Looking for something to meet 1% rule in Arizona or TN

[Stephanie Gledhill]

I am currently looking for a property to meet the 1% rule. I want it to be low maintenance, so I would like a new(er) property. I am a buy and hold investor. I currently have a property in TN and live in CA so Arizona seems interesting as it is close. Any ideas? Thank you in advance.

[Chad McMahan]

Originally posted by @Mike B.:

@Chad McMahan

At the risk of thread hijacking: can you elaborate?

 Hi Mike.

You bet. If approached correctly (hand picking those with the greatest potential for STR cash flow improvement + best current as-is cash flow), Sedona SFH's between $1M - $2M are yielding gross monthly income at approx. 1%-1.5% of purchase price + renovation, especially after reasonable improvements (Some are completely turn-key but have higher cost, some need $50k - $200k).

And I agree with another post that in most areas, this is not attainable anymore. I'm extremely Sedona STR savvy, as it's 95% of what I do and even I have to bend over backwards and really hustle to put together transactions for my clients that yield these results. Some of the challenges:

1) Pairing clients with properties that with an affordable plan yield the results the clients need

2) Get the property into contract in this aggressive sellers' market with strong STR property buyer competition

3) Deep due diligence to minimize property risk during inspection period + create best COE plan to yield the highest possible cash flow + start scheduling post-COE reno work

4) After COE, get the hot potato moving- help in any way necessary to make sure my clients get this work done quickly and without complications so they can get their property on the rental market ASAP and start generating cash flow.

5) Occasional STR audits as requested (always an option) by clients, to further boost their cash flow, and effectively their home value- based on income approach. I recommend this 1-2 times per year, as it yields a 10% annual boost, on average. Short version, I analyze current marketing approach, behind the scenes booking software and of course the property, to see what can be economically(usually free) improved, to push the net income higher. I then provide a list of recommendations and if desired, communicate with the local property management company (I'm on great terms with all of them).

Mike, if you would like further clarifications and elaboration, just let me know.