Flipping in Phoenix

[Fran W.]

Hello,

I just started in the RE flipping business. I talked to several Realtors. The two that I find them helpful have been telling me the profit is very very thin in the Phoenix market. I am looking for SFH with repair values of ~$100k. The Realtors said $10k profit is unlikely and very difficult. One Realtor suggested to bid at the courthouse step. I don't really like the idea because there is no inspection period after the bidding.

My question is.. is the profit really that thin in Phoenix? Is it Phoenix specifically? I have read a lot of people's post saying they could get $15k for a project. Is it because this Realtor I talked to has no flipping experience? He mentioned he has been a bank owned listing agent and he knows banks have already factored in repair cost when they list. He knows the margin would be very very thin..

I have read other investor's post. One strategy suggested to acquire good deals is to make a lot of offers. Is this true?

I have a lot of questions.. greatly appreciate any insights!

[Nick J.]

Well, in that case, you should be happy with a $10k profit. You're trying to purchase a home, rehab and sell it for a profit in an area(city) that doesn't have very desirable neighborhoods and your pool of buyers are very limited.

The $100k mark is a very very hard mark to grab a hold of. That market here in the valley is better off left to L/O's, RTO's and rentals. Especially in the Glendale/west valley areas.

Your realtors aren't giving you the runaround especially the one who told you that it will be very difficult.

Without knowing anything about you, but knowing my city like the back of my hand(been here all my life), unless you have a proven system and a track record, I would seriously consider other options, different price ranges, different neighborhoods.

What has held true for me for as long as non-resident investors have been asking me has been telling them, that if you google map the valley. Found the I-17 & the I-10 and then took the entire west and north directions until you got all the way west to the 101 freeway and as far north as Peoria, that would be the biggest section of the valley metropolitan that you should stay away from.

This isn't me saying that because thats where I invest and I don't want you in my 'territory'. I don't even consider that big spot on the map for myself. Guess where the city of Glendale is?

If your strategy was a little different, you would be ok. The fix/flip strategy in that are is too tough for someone who isn't local and doesn't have the exit plan in place before the purchase is made i.e. buyer in hand.

Best of luck to ya, ever wanna chat about my city, I'd be more than happy to help for free.