All Forum Posts by: George Mevawala

@Jared Smith the entire valley has been a great place to invest over the last several years and is continuing to rise in healthy appreciation and a popular USA city for people to move to take advantage of the many job opportunities and low property taxes our city has to offer!

I am very fortunate that I have had the opportunity to invest in over a dozen properties in the Phoenix market that have been able to sustain very high (over 20% annual cash on cash returns), as well as add value to many properties and seen some properties surpass 50-65% appreciation. I’ve been very pleased with the outcome!

Investment Info:

Single-family residence buy & hold investment in Scottsdale.

Purchase price: $183,000
Cash invested: $79,000

Value add townhouse which was acquired for 183k and I put down 25% (45k) for the down payment, and invested 30k into the remodel and furnishing. Current market value is at 255k. We are sitting on around 20% appreciation since remodeling the property in just under 3 months.

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

I target properties that I know are in strategic location with upside potential.

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

It came on the MLS, and I went and toured it within hours of it coming on the market. I negotiated the deal myself.

How did you finance this deal?

Conventional financing with 25% down.

How did you add value to the deal?

New floors, new shaker cabinets, new granite countertops, new backsplash in kitchen, new sinks, new toilets, new faucets, new wall backsplash tile in both bathrooms, new walk in tiled shower, LED light up mirrors, new paint, new electrical outlets, new paint, new windows, new double french doors, new pavers on the outside patio.

What was the outcome?

Based on a recent comp that just sold a few doors down, we are sitting on roughly 42k appreciation, and have it rented out with very strong cash flow.

Lessons learned? Challenges?

Always be patient with your contractors, and know that it will almost always end up taking longer to finish a project than anticipated. We went about 5 weeks over our deadline, but patience is a virtue with real estate.

@Brock Mogensen 100% agree. This is the time to start picking up some good value add opportunities in a pull back.

@Andrew Smith in the Phoenix market. We are one of the fastest growing rental markets in the nation right now with very strong cash flow, a very healthy economy and very low property taxes. With 250 people moving to Phoenix a day, there is definitely lots of potential out here. Although we have been averaging 7-9% annual appreciation a year for the last several years ( some might wonder when is it going to slow down), there are still some really good buys in certain up and coming areas. I managed to get several of my income properties when the market pulled back, but I am still acquiring at least 3-4 value add properties a year out here. I do not believe in "timing", but rather finding the right property that I can add value too.

@R.J. Napolitano I am a buyers agent with a fleet of over 20 STR (AIRBNB) properties in the Scottsdale market that specializes in short term rentals. My properties average out over an 89% occupancy each year. Feel free to reach out if you have any questions at all. I am also a Superhost with over 500+ 5 star reviews on AIRBNB.

@Ben Leybovich congrats! I am bullish as well for the future of Phoenix. We have lots of indicators in our corner right now that we are going to continue to thrive as one of the top growing cities in the nation.

@Mark Page it is never too late. Congrats on getting the first! I have a fleet of 23 STR properties and it was not that long ago that I was able to acquire my first.. You basically need patience, a marketing strategy, great communication, and the sky is the limit.

The biggest misconception with STR properties is that managing them is going to be a breeze. It is much more than just firing up the properties on the booking platforms and sitting back and collecting the deposits. There is an entire system that goes into place, and it will take you some time to customize what works best for you, and that is probably the best learning curve that I am thankful for.

I still remember designing and furnishing my first unit and how much pride and excitment went into it.... I have now designed to many to count, and there will always be a feeling of satisfaction that comes with making the next one better than the last to satisfy your future guests.

Each year as revenues go up, I always ask myself "what can I do better"? Also, how can I add to the hospitality aspect ( one of the most important things involved in short term rental properties). Also always focus on getting more quality bookings rather than just filling the dates. That is a piece of advice that I always like to give.. It is not a race to fill the calendars, but rather get quality bookings which turn into repeat guests and also secure the 5 star reviews.

Reviews are everything in this business, and they will take the trials and tribulations to keep every guest happy. I am always available if you have any further questions and good luck buddy! You are already on the right track to financial freedom.

Regards

@John D. you must be doing something right! Congrats on your success and I will have to check out the area, thanks for your insight.

Impressive numbers, just curious what are your year round attractions in La Quinta? Being roughly 20 miles from Palm Springs and 8 miles from Coachella what are your seasonal or big events each year? 

I am assuming you crush on Coachella festival every April, just not the first place I think of when wanting to plan a Cali trip. But sometimes the hidden gem areas can be the top performing STR markets. I have a fleet of 23 STR properties and always like to examine other lucrative markets as possiblities to venture into.