All Forum Posts by: Account Closed

@Nate T. Thank you for your information! If you don't mind me asking - what would be a good model to follow in Phoenix? If the buy and hold doesn't get to that 1% level, is cash flowing a property then unrealistic? 

Thanks

Hello Mr. McVinua, nice to hear from you and thanks for the quick reply! 

I'm very interested in finding a dog of a house but have not had much luck. Although I've only been looking on Zillow and loopnet. 

I know this is a very limited scope but it looks like there isn't much available in the Chandler / Tempe area that would even meet a 1% deal after a renovation. 

I could be missing a piece of this puzzle, maybe this is where to find properties at a cheaper price or find someone motivated to sell?

I know it's being done in Phoenix, so It's just gaining a better understanding of the model in this sellers market! 

Thanks!

Wow. I love all the ideas you've been throwing out @Dan Bryskin I'm in the process of analyzing my area to jump on my first investment as an owner occupied deal or house hack. As I move forward building a portfolio I am wary about becoming over leveraged in the event that there is a correction in the near future. I love the different strategies for keeping a strong portfolio.. I am taking notes. 

One question: I see that in your example prop #2 is ~1% deal. I'm getting hung up here in my own analysis..It looks like in my area, the days of the 2% deal are over. 

At the same time, in the book on rental properties by Mr. Brandon Turner himself he mentions he will almost never cash flow form a 1% deal. 

So is it that  the 1% or 2% rule of thumb is very area dependent? 

Thanks!

Hi all, 

I'm still relatively new on the forums - trying to learn as much about my market as possible. (I'll be moving to the Chandler area in May and looking to buy in Chandler / Tempe)

I'm wondering how everyone in this area is adjusting seeing that its near impossible to find a 2% deal. Are the days of buy and holds over if you want to fit that 2% model?

I've looked into tax liens, foreclosures, auctions but I wont have the capital to fund something for 100% of the home price. 

Ideally I would use an FHA 203k loan to move on something, contract the renovation and live in the property for a few years then down the road turn it into an investment.

I would love to hear your insight on how to find value in this market!

Thanks, 

Hey @Steve James I'm just starting out and also looking in the Phoenix area (mostly Chandler, Tempe, Gilbert) I'll be moving to Chandler in 2 months working in the semiconductor industry. Sorry I don't have better advice, I too haven't found anything near 2% and am feeling a little wary to move on anything in the near future. 

I see this is a bit of an old post but I'd like to open it back up, maybe strategies have changed in the last year in your opinion.

I'm always happy to share what I'm looking at with my limited experience!

As a newbie its nice to see so many people willing to help for us starting out! I've only posted once here, actively listen to the podcast and reading a lot. I look forward to connecting with more people here in the future! 

I am wary though of asking too much without adding my own value, I can see where this would get a little frustrating. 

@Erik Larson Thanks for the info - Well I start a job the first of June so I'm on the boarder of living with a family member for a short time while I search. On the other hand I can commit to a year long lease and spend that time learning the Chandler / Tempe market and look for a great deal. 

I like the idea of the Chandler 3Br for aroun 175k though thats typically what I'm looking at, maybe a bit more expensive in Tempe. 

@Doug McVinua Now that both of you and Erik mention certain parts of Chandler growing in popularity and projected demand based on the Intel expansion I am looking around in that area as well.  I don't have any remodeling skills but would be interested in learning for sweat equity and also to build an understanding so when I look at future properties I would be able to ball park how much different renovations would cost (this would also come with experience contracting work out when the times comes).

What do you think about a 3Br 2 Ba in Chandler at 175k?

If I'm lucky that may only only put me around 1%. From what I see on zillow a home that sells for 250k rents for 1800 as @Erik Larson mentioned. These numbers don't make for a great investment property, but does this out weight the loss of throwing my money away towards rent in your opinion?

I would plan to live in this place to 3-5 years. In the meantime buying purely investment properties.

Erik,thank you for the info on multi-family. I think I would prefer to stay out of areas with higher crime - I would have a higher tolerance for crime / risky neighborhoods if I was doing this alone but having my girlfriend stay with me I don't think we would be comfortable. I'm leaning towards a single family in the Chandler area, maybe even in along the lines of the older homes in Chandler that you like for flipping. Whats your opinion on moving on something around 175k? as I mentioned above.

I would love to be in contact with your broker. If you would like to direct message me with more details that would be great. Thank you.

@Doug McVinua - Thank you! I'll start looking around for a single family. A good way to approach this could be buying something cheaper and plan to contract / learn to renovate over the next 2 - 3 years. That way I could shoot for a 2% deal with forced appreciation. Whats your take on 2% vs a 1% deal?  It looks like to realistically shoot for 2%, I would be looking to purchase for 100k - 125k which looks like quite a low ball offer for whats listed on zillow for a 3br in Tempe/Chanlder. I could always get lucky and find a big time fixer-upper and put money into the renovation over 2-3 years.

To note - Erik mentioned that $2000 is tough to get for a 4Bd 2 Ba in the Chandler area. I may choose Tempe over Chandler. These properties are closer to ASU and with college students I know I can rent per bedroom and get more for a property.

Also thank you on your take on the housing market in Phoenix. I'm actively looking to expand my understanding so overtime I can be confident about expanding my investments. 

@Erik Larson - Thank you as well. I like your idea about looking at other lenders. Could you recommend some private lenders to work with in the Phoenix area? Would they still be able to work with these new home owner incentive programs where there is little or no money down? It could be smarter to save the FHA for buying a 4plex down the road since that 3.5 would be utilized more effectively. Also, thank you for sharing your experience renting out down the road. That is something I've never done so any advice is much appreciated.

Hi, 

I've been listening to BP for about a year now, following in the footsteps of almost everyone and picked up Rich Dad Poor Dad (but first time poster! ) So, for the most part I've just been trying to arm myself with knowledge especially since we are probably looking at near peak market. 

I would love some advice on my current status. I will be graduating in May and taking on a full time position as an engineer at a semiconductor company in Chandler AZ. I'm in the early stages of signing a lease for an apartment at 1042 a month. (I know this is very expensive). If I had my choice I would be in something much less expensive but I have a girlfriend in Chandler who would not be too happy ;)

I just found this deal so if some numbers are a little hand wavey I apologize.

I found a duplex listed at 300k. The 2nd unit is technically a guest house with an exterior entrance which I would intend to rent out. Its near a college campus so I estimate the studio would rent for 

$700 - $1000 

SO following the 2% marker this falls apart - unless I could buy this prop at 1/3 what its listed at. 

100k @ 2% = $2000. I think 2k a month would be reasonable.  I only add this because down the road in 5 years I may move and I want to make sure the numbers are right. 

So I understand that this does not hold up - but should I still consider making a low offer (~200k) ?

The reason I ask is because I see the following upsides: renter income, I'm paying into something I own, and I anticipate that I would pay less monthly than I  would for the apartment.

Also, 

I came across some AZ incentive programs that bundle a down payment into the mortgage so there are no up front costs AND programs that wave down payments: 

http://www.arizonadownpaymentassistance.com/down-p...

So, If the down payment was waved or bundled, I wouldn't have capital tied up in the property in the event we are at peak market and this property does not appreciate and I can't use the BRRR method.

Last thing I'd like to note - I realize how 2005 RE bubble this incentive program sounds and it scares me as well - should I just hang on the side lines and anticipate housing to drop?

Thanks, 

Dalton