Hey David and Arizonians, Happy New Years!
In response to David's questions from several posts up:
1. I did do a zip overview, had fastest and slowest appreciating zips, but chose the entry price over the zip in the end. In this particular property, the $ is in the sweat equity fixer portion to refi out at comps, rather than appreciation, with renters holding up the fort. I could have put the $$ into some Chandler/Scottsdale area which had 18% appreciation the past year, but I don't know where that would go next year, and it would still have to be a deal going in. The current property was not a favorite, but on my list of drive by's, and I chose it after I drove by it, not in the office.
2. Renting; I've not done it yet in Phoenix. I'm still fixing it as we speak. Front tenants are moving out this month. I'm budgeted for that so I don't care; it's faster to rehab without people inside. The entry price allows me to go below market rents for 1/1's in the area, but comping on CL, rent. com and apartment. com show me $400 per room would be below, and $450-500 would be market. Obviously, a lower price or a couple months rent discount would fill it faster; I'll cross that bridge when I get to it.
3. If you wanted appreciation, that's different and I have not been here long enough to know the area. I do suspect the FED will slowly raise rates, and because of the Dodd/Frank Act the economy is stable, so after an 18% appreciation year in Chandler/Scottsdale, the prices of houses in the area should gain a little more but not another 18%. I have 2 good realtors and a contacts list full of crappy ones, PM or email me for their names.
I did look at new KB's for <300k and <180k in Chandler and Goodyear. I would have got one of those if I wanted to just do appreciation; buy with market level upgrades of 30k added onto base sales price to resell to an average buyer in a year. And nice developments in every direction when driven in a gradually widening circumference, I was drooling. There are also <250k houses with 3 car garages, and pools in Chandler which is very nice, nicer than Rancho Cucamonga; I glance at those for a friend, but am not a particularly focused on them at the moment. I'm currently lost in Home Depot trying to find parts to "lego" my place back together to battle "Super El Nino."
The place I bought, I would not mind moving into, but I don't have to, so that's my back up plan if all else fails. There were other deals I had on radar that actually had good numbers, perhaps better, but I did not want to move into them, so the exit strategy was compromised, and I'm not a pro, so I need the back up plan to allow for mistakes and oversights.
I think you'd probably be better off after living in the area for a month or 2, because my perception changed, and learning the area and talking to some local agents or investors changed what I thought about Phoenix before I got here; in a progressive way of understanding, not necessarily good or bad. I actually purchased the current property from an owner in Chino, Ca, who could not manage it from afar.
I wish you the best, steel sharpens steel, and that's why I like this BP site. With Ca house buying power, you could get a 10+ unit in AZ, it's all a matter of experience. I can't wait till next year, so keep us posted with the development of your plan.
