New Investor in PHX area

[Joshua Mchatten]

Hello everyone,

I'm a new investor eager to gain knowledge and start my REI journey. I'm not originally from the PHX area so I would love to connect and learn more about the market. Ive have actively been reading, listening to podcast, analyzing deals in the BP rental property calculator & soaking all the great information in BP forums.

I have 15k saved to invests today, I want to start my REI journey house hacking my first property with a FHA loan. I'm just not sure if the 15k is enough in the Arizona market. I'm flexible to most cities near PHX area I just want a market that make sense.

Any advice, questions you may have I would love connect & feel free to PM me. Thanks

[Jeffrey Daniels]

Greetings @Joshua Mchatten! I moved to Phoenix almost 25 years ago, and can only wish I was smart enough to have started with a house-hack back then. Even though I've experienced this city's "rise from the ashes" (harhar!) - I am still bullish on Phoenix and expect our organic home appreciation to outpace inflation. There is downward pressure on current market stats. Mostly, imo, a result of resale properties having been owned less than a couple years - I don't consider those as reliable indicators.

Getting into the rent game - I see so much competition in the pipeline as build-to-rent communties come online. In some areas, I've heard owners getting higher rents because of these - still I expect landlords are going to see increasing competition from brand new efficient homes, as well as some very sweet corporate apartments in walkable locations. They're not "cheap", but tenants who can afford it, and pay rent on-time, may be choosing Class A+, or a home that doesn't cost $500 a month to cool all Summer.

Figure FHA min down is 3.5%, which can get you into the $425,000 range - and you may still be looking at another $8,000 in closing costs. Hopefully a seller or builder will offer concessions to help with those, but seeing an overall decline in resale seller credits as well. Under $425,000 you're probably going to only see multi's in desperate need of capital expenditures to bring market rents. If you're willing to SFH and house-hack rooms, you'll probably be looking outside the Valley for cash flow. If you're just starting out though, breaking even on the monthly nut is winning, far as I'm concerned.

I've connected with a couple people just starting their Phoenix journey, and it could be fun to get together and hear your different visions. There is a lot of advice out there, still seems what's working today is overplayed tomorrow.