All Forum Posts by: Richard Trayer

Welcome to BP. I would be happy to sit for a coffee, maybe lend some knowledge and discuss the market, the opportunities, the challenges and pitfalls. Feel free to reach back to me and we can book a quick get together. 

Hello Julie,
Happy to see you found BP. I am always ready to talk local residential real estate. Feel free to reach out if you like.

Hey Gihan,
The YoY appreciation has cooled, but prices have remained fairly stable. The supply has remained limited throughout 2023 and diminished slightly in the last couple of months. Maricopa County is still a leader nation wide for population growth. There is quite a bit of expected job growth as several Tech-Manufacturing companies build facilities in the valley. 
Cash-Flow is certainly feasible, but Fix and Flip has been running steady (from my perspective). Through 2023, flips of good quality continue to move, but often with longer days on market as compared to years prior. 

Hope this helps.

Feel free to reach out if you like to further discuss SFR investing in the PHOENIX major metro area.

Dean, 

An investor client once told me something I found interesting.

We were out for a couple drinks before catching a ballgame and I had asked him if he had ever considered getting involved in the cannabis cultivation industry... ( it was a tangent in the context of our conversation ).
He responded simply by saying, "Nope... I stay in my lane".
I took him to mean that he enjoys being successful ( I would say extremely successful ) doing what he knows and what he is good at. No need to become distracted with anything else.

In that regard, My lane is SFR investment property in the Phoenix Major Metro area.
I have been involved in this market for the past 8 years, as a Senior Acquisition Associate - Wholesale RE Agent, Hard Money Loan Originator, Design/Remodel Consultant & Investor Buyer (may seem like a lot of lanes... but its all one BP type lane).

PHOENIX is my market.. so I am ill equipped to inform you about cashflow in any other markets.
Here, I have a TownHouse in Tempe that nets $525/mo and has doubled in equity since purchased ( March 2020 ). My wife owns a starter home SFR detached in Gilbert that I remodeled last year and now nets $685/mo and also has 6 figure equity.

It would be hard to replicate this today given the current price/interest rate circumstances in our market... but the deals are out there. 
What you should take into consideration, in ANY MARKET, is that you make all your profit in the Acquisition part of any deal. "Buy it Right". Right time, right price, right condition to justify value, etc.  

If I were starting over from where you are now, I would be listening to Nickolas L. Get the degree and a "regular" w2 job that pays you right. Continue your research in Real Estate investing and talk to everybody about your passion for Real Estate. You will likely come across other investors (network) and may come across a "motivated seller" (opportunity) simply through open, polite conversation.
Get yourself positioned (stack of cash & pre-approved to borrow) to jump on the good deal when your time comes. A House Hack is the ideal jumpstart for a young investor. My first house was a SFR 3/2/2 that I hacked by renting room and doing a live-in remodel. If you could do a duplex-triplex-quad... I would definitely recommend that. 

@Dean Halpin

Good for you finding BP. Even better that you evolved, by 21, to the mindset of creating wealth. 

First to understand is that this path you have chosen is still work, just like anything else you might choose to do.

For a sports reference: Before you can score the touchdown (travel the world) you have to catch the ball, run down the field, and avoid getting tackled or pushed OB. None of it is possible until you actually get in the game (which requires years of practice and study and sacrifice). 

I don't say any of this to put you off... just to prepare you for what is required to actually execute on the goal. Read the books/blogs/articles to build your understanding (study the trade). Talk with all kinds of others about your passion (practice your pitch). Listen to those who have already achieved in order to further your understanding from their experiences (practice networking, study examples).  
Start at the beginning, be productive using the resources you have in abundance, create value for others while building your accounts.

Also, I second what @Nicholas L. has instructed. He is telling you exactly how to start at the beginning.

For a building reference: Every magnificent structure started first by digging down... to prepare the site for a solid foundation... upon which the structure would be built. 

I am happy to correspond and share whatever else I might be able to offer. Best of luck!

“It does not matter how slowly you go as long as you do not stop.”
― Confucius

Hello Eva,
Hope you find BP a good resource. I would be happy to act as a local resource as well. Let me know if you would like to connect and discuss the local market or any other residential investment topics. Stay cool out there!

Hi Divya,

I think they say Maricopa County is the fastest growing in the Nation. I could be biased though. 

Taiwan Semi-Conductor in the North Valley is going to bring a lot of jobs this way. Intel in the East Valley is expanding.
Lucid Motors is supposed to be doing something in AZ... and Bill Gates is planning his "Future City" development somewhere out there between where You and I reside. 

Investment Info:

Townhouse buy & hold investment.

Purchase price: $188,200
Cash invested: $28,700

Tempe Townhouse
1700sf 3/2.5/2 (originally)
Prior owners converted garage for additional 400sf space.

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

Honestly... I wasn't.

I was in the middle of a Large Custom Remodel Project for my mom. It was going a little sideways with the contractor and I was stressed. But, this deal came (Pocket List) through a good contact of mine and I wanted to be sure to perform. This was the early days of Covid-19 and everybody (Investor Buyer(s)) were frozen... so we couldn't wholesale it through the brokerage at first.

I jumped on a grenade and landed in a bed of roses.

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

Through an agent contact of mine. We agreed on a price, but renegotiated a bit due to plumbing concerns.

How did you finance this deal?

I used Hard Money Loan w/ a Construction Escrow. 6 month term (balloon), 10% interest only, 2points origination

How did you add value to the deal?

It was a "Refresh" type job.
I cleaned it up and added some landscape to the small, barren back yard. I updated the two upstairs bathrooms and added new carpeting to the bedrooms. Repainted the entire interior and updated fans and fixtures.

What was the outcome?

I had it turned around and leased in 2 months. Tenant has renewed every year since.
Reimbursed $10k of my out of pocket from the Construction Escrow of HML. Refinanced $200k at <5% and doubled my equity.
Property is now worth $400-$430k

Lessons learned? Challenges?

Sometimes, even when it's scary, you just have to jump.
Managing multiple projects is not all that bad, and can help you diversify

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $372,500
Cash invested: $240,000

This was a custom remodel for Mom. She now owns a SINGLE level 4bed / 2bath / 2car garage... with a nice low maintenance yard and a separate entry for her piano studio. Property comps at around $800,000. We refinanced a mortgage at the right time to put her in a secure and manageable position.

-Leveraged with HML and paid for reno out of pocket.
- $240k cash invested,
- refinanced $250k 30yr term @ 3%
- Property is $800k value today

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

This property came through my brokerage and as they say... it was all about location.
Less than a mile from the home where Mom was living and had raised the family, nursed our Dad until his death ( F-@& cancer), and built her community of peers. This property was an ideal opportunity to downsize/transition from 3000sf 5/3/3 Tri-Level.

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

This property came through my brokerage (NetWorth Realty of Phoenix) As soon as my colleague brought this one up, I jumped on it.

How did you finance this deal?

I used a Hard Money Loan @ 10% and 2points origination

How did you add value to the deal?

Full gut remodel. Full Redesign
Kitchen, Master Bath & Closet, Laundry/Utility. I reworked 3 of 4 bedrooms
(beside the Master, bedroom 2 converted to a Piano Studio with separate ext. entry, bedroom 4 to a Playroom with direct ext, access to side yard - playground)
Eliminated soffits. Updated hVAC lines (insulated flex duct), built a raised Garden (later adding a shed pulled from an other project 5 doors away that I acquired and sold Wholesale).

What was the outcome?

Mom will be comfortable for the rest of her years.
She can work from home, host family get togethers, and avoid taking stairs every day.
Also..
Split Floor plan 4/2/2

Lessons learned? Challenges?

Do your best to find good qualified help. If you find a trusted Project Manager, take good care of them.

I was let down by the one I initially trusted to be on the job daily. He wasn't there frequently enough, left a solo work hand to do the work most days, and refused to bring on more of a crew. The project took much longer than expected, causing holding costs to factor double what they should have. It was tough to kick him from the job. He was a family friend, a pallbearer for Dad.

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

I am a Real Estate Professional and I carry an MLO license... others could work with me.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $372,500
Cash invested: $240,000

This was a custom remodel for Mom. She now owns a SINGLE level 4bed / 2bath / 2car garage... with a nice low maintenance yard and a separate entry for her piano studio. Property comps at around $800,000. We refinanced a mortgage at the right time to put her in a secure and manageable position.

-Leveraged with HML and paid for reno out of pocket.
- $240k cash invested,
- refinanced $250k 30yr term @ 3%
- Property is $800k value today

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

This property came through my brokerage and as they say... it was all about location.
Less than a mile from the home where Mom was living and had raised the family, nursed our Dad until his death ( F-@& cancer), and built her community of peers. This property was an ideal opportunity to downsize/transition from 3000sf 5/3/3 Tri-Level.

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

This property came through my brokerage (NetWorth Realty of Phoenix) As soon as my colleague brought this one up, I jumped on it.

How did you finance this deal?

I used a Hard Money Loan @ 10% and 2points origination

How did you add value to the deal?

Executed full gut remodel. Six Figure Project. Full Redesign
Kitchen, Master Bath & Closet, Laundry/Utility, I reworked 3 of 4 bedrooms adding single light exterior doors to two.
(bedroom 2 converted to a Piano Studio with separate entry, bedroom 4 to a Playroom with direct access to side yard playground)
Eliminated several soffits. Updated hVAC lines (insulated flex duct), built a raised Garden (later adding a shed pulled from an other project 5 doors away that I acquired and sold Wholesale).

What was the outcome?

Mom will be comfortable for the rest of her years.
She can work from home, host family get togethers, and avoid taking stairs every day.
Also..
Split Floor plan 4/2/2

Lessons learned? Challenges?

Do your best to find good qualified help. If you find a trusted Project Manager, take good care of them.

I was let down by the one I initially trusted to be on the job daily. He wasn't there frequently enough, left a solo work hand to do the work most days, and refused to bring on more of a crew. The project took much longer than expected, causing holding costs to factor double what they should have. It was tough to kick him from the job. He was a family friend, a pallbearer for Dad.

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

I am a Real Estate Professional and I carry an MLO license... others could work with me.