All Forum Posts by: Benjamin Riehle

Hello Christopher, 

Tucson is lagging behind Phoenix substantially when it comes to job growth. There are a variety of reasons for this, however one of the biggest I have seen is the anti-business stance of Tucson. For a long time Tucson has been a "snowbird" or retirement community. This has resulted in a push to keep a small town feel and ultimately prevent overall growth in the city. 

The good news this is drastically changing. There has been a much stronger push from the local government to make a substantial shift to a pro-business community. Additionally, the University of Arizona and the TLA is doing a much better job keeping companies that are started from research done at University in Tucson rather than watching it leave to bigger markets. Caterpillar is adding 500 jobs to the downtown area, there is now a direct flight between New York to Tucson, and the list goes on...

Tucson appears to making all of the necessary changes to really allow it to "Boom" over the next decade. 

Over the past years I have concentrated my efforts towards investments in the downtown Tucson area. This has required a degree of creativity not encompassed by the definition of a traditional real estate agent. The integration of complementary services in my business through layered partnerships such as sales, property management and construction has been critical towards my team's success. One such project which without this understanding would be inconceivable is the remodel and renovation of a historic church located near the heart of downtown Tucson.

The Journey

This journey began as most investments do for my team, which is a diligent search and analysis of properties that revealed a quaint church built in the 1920’s. At first glance with its deteriorating look the investment was unreliable, but after in-depth analysis we began to see possible opportunities. These are the type of details that fall through the cracks and most investors and agents miss. The church, I uncovered was not a sole property and included houses and lots directly adjacent, which if purchased in whole would be sold at a discounted price. This opened the door to a variety of options, but we settled on renovating the 2 houses, (one to rent and one to flip) selling the lots to a new build investor and converting the church into downtown lofts.

This plan allowed us to create immediate cashflow and set the project in motion. Initially, for the church, we thought of knocking it down to build a small development but reconsidered because of my commitment to reinventing the area yet holding its historic appeal while being profitable. To accomplish this, it would mean converting the space into rentals and in the future; expand into possible commercial use. The proximity to downtown Tucson, the vibrant region, the unique and modern build would create remarkable demand.

I pulled members of my team from each of our business segments to gain their feedback and ideas and together we created a solid plan which included data and market analysis, construction estimates, project deadlines, and ROI projections (to name a few) as a guide to ensure a rewarding and lucrative return.

Partnerships

Through our partnerships we sold the vacant lots and remodel and rent/flipped the homes adjacent to the church. Remodeling of the church is well underway at a staggering pace towards completion. In fact, this past month, construction laid the final touches on the roof, which towers in its friendly neighborhood. When complete the property will feature 4 breath-taking units, a spacious lobby, renovated historic exteriors, modern interiors; all in the heart of Tucson just minutes away from the University of Arizona and downtown Tucson.

This “gem” of a deal would not be possible without the systems, experience and creative intuition we have worked hard to achieve. 

Thank you everyone for the comments! I am getting ready to right another article on the local market and would appreciate any questions that you may have about the Tucson market that I could answer.

Happy Investing!

For purposes of transparency I want to disclose I am a licensed real estate agent.

When I was in my infancy of real estate investing and before I was a licensed real estate agent I had a deal fall apart that would have netted over $100,000 in a 4 month period. How do I know this? Because I watched someone else close on the property and sell it 4-months later. I was 21 years old. Let that sink in for a second... 21 years old, new to real estate investing (this would have been my third deal), had the property under contract and then boom! The deal unraveled and someone else purchased it...

I am the last person to pass the blame for lost opportunity, without question my lack of experience resulted in this outcome. However, Looking back with 6 years of experience, it is clear, the real estate agent who was representing me had no business on the deal. I am confident the outcome would have been different if the agent had the experience with investment projects and creativity necessary to get the transaction closed,

Not all real estate agents are created equal. Having the right agent working for you, can be the difference between making $100,000 or watching someone else acquire what you lost. Most real estate agents are likable and generally understand the market. However, only a small number can actually go to bat for you and ensure you come out ahead.

When interviewing agents to represent you, it is important to be upfront about the type of knowledge you need the agent to possess. For example, if you are looking to purchase a multi-unit long term investment property; you need an agent who understand the areas rental market, cap rates, expense multiples, residential rental leases and the list goes on. If an agent lacks experience in any of these areas, you need to find someone more qualified. At the same time you should never lead an agent on. Real estate investing is about building relationships. The key is to find someone who understands what you are looking to accomplish and possesses the skills to make those dreams a reality. 

You wouldn't go to a podiatrist if you are having chest pains and you shouldn't use an unqualified agent when purchasing an investment property. Trust me, it can be very costly... I learned the hard way!

One of the most common questions I am asked when talking to newcomers to real estate investing is, “What is the most important thing I can do to be successful?” My reply is always the same, never stop reading and never stop learning. Remaining “learning based” and making it a part of your life’s foundation will pay substantial dividends. It is the quickest way to gain knowledge in any field, change and broaden the way you view the world and improve your personal development.

Naturally, the follow-up and difficult question is, “What should I read?” One of the most overlooked aspects of real estate investing is that at its core, you are becoming a business owner, regardless of whether you are looking to purchase an investment or become actively involved in another sector of the industry. A successful entrepreneur has a strong understanding in marketing, accounting, finance and negotiation (to name a few.) The quickest way to accomplish this is by devouring as many books as possible.

I have set a goal of completing 50 books a year with a minimum of 1 hour of reading per day. My daily objective keeps me on pace of 1 book a week, which will accomplish my yearly target. I divide this into audiobooks, which I listen to at the gym and hard copies that are kept on my night stand. 

For everyone involved in real estate, at any capacity, I cannot stress enough how important is is to continue learning and increase your knowledge.

Happy Reading!

Great advice, Arizona would be a place you should consider. You can find info about the area in the post below.

https://www.biggerpockets.com/forums/601/topics/36...

Hey Chelsea,

Would love to connect and discuss the Tucson market. Feel free to reach out any time to discuss!

Arizona has had the stigma of being a retirement community in the desert, much like that of Florida. The real estate industry in the state has matured and offers a variety of possibilities with more lucrative options, ideal for investing compared to neighboring states. The demographic has broadened and strengthened the demand in real estate throughout the state.

Job growth in Arizona has steadily risen to twice the national rate in areas such as healthcare, retail and financial sectors. The strong economic growth has led to an increase in buying versus renting, which recently was as high as 40%.

Home prices in the Arizona went through sharp highs and lows in the real estate bust, which saw a small boom with vast foreclosures. This fluctuation has run its course and left a more reliable market in Southern Arizona. It is expected that home prices will rise approximately 25 percent in the coming years, which makes it critical for anyone looking to buy or invest to do it now.

The expected rising home prices in the next few years make real estate a strong investment, with the potential of rapid equity growth. With home prices in line with average community incomes the risk of investing in real estate is greatly reduced.

Population growth in the state has added to the potential in the industry. Options available to buyers are at an unprecedented level not seen in years.

If you are looking into or planning on buying real estate in Arizona, the time is now due to the expectation of rising prices over the next few years. The investment potential is substantial, especially in relation to the neighboring state’s real estate markets.

When it comes to the home remodels and renovations, there are many construction companies offering specialized services. Beginning a renovation project on your home can be hard and confusing for people who are not a part of the construction industry; therefore, hiring a general contractor may not be the first priority. However, general construction contractors offer a lot of benefits that will ensure the success of your building project.

General Contractors Can Solve Most Your Construction Problems

When planning a project, you’ll need to consider which construction company to hire. By hiring a general contractor, you benefit from their expertise and experience. When it comes to the selection of subcontractors and suppliers, you will have the peace of mind knowing that they are hiring the trades, vendors and suppliers who have the right experience and can deliver what they promise.

General Contractors Are Focused on the Customer

When it comes to having a successful project, there is nothing more important than communication. From the intricate details of your design to budget complications, getting it right requires effective communication. Great contractor’s take the time to ensure that your goals for the project are achieved. Additionally, they are readily available to offer advice and to make strategic changes that will benefit the project.

Make your project as painless as possible

Another benefit to hiring a general contractor is the fact that you can relax. General contractors make construction projects as painless as possible. They take care of the details, such as getting permits and ensuring that your building is compliant. With the ability to sit back and watch your project materialize, general contractors are effectively your partner in business. They help you realize your construction dreams while minimizing the day-to-day stress and managing the details.

Achieve Your Goals

General contractor services take the stress out of construction projects, allowing you to realize your strategic goals without the hassle.

A recent article in the Arizona Daily Star talks about the substantial investment potential and recent radical growth in neighborhoods near Downtown Tucson. The Barrio Hollywood Neighborhood was one of these neighborhoods that was hit hard during the housing crisis, but has recently seen home prices soaring.

I recently made a large investment in the area, and am excited to see attention it is garnering from the local community. Unlike most organizations, I believe in keeping the historic look of the neighborhood, and revitalizing the homes, while allowing them to keep their rustic charm.

According to the article the amount of sold listings has more than doubled since 2015 and home prices have increased from $113,000 to $143,000 in the last six months

Although the neighborhood may not be quick returns, there is definitely long term potential in the Barrio Hollywood Neighborhood and we look forward to further investments in this community.  

Source: Arizona Daily Star