All Forum Posts by: William Wiebolt

We own a couple hundred SFRs in AZ and FL that we acquired in 2012-2013, and are currently flipping about 25 at a time in AZ. We are increasing our exposure in AZ flips, looking for higher end properties with large spreads ($100k+) and mixing in simple flips under $250k. AZ is very hot, FL has not popped yet. FL is seeing lots of pressure from builders, so average sellers are having difficulty offering a nice enogh home for people to want to pay for. Builders are offering up to 5% incentives to both the agent and the buyer, so they really have taken a foothold. I see opportunity there also, more on a buy & hold for 2 years then sell. I think AZ has 1.5 years left before a pullback but we will be out before that. We're slowly liquidating our rental portfolio, and flipping properties in the mean time.

In both the AZ and FL markets (and other southern markets with heavy investor presence), it is absolutely crucial to watch what Blackstone, Colony, and American Homes 4 Rent are doing. They own 10s of 1000s of homes (maybe 100ks?) in those markets that they are currently holding as rentals. These homes are the same kind we have as rentals, the typical starter home which is selling for $180-220k in AZ right now. There is excessive demand in that range right now and limited supply which is in part due to the hedge funds and smaller companies like us who are holding on to them and using them as rentals.

In terms of affordability, I think AZ and FL can both sustain an overnight increase to 6% on mortgages, and a 15% increase in house prices. Median income in those areas is increasing, and there have been some interesting investments made by companies like Intel (7 billion in Chandler I believe). In addition, more people are retiring every day, which is also a good thing for the southern markets as baby boomers from the north seek a warm place to retire. Dipping my toe into the 55+ markets as I see deals come through, I think there is a real demand for anything done right. We don't skimp on our flips, and we've had good success in terms of days on market and contract ratio.

My two cents. I have followed BP for awhile, but haven't posted. I'm from Fargo, ND and in the event anyone is considering this market for any reason,  I would strongly try to talk you out of it. Vacancy rates up, prices way too high, etc. 

Thanks all -

William Wiebolt