All Forum Posts by: Julie Dunlap

@Jeremy Mabry well I went to ASU so I have some pretty strong opinions about Tucson... but seriously... I see them as only getting stronger right now. Both the rental and resale markets are going up almost as quickly as the Phoenix market. You may break even down the road but with the information you’ve shared I’d probably recommend selling during this spring market. 

@Darryl Holmes it was a SFH. I got the owner's permission to rent through Airbnb, essentially the Airbnb Arbitrage model now. It was a 3 bedroom so I started by renting 2 rooms, then I turned the den into a 4th. Eventually I slept at a friends house and rented my room too. $1200/mo rental payment and easily $4-5k/mo Airbnb income depending on the time of the year. I took those profits and bought my own house as soon as I could.

Many hosts out here are people who aren’t running their STRs as a business (watching profits, realizing true carrying costs, etc). The TPT tax is a good current example, many hosts weren’t even aware they were supposed to be paying taxes on their Airbnbs. Pricing is sporadic for most of them, they aren’t picking properties that have solid numbers, and they’re not thinking about possible exit strategies if the market were to change for STRs.  

Abdiwahid I'd be happy to connect and answer any questions you may have about BRRRR and the Phoenix market. I'm an agent who actively invests, please feel free to check out my deals on my profile. I'm currently in the middle of a BRRRR in Mesa and plan on buying 4-6 more this calendar year.

Scottsdale is WAY over saturated right now, I personally won't even bother with that market. My best performing STR is right by the Phoenix airport. There are some pretty serious talks of regulations going on right now and a lot of hosts are very upset about the TPT tax laws in particular. That all being said, my STRs are all cash flowing very nicely even with the additional costs and labor that they require. I've purchased one in the last month to convert into an STR and I've been actively writing offers for another one. It could be beneficial that some of these regulations coming down the road may weed out the owners who aren't operating their Airbnbs as a business.

You've gotten a couple good answers on 1 and 2 so I'm going to focus on 3. Personally I believe house hacking is the best way to do it if you'd like to have a full career outside of real estate. I started house hacking (in a rental house at first) in 2015 as a teacher. It worked. It actually worked so well that I was able to leave my full time job after just 3 years of doing it. I'm full time in REI now because it's incredibly addictive but if I wanted I could live a modest life just from my house hacks alone and never have to work again. The scalability isn't huge but it doesn't really need to be if you're looking to stay in your current career and just use RE as a passive investment vehicle.

I'd personally recommend doing a small deal or two just to get a basic understanding of what you're doing before going bigger. Flip a fourplex and do what you feel comfortable with, get help with the rest. Then when you're hiring contractors, property managers, etc you know what to expect from them and it'll keep you from getting taken advantage of. This would also give you some time to focus in on a niche that you would like to follow. Are you someone who likes to be very active in the day to day stuff? If so, maybe get heavily into the flipping or set up a STR company. If not, maybe look into apartment syndications or more passive avenues.

Also, with that kind of money I’d recommend finding your “why” and what your ultimate end goal is. Take things slow and make sure you’re not getting taken advantage of by people who just want your money or who are not as knowledgeable as they appear. 

Hope that helps a little!

@Jeremy Mabry the numbers don’t make sense to hold onto it. You’re at a negative cash flow. Since it was purchased at a rough time and held on only to not lose money I’d say that this is your time to break even on your losses and put your time into something that cash flows and has good numbers. 

Personally I wouldn’t hold onto it myself. 

Welcome Janea! I’m an investor in the Phoenix area too. Lmk if you need anything.