Phoenix Investing?!* (Read the BP book, blogs, & connected)

[Josh Angeles]

Hey All, First off this community is FANTASTIC!!!! I've been part of a # start ups, tech meet ups, other forums, and the energy, support, & attitude in this forum is phenomenal. I'd like to pull the trigger in the Phoenix or AZ area, but I'm having a tough time finding deals that fit the sound BP REI mold. My goal is to buy and hold to start building passive income. My criteria and general thoughts (this is flexible and fluid) - 1) 2% rule according to the BP book. It doesn't seem to exist in PHX ( it seems the .75% rule is more realistic) . 2) 100k-400k property value 3) moved from SF- I'm loving the people, the sun and all of the outdoor activities. The lower cost of living is great as well. 3)Sources I've met with so far- multiple wholesalers, conversation with a few BP contacts, local investors, and multiple RE agents. ( a lot of the wholesalers I've spoken with have overly optimistic ARV estimates ( i get it they are selling)) 4) Is Phoenix overpriced? Does anyone have suggestion on other markets for buy and hold? I'd like to make an investment on something nearby. But if conditions aren't right I'd rather not force the issue. I'm totally okay looking elsewhere. I know this topic has been covered multiple times, but I'd love to hear some recent thoughts on PHX area. Thanks All!!

[Nick J.]

Josh, What works in other areas, won't always work in your(our) area. The 2% rule is fantastic and if you come across any, please call me asap, I'll pay you top dollar ;) 

Really though, jokes aside. It is very difficult, if not impossible to find a 2% deal if you're relying on someone else finding it for you i.e. wholesalers, agents, MLS etc....Unless you can capture your own leads and negotiate your own deals, you will likely never see 2% deals.

Overpriced? Maybe. It's perspective. What is expensive to me, varies for you and so on. 

One aspect I'm not sure gets as much exposure as I believe it should, again, my beliefs are different so take it with a grain of salt. Equity investing. If you are investing in SFR's for the purpose of renting them out and not taking into account instant and expected equity, I feel you may be missing the bigger picture. Phoenix area experiences what seems to me higher highs and lower lows.

If your property is experiencing a higher value due to value increases, do you or don't you account for that? Do you capture that and turn it into leverage for additional properties? I could go on but I feel most materials don't think the same way I do. For me, SFR's are equity builds and Multi-Family is passive build. Meaning, I'm not going to get much, if any passive income from SFR's but I will more likely experience equity. I hope you get the picture I'm painting. I'm sure I am clear as mud.