All Forum Posts by: Brandon Patrick

Craigslist isn't what it used to be, and even back in the day was not a great producer. I've seen several investors on Facebook get fried by local groups "Watch out for this scammer" type of thing. But that's mostly small town stuff.

Dollar for dollar, my best results have always come from Direct mail. I had a decent internet funnel at one point, but found that any who seek me out would also bounce right from my site to many competitors. When I would show up to look at the place, I always had company.

Jerry who do you use to send the direct mail out?

When folks call from the mail, while I have them on the phone, I have them exclusively. I can get a lot accomplished in the original call that a webform simply wont accomplish.

It's challenging but my prediction is that as soon as rates drop which has caused demand to artificially lower, demand will go crazy again and so will prices. My strategy right now is to find as many seller finance deals as possible where I can be close to breaking even, if not I am finding end buyer and wrapping for cashflow. I'm able to do this because I still have a good income to pay my bills with my job, I mean buy properties that just break even. Now is the time for creative RE. Also you have VA, are you tapped on that as far as what you can use?

@Brandon Patrick: I hear you. I bought a property in North Phoenix a few months ago, to make it into an STR. I found a super deal (distressed) off market, where the ARV appraisal was $750,000 and I negotiated to buy it for $525,000. It has a view, a pool and is in a nice place under Shadow Mountain. We've fixed it up. Complete with furnishings. It now values at $780,000. It actually went up in value, in a "down" market.

In January AirDNA said it'd rent for $545 a night at 67% occupancy, $11,000 a month. What's not to like, eh? Reality is now the surrounding STRs are getting between $145 to $300 a night with about 50% occupancy, $6,000 a month at the high end.  

Is it a "Summer and 115 degrees" problem? Maybe, but I think you are right. Overabundance. Ours isn't at the high, high end, but it isn't low end either. And I thnk the market is price sensitive right now. 

We're putting it on the market instead. ;-)

When I checked, there was a drop of about 586 STRs in Phoenix from June 23 to Aug 29

Phoenix Active - 7,872 - June 23, 2023

Phoenix Active - 7,286 - Aug 29, 2023

and similarly in Scottsdale about a 570 decline

Scottsdale Active 7,671 June 23, 2023

Scottsdale Active 7,103 Aug 29, 2023

Were these "summer break" meaning, "who wants to go to Phoenix in the summer, I'll relist in the fall" or are they people getting out of the market entirely? We should know in a month or so.

@Brandon Patrick: I hear you. I bought a property in North Phoenix a few months ago, to make it into an STR. I found a super deal (distressed) off market, where the ARV appraisal was $750,000 and I negotiated to buy it for $525,000. It has a view, a pool and is in a nice place under Shadow Mountain. We've fixed it up. Complete with furnishings. It now values at $780,000. It actually went up in value, in a "down" market.

In January AirDNA said it'd rent for $545 a night at 67% occupancy, $11,000 a month. What's not to like, eh? Reality is now the surrounding STRs are getting between $145 to $300 a night with about 50% occupancy, $6,000 a month at the high end.  

Is it a "Summer and 115 degrees" problem? Maybe, but I think you are right. Overabundance. Ours isn't at the high, high end, but it isn't low end either. And I thnk the market is price sensitive right now. 

We're putting it on the market instead. ;-)

When I checked, there was a drop of about 586 STRs in Phoenix from June 23 to Aug 29

Phoenix Active - 7,872 - June 23, 2023

Phoenix Active - 7,286 - Aug 29, 2023

and similarly in Scottsdale about a 570 decline

Scottsdale Active 7,671 June 23, 2023

Scottsdale Active 7,103 Aug 29, 2023

Were these "summer break" meaning, "who wants to go to Phoenix in the summer, I'll relist in the fall" or are they people getting out of the market entirely? We should know in a month or so.

I am so sorry to hear about the tough year. Thank you for the courage to ask for help. Many investors are going through similar struggles right now, but few are willing to call a spade a spade and admit their challenges. 

Now, let's do some digging.

First, let's talk about the AirBnb properties - are they not meeting your expectations, or are they not performing? That's a big difference. If they aren't meeting expectations, but are still profitable, nothing to do but operate to the best of your ability, get a great place on the market, and keep going. If they aren't profitable, then it might be worth considering selling them. Perhaps that remodel you did added enough value to make it a profitable "flip" even though it was intended to be an AirBnB. 

Second, let's talk about the flipping business. The way you worded this made me think that you completed a flip, doing much of the work yourself as a remodeling contractor? Is that right? If so, then you have a big problem, in that your profits, just after materials, not including labor, are not materializing. That could be bad deals, but I bet it isn't. I bet it's just really hard in Phoenix right now, and you are competing with brand new construction. 

If I'm close, and your skillset is in remodeling, then why not go back to basics, and either go to work for a contractor, or start your own contracting business. If the profits aren't materializing, take a year or two and earn a great living working on someone else's projects. I think it is likely that investors will show you the ropes and their numbers in some cases if you express interest, and when you see a highly repeatable pattern emerge, you can resume your own flipping business. 

You need to rehab cheaper then competition to make money flipping or even doing brrr. My contractor is 60 cents on the dollar and its still tight. People say off market deals blah blah but really those deals get emailed out and bid up to market even if never hit the mls. 

Are you self managing? Thats also pretty mandatory in 2023 to get a decent COC. We have also moved to lower class areas for holds.