Hi,
I just started with real state investment and I just bought one quite expensive rental property (TH) in SD before I got to know the wonderful BP. No wonder my rental doesn't have a good cashflow. In fact, I doubt there could be any high cash flow property in San Diego.
Anyway, like many Californians, now I started looking into the AZ since it has such high foreclosures.
I just found there are many 3bed/2bath houses built in 2007 are sold just for around $60K. I was looking ate the zip code of 85138 and 85139. Those look quite like a steal to me as I figure that just the construction cost along should be worth that much money.
However, I don't know if they are good deal from the cash flow point of view.
As an example:
The average rent for a 3bed/2ba I found from craiglist is about $750, but I don't know how long it takes to rent it out.
1. Vacancy rate, I guess the vacancy rate could be quite high as the location is about 20 miles away from the Phoenix.
2. High property tax. Even the house is on sale for about the $60K, about $43/SQ, the yearly property tax is still about $1.7K, or $1/SQ. Is it possible to appreal for a lower property tax?
3. High HOA. As those are new built neighbour, the HOA is generally $70/month.
4. ALL cash deal. As the purchase price is small, I don't even know whether banks/brokers are interested in such small loan amout. Or the high loan application cost might justify applying for a loan instead of cash. Then it's against the OPM rule.
So overall it doesn't give good cash flow, but how about appreciation?
Could someone give me any suggestion on whether or not I should still pursue on this path? It would be highly appreciated, especially from people who are familar with those areas (85138,85139),
