BRRRR vs. Flip: What is the PHX market?

Question

Looking into investing out of state and looking in the Phoenix area. I don't want to base everything on a "rule" or a test, but finding most deals so far struggle to meet the 1% rule, let alone come close to the 2% rule. I'm far more concerned with long term appreciation, but finding a deal that cash flows $200+ has proven difficult to date as I just dont see rents over $1200-1500 in most B/C+ neighborhoods.

Is this more of a reflection of a market to flip or just not having found the right deals yet? Are other having success rehabbing and renting in the Valley of the Sun?

Is this more of a reflection of a market to flip or just not having found the right deals yet?  Are other having success rehabbing and renting in the Valley of the Sun?

Account Closed · Answer

I'm doing fine in Phoenix. I bought a 4 bed 2 bath flip for $5,000 to the seller and taking over their $164,000 mortgage. I'm putting $60,000 into it and I have an offer in writing for $325,000 for when it's ready to close. I'll have a buyer's agent fee of 3% for a net somewhere in the area of $85,000

I bought a 3 bed 2 bath in Mesa for $31,000 cash to the seller and taking over their $121,000 loan. I have an offer on it for $255,000 "as is". I might let the new buyer do the rehab or I might fix it up and get the rest of the equity. I could end up selling it for a Turnkey for $80,000 and the investor taking over the mortgage and then put a Tenant Buyer in there for the investor who will get $25,000 Option fee from the new buyer along with a rent of $1,650 a month for a cash flow of about $650 a month.

I don't know if that meets the 1% rule but I'm happy with it and my California investors are happy with them.

Jeff Slusarz · Answer

@Mike M.  definitely sounds like you're thriving!  Are you utilizing a direct mail or another more aggressive tactic to find deals?