Buying a new build to rent and hold in Arizona

[Frank Mendez]

Hello BP,

Im a new investor looking to purchase my 2nd property for long term investing. I live in the Phoenix metro area, with the market being so competitive here I was thinking of purchasing a new build on the Westside.

I've been looking to purchase in the west valley: Tolleson, Goodyear, Avondale, and Waddell areas. My thought process is new builds are 1st come 1st serve and won't have to worry about the competition. 2nd, my plan is to purchase, live in it for a year and then purchase my next property. Given the current market and projections for the Phoenix metro area, im banking on appreciation and cash flow as rents/market increases.

Thoughts?

[Melanie Johnston]

@Frank Mendez a new build can be a great option for all the reasons you said. I helped a BP investor from Texas 1031 exchange into a new build in Goodyear. He paid $323,000 for a 3/2 in a small KB Home community, waited 4 months to close and immediately rented it out on an 18-month lease. Won't have to worry about the AC, etc., for a while as 1) it's new and 2) it's under warranty. New builds can be competitive, I learned recently. I was showing a couple homes near Norterra in North Phoenix. The sales agent said they had a 200+ person interest list. And this was in a higher price point. All those people won't remain on that list when it comes time to contact them, but still. West Valley is the way to go.

At the AZREIA meeting on Monday night they showed the map of future development for Metro Phoenix (you should be able to find it on the Maricopa Association of Governments website). Development will be occurring so far West and Southeast that Goodyear and Avondale will be the "center of town."

Best of luck!

Melanie