Hi @Sonit Bhatt, welcome to BP Land!
After getitng all excited writing this "short" pice I thought I might make a blog of it. But here it is: One of the best markets I know of right now is Greater Phoenix. But don't come here, I want it all to myself ;-)
It's feared by many but only due to a lack of knowledge. The proverbial Phoenix out of the ashes is happening - now. It's lining up to become not only one of the top US cities in the next years but will need to be reckoned with by the world as a future world metropolis. I can already see the Spaceport of the amazing spaceship "Enterprise" in the near distance, out in one of our beautiful and magical deserts (if you haven't seen the movie, it's awesome). The South-West is the place to be.
Fundamentals have been and still are strong. According to our last AZREI meeting, their crazy extensive data shows that we have had and continue to have the highest and fastest growth, appreciation and rent rates in the nation - stable for years. Diversity, demographics, companies, jobs, and people moving here for multiple reasons - national and foreign, people and money. Weather, 5 Star living amenities, millennials, seniors, blue and white collar jobs - you name it. Entrepreneur and landlord friendly, the government is keen on becoming the next biggest innovation state and city in the world.
- Intel is dumping $5B (billion) into Chandler.
- Apple has secretly built their next center in Mesa.
- Mesa Airport is the next huge landing pad of the nation.
- A huge logistics company just moved here. The name escapes me ;-)
- This is not a comprehensive list and yes, I like the words awesome, huge and the ;-) emoji.
Downtown Phoenix has and still is attracting droves of Silicon Valley tech companies due to our attractive pricing, taxes, living- and working environment.
Scottsdale has been the world center of HNWI and UHNWI and their luxury-, equestrian-, vintage car-, golf- and art-gatherings in the world. Look up any of these keywords to see Scottsdale events with celebrities from politics, business and entertainment pop up. But don't tell them I told you. They want to keep to themselves ;-)
Tempe and the amazing ASU University environment attracts youth, parents, and money as if there's no tomorrow. This place is buzzing like crazy. It's unstoppable no matter if we are headed towards a correction or not. Tempe and South Scottsdale are poised to become the new epicenter of this amazing, changing, diverse and growing city in which I surely want to be a part of shaping.
Glendale's Grand Canyon University is ASU's powerful real estate, oops, educational competitor and is buying land and buildings faster than you can say: Crap, what the fudge just happened?
Residential Assisted Living (RAL) is taking off NOW.
Self-Storage has and continues to grow, a side effect of more people renting multifamily rather than buying homes.
Multifamily value-add continues to soar due to demand also by millenials and empty-nesters seeking less work on the house and more flexibility to spend money on travel and exeriences rather than stuff that chains them down. for us RE "investors" it's the ticket to syndication, scalability and leverage.
New multifamily buildings with modern concepts with mixed-use living (offices/co-working spaces, fooderies, mixed age and walking distance living with innovative rentable electric scooters, bikes, car chargers, and light rails) all in one beautifully assembled arrangement is what attracts 12000! people to this city every month.
Don't like the CAP rates? I'm really tired of that discussion. They don't matter much as long as you still have cash flow, equity build, inflation security, and appreciation. Why? Because the years of crazy awesome IRRs and CoCs are changing - downward.
Yeah, many "Turn-Key" shops I talk to (nationwide) package deals into portfolios and sing a song of 20% and more IRR to lure. Sure, that's possible if you mix a few low balls (the majority of deals) and one huge winner into the bag. But that's a different game altogether. We're talking investing into funds now.
Low CAP rates don't mean there isn't property to be found and money to be made - it just got harder to obtain. We've been spoiled in the past years - again. Imagine Europe as an example, they don't even have access to any public records, nor does a 1031 exchange exist as we know it. And I'm not even going to get started on the tax break of the century: Opportunity Zones (O-Zones). The world has changed a lot and finance has become increasingly easier, due to our beloved smartphones and internet - borders barely exist anymore - only in our minds.
Information is easily accessible in this country and the world is hungry. Foreign money has been flooding the land of milk & honey because many nations are jumping out of their skin in joy just to save their money from inflation. Whilst we stand at the sidelines whining about if we should invest or not or wait for a consolidation, higher CAP rates, better weather or other miracles from Santa Claus. If we don't invest, foreigners surely are. Every day.
Yes, my contribution is not full of sources and stats, it's not my thing nor my job to list them all up here. Everyone will need to double check any and all the information anyway - the Phoenix Business Journal is great for starters. Common sense and due diligence are called for. The internet is a big place, do your homework. It's all out there.
How does that sound for OOS investing for starters?
Come to Phoenix and I'll give you a tour - it's a magical place. I keep saying how glad I am that we don't have an ocean here - EVERYONE would move here.
Send me a DM, I'd be happy to elaborate on more details. Ken ;-)
