All Forum Posts by: Albert Hasson

People who feel the need to chime in on EVERY post annoy the crap out of me.

My experience here in Arizona is similar to what @Serge S. just posted.  About half of my rentals have pools. They do rent for more money and rent quicker. As far as I know, there is no significant increase in insurance cost.  I even built a pool for a tenant who really wanted one. She agreed to pay an additional $200 per month and sign a two year lease.

I pay $80 per month per pool for weekly service and yes, occasionally there are equipment issues that need to be addressed and paid for. 

These homes are in class A neighborhoods with professionals for tenants. I do not worry about the liability.

@Sam Alpha 

Ever since the big hedge funds like Blackstone, Empire Residential, American Residential, and Colony Residential started buying "massive" amounts of SFH here in Phoenix (and elsewhere) people have been predicting a crash when these homes are sold.

These are the facts, Blackstone and the others own approximately 13,000 SFH's in Maricopa County, AZ (basically the metro Phoenix area). There are at least 910,000 owner occupied homes in Maricopa County so they own approximately 1.4% of the homes in the county. We have about 30,000 homes on the market at any given time. In addition, nearly all of the homes they bought were smaller, starter type homes which are in very high demand here. I suspect EVEN IF all the hedge funds got together and decided to list their homes at the same time (unlikely) that they would be easily absorbed into the active inventory and sold within 90 days. Plus, there's no evidence that their business model is to make a quick buck by selling. All these homes are rented and shooting off cash flow to these hedge funds.

To date, only a dozen or so of the 13,000 homes have been sold.

AND, to answer the topic of this post, IMO the Phoenix market is extremely stable right now with very few new listings being added and demand starting to pick up from a slow 2014.  Definitely no crash here in 2015.  I wouldn't pretend to be smart enough to comment on other markets.

Kevin, thanks for the post and I feel your pain.  I still own three houses I bought back in 2004 and 2005 at near the highs of the bubble here in Phoenix.

One is worth 35k less than I paid, one 45k less and one 55k less!

Only one really cash flows because I was able to lease it as an assisted living facility.  The other two only break even (at best) because I was able to use HARP and refinance them in the 3.5% range 30 yr fixed.  

But as you said, I am wiser for it and just closed on my 29th and 30th property here in Phoenix a few months ago.  

Thanks for the update and continued success.

Glen, where are you seeing the selling by the hedge funds?  

There's no evidence that they are selling here in the Phoenix market.

buying my 4th house in 2009 (post crash) after buying 3 in 2005 (pre crash).  Still underwater on first three but if I didn't buy the 4th I would have probably given up on RE as an investment

As a SFH investor, that's exactly what I'm saying. There is no correlation between interest rates (up or down) with home prices (up or down).

Do rising interest rates decrease the rate of return on a particular real estate investment assuming rents and expenses stay the same?  Yes, of course that is true. 

Provide some credible evidence to back up your assertion.

Arnie, I will have to argue with you about #2 as well.  Please cite some cold hard facts or credible sources to back that up.  In fact, there is no correlation between interest rates and home prices.  Interest rates go up when the economy is performing well.  When the economy is doing well, more people can afford to start families and buy things, like houses, which puts upward pricing pressure on whatever people are buying.  If you don't believe me, Google "correlation between interest rates and home prices". There will be multiple credible articles from many sources.  

It will be very interesting to see if the foreign investors, many of whom rely on oil revenue for their wealth, will continue to bid up Miami real estate prices.

As for your question, I would rather move to SoCal, much better weather.

I predict the Phoenix market will strengthen vs. 2014 with a 5-8% rise in prices overall. No bubble, no crash. Slow and steady. Also predict rental market for SFH will remain strong.

I see the national picture similarly.  

Once the Millenials mature a bit, settle down and have kids I think the housing market will take off.  Don't see that happening this year though.