.
Ramona start up the 78 hwy. poke around under the recreation lake to your left. Perhaps pick up a 5 acre parcel with one badly built house on it and add three and create a cluster. There you go income stream. You see the idiots have passed an ordinance that they cannot cut up any more of the 5 and 10 acre plots. Soo dont, just put clusters on them 3 to 5 houses a cluster, feed up to them with one country road. A country road. You take a bulldozer and you do a road up to the dwellings. Then you coat it with little rocks and some pea gravel. Dats a country road.
If your guys dont do this soon I may just come down there and play. Oh the sound and smell of a plasma cutter as it spits and sparks cutting doors and windows in lovely chinese built containers. Perhaps I shall put fake shutters at the windows and make all the doors divide in half so you can lean out without falling. I shall disquise the solar panels by making them resemble Mansard Roofs. Brass kicks on the doors. Hang a cow bell from a rafter. Whatever. You can have a lot of fun in that area cause it is receptive to almost any style of architecture and the population is diverse and interesting.
Look for targets of opportunity after all you are in the field of Real Estate Investment. If the old man will not sell, take a 99 year lease with permission to develop. You leave him alone in his shack and add three others with real roofs and toilets that work. Electricity expensive in the area go put the panels on the roof and spin the electric meter backwards and pick up a credit.
Great area lots of hidden opportunities. Everytime a Meth lab blows up, be there offer to buy the dirt and scrape off the bottles and stick up another really modern structure. Why you might heaven forbid, think about using ISO containers to build your cheapy houses. I won't mind and the containers will love it. You think it is fun riding back and forth to China all the time?
San Diego county a great spot. Stay here and make a contribution by playing the game you know best. Houses!!
Cheers Lucius 8-) 8-)
[ Edited by jimh634 on Date 09/27/2005 ]
I am reading all your comments. I am from Glendale, AZ and am just starting out. I have read 5-6 books so far and am anxious to get started. Just not sure about the inital $$ down and qualifing for the monthly pmts in addition to my own mtg. Is it wise to purchase a new home, as there are some nice, low prices with new home builders - appreciation goes way up almost after your purchase.
Also, I would love to attend any investment clubs, etc, need to network and meet others doing this same thing. No ideas on location good mgt firm, realitor, or how to wholesale home prices. Any help, suggestions would be greatly appreciated!!!