All Forum Posts by: Travis Holmberg

That is good to know. I would love to learn more about the solar industry in Arizona. We do not have our first property yet but are shooting for a 2019 purchase so focusing on APS specific areas might work for me.  

Hey all,

I live in sunny Phoenix Arizona and have been throwing around an idea in my head I'm wondering if anyone can validate or invalidate for me.

My idea is to install solar panels on my SFH property and rent it out for a long term rental. When you have solar panels on your house, at least in Phoenix, they install a second meter for the energy generated. Then the local power utility allows you to choose different plans revolving around that energy generated. One plan sells the energy generated to them for $.0281 per kWh produced and then you buy back energy for various price points depending on the time of day and year ranging from $.069 to $.24 per kWh consumed.

I've called SRP and they said that they do not allow you to have two separate accounts for each meter, but I'm still not sold on if that person fully understood what I was talking about; since multi-family homes have one family per meter. So ideally I would keep the energy creation meter in my name and the energy consumption meter would be in my tenants name.

If that doesn't work, my thought is to keep the energy bill in my name and then charge my tenants for the energy consumed every month, while taking the energy produced as cash flow.  I'm not sure if that would be creating unforeseen issues though?

Running the numbers on the average solar installation in AZ and the average energy consumption i'd be looking at about $200 a month for a $15,000 solar unit. Then with the federal and state rebates it would pay for itself in around 6 years...not including the average of 4% increase in home value that solar panels provide. If I loosely follow BRRR and find a slightly distressed, but nearly turnkey property where I can invest $5kish in fixes then another $15k in the solar installation and then refinance after, I might be able to utilize that 4% home value increase to further decrease the return time on the solar panels.

I'm wondering what all your thoughts are and what I'm missing?

 Hey not a problem!  Best of luck with your rental!

Hey welcome!! always nice to see another investor from AZ, especially UofA territory!!

"should I be concerned that the seller does not want to make any repairs to the property? "   Absolutely!!! You need to get an inspector to see what kinds of repairs you are talking about.  Would you buy a $50,000 used car with no contingencies with the seller saying they will not agree to any repairs and you having no idea what it needs done?  I would not agree to a deal without a contingency pending inspection results.  Your $205k property might come back crystal clear or might come back with $50k in necessary repairs.

Hey Evan, sorry to hear about losing your job. With only two properties I would highly recommend you focus your time on finding another job at the moment. I know nothing about you but the fact that you have two properties that are rented out currently, which to me tells me you are already in a better place than 99% of the country.  Keep your head up. Your skills are worthwhile and you'll be OK. 

To increase cash flow you can look to management costs on your current properties. Do you hire out lawn care or property management? If so, that'd be the first things I'd look into.  Remember to treat your tenants the way you'd want to be treated. Be fair, but if you're undercharging them and their leases are coming up look into increasing rent reasonably as well. 

If your goal is to achieve positive cash flow AND for input from this forum, we need a bit more info.  AZ is a great market imho, particularly the East Valley area, is that all you're looking for? 

Well, what is your goal? To rent out the property or to keep it vacant until you decide to rent it to yourself? OK, just kidding, a little. You need to decide on a tenant yourself, which may not be 100% up to your standards, or continue waiting and keep it vacant until you find the perfect tenant then manage it yourself, or find a property management company to find a tenant for you which will probably not be up to your standards but will be up to industry standards. I'd argue some cash flow with a property management company is better than no cash flow.