All Forum Posts by: Emily And Eric Erickson

Tile is the predominant flooring choice in Tucson. Laminate tends to be only in certain rooms (gym, office) that are avoiding what would be traditionally a carpet room like a bedroom. 

Honestly, flooring in general is a cosmetic cost and a much lower priority and small cost percentage to worry about versus the big ticket items like roof, AC, kitchen and bathroom upgrades. 

There are many rehabbers doing tons of deals of Tucson all of the time. It is a great market for it and like many places, getting help with anyone in the trades is tough because there is so much demand for them. 

I believe we have 7 "We Buy Ugly House" franchises in Tucson alone, along with big operators like KMS properties along with many who are just doing 3-4 deals a year. 

So many other variables that are not being addressed in your question, the biggest being price difference which can cover a lot of sins. Is retail shopping center the only kind of investment you are considering? 

Average long term rental rates for single family homes are at $1800 in Tucson. STR rates can peak at 3X that during high season and be 50% higher over entire year. Summers have higher vacancy so depends on what type of pricing model you utilize.

Tucson has a 30 year trend of 4% annual appreciation. That has significantly outperformed the last 2 years but no reason to believe that WORSE case is that it returns back to those levels. With continued migration out of California, amazing weather, strong economy based on a huge retirement community, aerospace, a public university that includes huge medical training and a large biotech startup community, all signs point to another 30 year positive appreciation cycle. 

Reminder of next AZREIA meeting in Tucson is a week from today - Tuesday 3/15. Check out AZREIA.org on their calendar for details. 

You are very welcome. Half of the battle is just knowing it is possible. Where are you at in your journey in investment in real estate?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $50,000

3 bedroom, 2 bath single level in normal lunch pail Joe neighborhood. Rented it to a young family who are excited to be out of the apartment scene.

What made you interested in investing in this type of deal?

This is all about the cash flow and finding nice properties that everyone wants. This one fits that bill.

How did you find this deal and how did you negotiate it?

Professional rehabber got the initial deal, got the cats out, put in new HVAC and new floors and paint and put it on the market. Rehabber overpriced it and it sat on the MLS for more than 30 days. Cash flow numbers still made sense, bought it for under list price (which everyone says you can't do) and then got another $10,000 off when the appraisal came in low.

How did you finance this deal?

30 year, conventional loan with 20% down

How did you add value to the deal?

Offered it as a lease option rental

What was the outcome?

Filled in under a month, tenants have made every payment and are learning how to budget better.

Lessons learned? Challenges?

Appraisals are always interesting...

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $185,000
Cash invested: $37,000

4 bedroom, 3 bath 2 story in quiet neighborhood.

What made you interested in investing in this type of deal?

Interested in proving that I can do a long term rental

How did you find this deal and how did you negotiate it?

Found this property on the MLS

How did you finance this deal?

Conventional loan, 30 year term, 20% down

How did you add value to the deal?

Offered it as a lease option

What was the outcome?

Has been continuously filled for the last 2 years by the same renters

Lessons learned? Challenges?

Anyone can do this!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $245,000
Cash invested: $49,000

Great 4 bedroom, 2 bath home in a great part of town. Needed very little to be rent ready and filled it in less than 3 weeks

What made you interested in investing in this type of deal?

To me, this is the safest and most secure asset class for real estate. It treats real estate the way it was designed - LONG term - and is the perfect blend of strong short term cash flow and long term appreciation.

How did you find this deal and how did you negotiate it?

Bought this off of the MLS. Wife showed it to a couple of first time home buyers who wanted some more "updated" and she came home and said "this is just like all of the other ones you buy. I want to buy one too!" So she used her past commission checks to buy an asset and I couldn't be prouder.

How did you finance this deal?

Conventional 30 year loan with 20% down

How did you add value to the deal?

Offered it as a lease option

What was the outcome?

Filled quickly, stable monthly rent

Lessons learned? Challenges?

I would love to have 30 more of these in my portfolio.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My wife acted as the agent and I am handling the back end management for it.