All Forum Posts by: Ryan Swan

Really good job with the furnishings and photography! 

I've also had clients use Furnished Finder

You can have an agent list it for you on the MLS for maximum exposure.

Use SEO/Google to make your listing show up when people search for "Mayo Hospital", or "extended stay phoenix"...something like that 

Hey Nathan welcome to BP and thx for posting! Are you using the VA loan for the primary residence you currently own, or you want to use it to buy a primary residence? I'll be honest...an unfortunate side effect of the super competitive market in Phoenix is that VA financing is seen as less ideal vs conventional financing (for some true reasons and some overblown). So hopefully you already used your VA entitlement to lock down your primary residence. In terms of investing, what strategies or property types are you interested in?

@Scott Davidson tell your agent the best terms you're willing to do...and then go beyond what you just told them. Those are the terms that are winning deals in the Phoenix market right now. It can be frustrating, especially for investors who are buying more for "want" than for "need". But the primary residence buyers who need a home are being ultra aggressive with their offers. 

Here are the types of offers I am seeing being successful right now:

> Above list price (how much is up to you...sometimes you get lucky and the listing agent is forthcoming with information)

> Large EM

> Non-refundable EM after DD period (scary, but it works)

> Full appraisal waiver contingency (also scary, but it works)

> Shorten DD period (5-7 days)

> Ask what the seller wants/needs? Post occupancy? Sure, you can give them up to 60 days after COE and even not charge any rent for that time

> Tell the listing agent that you will take the house As-Is and not ask for any repairs or credits

If you're willing/able to do all of these things, then your 13th offer could be the winner. If you're not, then someone else out there will be doing these things and walk away with the contract. 

Hope this helps!

Quote from @Nick Coons:

Quote from @Ryan Swan:

It's impossible to eliminate time risk, but a 3 month window is about as short as you can get, and thus has a pretty low risk. I don't think there is any strategy out there that would eliminate the risk of a market dip as you described, so I just look at it as something that comes with the territory of short term real estate investing. 

Sure, you could acquire properties at such a discount so that the worst 36 month price decline would still be above what you have into the property. But as you pointed out, that's nearly impossible right now in the hypercompetitive metro Phoenix market. 

Have a couple exit strategies: convert to long term rental, convert to STR, sell as is and make a little money or break even.

To be clear, it's a long-term investment, no short-term investing in what I've described. The risk I'm trying to eliminate isn't the risk of losing value in the investment in the short term (i.e. a decrease in equity), it's the risk of being stuck in a bad position that I can't refi my way out of because of something that happened at the wrong time (like a market dip).

Making it a long-term rental wouldn't really be a conversion since that's the original plan. As I described, if I had a short-term HML that I'm stuck in because of a downturn and I can't refi out of it.. how would you suggest holding onto this property as either a long-term or short-term rental? Selling it would be a good option, one I mentioned in my initial post. :-)

It sounds like having more $ cushion in your pocket (or a larger initial down payment) is the best way to cover potential downturn risk prior to refinancing. 

It's impossible to eliminate time risk, but a 3 month window is about as short as you can get, and thus has a pretty low risk. I don't think there is any strategy out there that would eliminate the risk of a market dip as you described, so I just look at it as something that comes with the territory of short term real estate investing. 

Sure, you could acquire properties at such a discount so that the worst 36 month price decline would still be above what you have into the property. But as you pointed out, that's nearly impossible right now in the hypercompetitive metro Phoenix market. 

Have a couple exit strategies: convert to long term rental, convert to STR, sell as is and make a little money or break even.

"Rossi, who is seeking $75,000 and court costs, claims he has had to put up with party buses, raucous parties with topless women, foul language, noxious odors and thumping music."

Hopefully Mr. Rossi has some photo evidence of the raucous parties with topless women. 

Quote from @Kevin Phu:

Really appreciate all the input from everyone! We lowered the rent to 2k and got a fully qualified family under lease. Searching the tax records to find the property is spot on lol I honestly had no idea it was public posted on the county website until earlier today. 

When we drove the area, it seemed like a C area to us but maybe we missed the other areas or didn't spend enough time in the area. We were only in town for the day but lessons learned and hoping this tenant is headache-free. We feel we did our due diligence and verified employment, references, etc, and are comfortable with them. On the plus side, we'll still be cashflowing after putting aside reserves and if the market continues to appreciate, we'll have an option of selling and getting out. Best case scenario is we got some long term tenants and we just keep it as a buy and hold.

Thank you for all the constructive criticism, it has been very helpful. 

Glad it worked out! I had another thought that might be helpful for you and other investors making similar decisions. I agree that most of Maryvale is probably "C-ish" quality, with a few areas dipping down into the D range. However, not all that long ago $2000/month would be the rent for an "A" class property in metro Phoenix. So with the dramatic rise in rents, landlords like yourself are trying to rent a "C" class property at an "A" class rent and then being surprised when the "C" class tenants can't afford/qualify for that high of a rent (or the tenants' applications have blemishes more typical of that class). Sure, maybe the comps support it, and you did end up eventually finding a tenant (after dropping the price and sitting longer on the market), but this trend is only going to continue and get worse, especially in these lower income areas. 

A 2016 STATE law was passed that says that no city in Arizona can restrict the right to operate a short term rental. This applies to all cities including Phx, Scottsdale, Tempe, Mesa, Chandler, Gilbert, Sedona, Paradise Valley and so on. New bills have added some further rules and restrictions, like making owners apply for a Transaction Tax license, registering their property as a short term rental, and also providing direct contact information in the case of emergencies or complaints. 

Like you mentioned, Scottsdale does have other rules related to occupancy and renting the whole house (not partial). However, I am very active in the Scottsdale STR market and I've never personally heard of these rules being enforced. Frankly I don't even know how they would be. Just look around Airbnb and you'll see dozens of houses that sleep more than the Scottsdale limit.

Hopefully you didn't work with an agent from BiggerPockets that encouraged you to buy a SFH rental in Maryvale?! If you did, please share their name so we can shame them publicly. It's almost like buying a rental under the sea and then being surprised when all of the applicants are fish.

if you have the stomach for this stuff you can retain legal counsel and sue the seller for specific performance (literally making them uphold their part of a valid contract). The attorney would also file lis pendens so the seller couldn't sell it to anyone else.

The keys being:
1) The contract you signed is indeed valid and doesn't violate any AZ law (attorney will review)
2) You're willing to go through this protracted and potentially expensive process