All Forum Posts by: Emily And Eric Erickson

Contact Miles Hillyard if you are interested in Rocky Point, Mexico, Phoenix's beach. 

He is based in Tucson and works both markets, is currently building his second home in Rocky Point and knows the area very well

You can message me directly if you can't find him on Google

 Excellent point and I am not even a foodie. Just heard a talking head on the radio today who had moved to Phoenix bemoaning how he missed the food scene in Tucson. 

We currently use Evolve and have been very happy with them. Daily monitoring of rates is not my idea of a fun time and Evolve has a much larger database (they have about 100 properties under management in just Tucson) and so have the advantage of large numbers. 

My basic math for using Evolve is simple. Their charge of 10% is easily justified if they can get me 10% higher price and / or 10% higher occupancy rate and when comparing notes with other STR operators in the area, they often do both so I am not just break even but ahead and I still couldn't tell you how to load a daily rate in to AirBNB and then cross link it to VRBO and .... you get my drift.

They are not perfect, the app is buggy, and customer service response time isn't great but we were 100% booked during our high season which covers a LOT of sins and is fun seeing our STR cover our mortgage month in and month out

@Scott E. super bummed you had a bad experience here in Tucson however sounds like you had an experience that was not that dissimilar to my impressions of Central Phoenix which is a VERY different area versus where you live in Scottsdale (a suburb of Phoenix). The Gem show is hosted in our industrial areas that can handle large crowds and easy access to the highways and definitely lack on the aesthetics

@Adam Berlinberg your initial impressions from when you were here before still hold true today. The main difference between Tucson and Phoenix besides price (Phoenix runs between $100,000 to $200,000 higher for same type of house/neighborhood) is that Phoenix is a true metroplex which it has earned being the 4th largest metro area in the country while Tucson continues to be strong 2nd tier market with just over 1M population. 

Our rent rates have kept pace with our house prices and you can still find long term rentals that generate strong positive cash flow. We have also had a big growth in STR interest as we are more of a laid back resort town than the busy go-go-go you find in Phoenix. Case in point is our access to the mountains, number one rated bike trail in the country (breaking news - Google the Huckleberry Loop) and great balance between snowbirds (retirees who come just for the winter) and growing industries like Raytheon, Caterpillar, Roche, University of Arizona and Davis Monthan Airforce.

We will never win the popularity contest with Phoenix (4 to 1 odds make that tough) but I wouldn't trade my mountain views for access to the I-10/17/201/101/60 highway spaghetti bowl for anything. In fact, focus your search on Phoenix, I don't need the competition. :)

I wrote this recently to a prospective client and thought it was worth sharing to anyone who is looking to know more about the Tucson market

These are per my experience and have no issue if others would like to add to it. Consider it a wiki entry for BP on Tucson STR's. (Now that is quite the acronym soup there)

Central Tucson is older and can have some great style and character options. People like Central Tucson because it is close to the downtown that has a great food and night activity scene and is also close the University of Arizona campus that draws lots of parents and grandparents and people who just like the college campus vibe

West Tucson is a great option for the views, golfing and resort feel. It is close to the downtown area but the majority of area is bigger lots and on the other side of a prominent hill that gives it a more out in the country feel

Foothills is the most exclusive areas with higher price points and lots of upper end shopping and dining

Marana and Oro Valley are the newer "suburban" areas of Tucson that have the laid back walking and biking paths, golf clubs, snow bird / retiree type activities that draw visitors in and then get hooked and eventually buy homes

If you haven't tried Tucson yet, there is quite the variety and with snowbirds leaving, there are plenty of current STR's ready to host you as the summer warms up.

This is a great place to get started and Patrick does a great job of helping set the right structure without being overbearing. Also fun to hear and talk with other investors who are in the same spot in their journey

 That's awesome. Just be careful and not let "safe" become a codeword for inaction. Knowledge without action is just trivia. The power is in the action!

When I speak to successful investors, the number one rule for all of them, in fact, its paramount, is SAFETY. 

Everyone has either had a time when their own money wasn't safe or they know of someone who lost it all. I recently talked to some clients who told me of their dad who lost his entire savings because he didn't understand what he was investing in, he just blindly trusted the "neighborhood expert" who he had known for years. 

The most common response I get is that "my principal is protected" and "I won't LOSE money"

Would you agree that SAFETY is number 1? 

The next, which is a close number 2, is security. This has a different meaning for everyone but the overall idea is the same. Either the asset is secure, the investment is low risk and the likelihood of it blowing up is very small. 

Some even put security above safety. Which of these is number 2 for you? 

Where we start to see the separation of people interested in real estate and flashier, hip investments like Bitcoin or IPO's or Shark Tank opportunities is timing. A true, passive income investor is in it for the long haul and want to place their money once without having to check it's value everyday online. Therefore, requirement number 3 is LONG TERM. 

That is the power of real estate. It is a long term asset that demands to be respected. The longer you hold it, the higher the chance it will pay off. If 10 years seems like a long time, than maybe real estate isn't a good match. 

Rule number four is CASH FLOW. This is where the rehabbers, wholesalers, real estate agents and anyone working real estate as a job get off. Where we stop talking about deals and start talking about the numbers, the rents, the expenses, what can we clear EVERY month. When we start talking about how many houses do we have in portfolio and how many more can we add and even better, payoff. 

Positive cash flow makes that all happen and is where rules 1 and 2 come to fruition. Safety and security are created by a strong cash flowing property. For my clients and my partners, my first question is always, what do the numbers tell you? Sales price, interest rate, rent rates are all just variables that need to be accounted for but ultimately it is the cash flow that drives the investment. 

And bonus rule number five, is just that, a bonus. It is TAX BENEFITS. Many look to real estate first for the tax benefits but these ebb and flow by administration and should not be the basis to make a buy decision. But you can guarantee we will take every benefit that is allotted to us. 

Do these 5 rules resonate with you? Did you add any to your criteria? 

Happy Hunting!

 Agree with Scott. 

The main thing I would add is between step 4 and 5 is to define what your desired outcome - be it return, cash flow etc and how you are going to finance it. Cash is king but if you are like most of us, the first one will be a loan. Talk to a loan officer, get pre-qualed, know what your budget is for down payment, repairs etc. Then what you can write offers on becomes much more clear 

 I agree with Chad. The downsides to big banks is they are more likely to have slower funding times or have more issues that delay funding and they don't understand local requirements. AZ has a unique pre-qual letter that is required to be submitted with each offer and big bank offers tend to just be a cover letter which then get discounted when compared to an offer with a local lender that submits the right form. 

I have 2 great mortgage brokers that I refer the majority of my business, DM if you would like those for the Tucson area. 

Happy hunting!