Exit strategies for a SFR purchased in Phoenix

[Kevin Phu]

Wife and I purchased a SFR in Phoenix a few months ago with the plan of making it a LTR. We thought we had our rental numbers right but after listing it for just over a month, we're looking to lower the amount again and possibly look at exit strategies before we start losing money on the place.

We purchased it for 335K and it appraised for 360K. We also put some money down so we are sitting at about 18% in equity. Based on comps, we might be able to sell it for around 370K and after holding costs, commissions, fees, capital gains tax, we are likely looking at breaking even and getting our initial investment back. 

We've listed the property on Zillow and Apartments and have received several applications but denied every single one due to evictions, criminal records, not enough income, excessive debt, etc. We're looking to lower the rent lower but I'm not sure that would bring in better qualified applicants.

Are there other strategies we should consider? Section 8? Corporate lease? Best case scenario for us is that we get a long term lease in place and get enough in rent to cover mortgage and put aside ~15% in capex, maintenance, and vacancy reserves. If the rental market keeps going up as it has, after the first year our cash flow numbers would look much better but that is a way out. 

[Account Closed]

Quote from @Ryan Swan:

Hopefully you didn't work with an agent from BiggerPockets that encouraged you to buy a SFH rental in Maryvale?! If you did, please share their name so we can shame them publicly. It's almost like buying a rental under the sea and then being surprised when all of the applicants are fish.

Very funny & true.

I've been flipping in Maryvale for the last few years and admittedly I've done just fine. However, it isn't for the faint of heart. 

I've had break ins, doors kicked in, windows broken, wiring stolen out of the wall, landscaping missing, squatters, crack pipes and crack pots, dog bites, people talking to non-existent listeners, lots of people with all of their worldly possessions in stolen shopping carts passing by, extension cords thrown over the fench and attached to my outside outlet, hoses attached to my water, refrigerator stolen, shootings, lots & lots of helicopters overhead, and I've gotten to know a few Phoenix police on a personal basis. One enterprising individual turned my rehab into a AirBnB for a few nights and made some money on it.