All Forum Posts by: Wes Blackwell

@Joe M.

https://www.nahbclassic.org/generic.aspx?sectionID=734&genericContentID=263243

Long story short, we're way under-producing new housing units to meet up with demand. In 2005 the US had a population of 296 million, now it's 328 million or more in less than 15 years. It's projected to be as high as 438 million by the year 2050, and we're only building like 1.5-2 million new homes per year. Won't be able to keep up with demand. 

And while boomers may be downsizing, they're often taking the proceeds from the sale and simply buying a different home. So it's not like they just go live in a RV or something the rest of their life.

As for Arizona and Phoenix in particular, we're a huge destination for both boomers and millennials so I don't see inventory increasing because of the older generation retiring. 

@Belen Walker

This is a lot like the limitation on the number of unrelated residents living in the same property. Most cities like Phoenix have a limit for this, but that doesn't stop investors from buying single family homes in college towns and far exceeding that number by renting rooms to students.

*cough cough here's looking at you Tempe cough cough*

So basically it's buyer beware. Don't bet your retirement on purchasing this property and renting out the ADU, as things could certainly change with new laws or heavier enforcement of existing laws.

But in all likelihood the city will probably become more lenient on these laws over time as the population grows simply to accommodate the retiring boomer population and ever-growing demand for affordable housing.

@Matthew Jenks

Most of the Phoenix Metro's multifamily is going to be located in the central Phoenix area, with a decent amount also available in Glendale, Mesa and Tempe. 

The other suburbs like Chandler, Gilbert, Surprise, Peoria, etc. are all mostly single family homes, so you won't find as much opportunity there.

While the cities do differ from one another to some degree, we're all a part of the same metro so you can probably use analysis for the Phoenix metro in general analyze the area. 

Housing is needed everywhere, so probably the best thing to question is the local violent crime rate for the property you are considering. Every city has good and bad areas when it comes to crime, and so no matter where you look you'll probably want to avoid the area where three people were murdered last week. Search the local crime maps for that info.

Is there a particular area of town you're wondering about or looking in?

@Drew Hittner

I wouldn't allow him to do it. Why allow a tenant to make repairs they don't have to? That could open a can of worms and have them make unknown damage to the property behind the walls because the windows were installed incorrectly or they took shortcuts. 

Plus I don't think any area of Phoenix is that bad that you'd need bulletproof glass, unless you are doing something that would warrant bullets being fired at your house lol.

@William Tomp

Reading your post, I'm not sure why you need a partner to invest in Phoenix multifamily in the first place.

You've got money.

You've got time.

You've got experience.

So what's lacking?

Single family isn't multifamily, so perhaps someone with some syndication experience and managing a commercial multifamily project might be ideal. But besides that it seems to me you've got a pretty good hold on things.

Most people who post on these forums are missing a major piece of the puzzle (time, money, credit, experience, etc.) But you don't seem to be. 

@Luis Pineda

Here's a plug for Phoenix, Arizona that takes into consideration some of the criteria others mentioned above:

 Here are the four statistics you'll want to consider when researching prospective markets:

1) Job Growth

2) Population Growth

3) Migration

4) Housing Market

And here are some relevant articles about Phoenix to save you some time:

-- Phoenix leads US Counties in Job Growth, New Data Shows

-- Phoenix leads the US in Population Growth, New Census Data Shows

-- Phoenix is the #1 Migration Destination

-- Phoenix is Expected to be Among the Top 5 Housing Markets in 2020

I can practically guarantee none of the other markets you're considering are going to be as strong on all factors as the Phoenix metro area is. But perhaps pricing, location, etc. may sway you elsewhere.

@Hunter Murphy

Remember that the goal is to build wealth slowly, not get rich quick overnight. It make take you a few properties to get up to that the $1,000/month number.

Short term rentals are kind of out of the question at the moment, as the Coronavirus has mostly crushed that industry with everyone staying at home and being afraid to travel. I've seen multiple posts from investors in the Phoenix area really taking a hit in lost reservations. So for now focus on long-term, more traditional buy-and-hold strategies.

If you're able to, house-hacking is a great way to get started as it lowers your down payment requirement for your first property and gives you "cash flow" by reducing your mortgage payment obligation due to the rents you receive from the tenants. 

For example, let's say you bought a 4 bedroom house with 5% down for $300k. With a 4% interest rate your monthly PITI payment would be roughly $1968/mo.

If you rented out 3 of the rooms for $500/mo each, it would only cost you about $500/mo to own the property, and that may be cheaper than your total housing expenses now depending on your situation.

Keep exploring and look into all your options, and eventually you'll discover the right thing for you to consider.

@Thiyagarajan Madhavan

Here are some thoughts I shared on how the coronavirus may affect the Phoenix housing marketing specifically. Hope it helps to put you in the right direction:

https://www.biggerpockets.com/forums/546/topics/820704-arizona-governor-issues-statewide-stay-at-home-order

The challenge is that we don't have enough data yet to really look at the numbers and make any meaningful predictions or summations of the effect so far.

There will likely be an increase in supply for the coming months in the Phoenix market, as the Covid crisis will undoubtedly push some homeowners in foreclosure, force some AirBnb investors to sell off some properties, and kick the iBuyers out of the market for now and force sellers to sell via traditional means if needed.

It may be reasonable to expect a short-term recession (and I mean super short term, as everyone is hoping this will be over in 60-90 days), but it's not reasonable to expect a massive depreciation of home values or another foreclosure crisis like in 2008.

Home prices in the Phoenix market have risen consistently since 2013 (like most of the country), but not outside the affordability range of average home buyer with a median home price of $265k or so.

If the majority of average buyers can weather the storm with government aid and such, then we should be ok and bounce back fairly quickly once the pandemic subsides. 

https://www.azcentral.com/story/news/local/arizona-health/2020/03/30/arizona-coronavirus-stay-home-order-issued-gov-doug-ducey/5088109002/

"Gov. Doug Ducey on Monday issued a statewide "stay-at-home" order to stop the spread of new coronavirus, barring Arizonans from leaving their residences except for food, medicine and other essentials.

The order will take effect at the close of business Tuesday.

"Our goal here is to protect the lives of those we love most and to ensure the health care system has the capacity to provide them with the care and comfort they deserve," the Republican leader said at an afternoon press briefing."

Arizona follows California's footsteps in issuing a statewide stay-at-home order to help prevent the further spread of the Coronavirus.

HOW WILL THIS IMPACT THE PHOENIX HOUSING MARKET?

A couple of weeks ago when the virus was first making national headlines, it didn't seem to have much of an impact at all. I was still getting 5-6 people per day through my open houses. And besides less shaking of hands, there didn't seem to be much impact on my business. 

But now that homebuyers are being told to stay home, that may throw a wrench in the purchase and sale of housing statewide.

Luckily, Realtors have had a couple weeks to adjust while people were still out and about, and more virtual showings and meetings through Facetime were happening than ever before. 

But this stay-at-home order not only impacts how many people show up to open houses, but also affects the people being told to stay home from their jobs, and the effect that has on the economy nationwide.

MY HOPES FOR THE PHOENIX HOUSING MARKET:

My hope is that within 30-60 days the Coronavirus hysteria will be over, and things will quickly return back to normal. But we'll have to wait and see what happens and how this stay at home order affects the local economy.

The upper price-range of homes may feel the impact the hardest, as buyers and sellers of luxury homes are usually business owners with part of their portfolio tied up in other assets that are feeling a greater impact.

The housing demand for the bread-and-butter price (sub $300k) should hopefully only be stalled or delayed, and ideally we'll see some pent up demand be unleashed in the summer and fall if things get back to normal. 

But, it's still a little early to tell what is going to be the lasting impact, and this new stay at home order for Arizona is definitely more negative than I had hoped for. 

For now, keep your finger on the pulse and get info from various sources to make your predictions. No one has a crystal ball, and everyone is making their best educated guesses.

Things are changing pretty rapidly, and we'll have to wait a week or two to see the effects of this stay at home order and how it affects employees, small businesses, tenants and landlords alike. Also, how the real estate industry adapts to the potential changes in consumer demand.

If anyone has any specific predictions for the Phoenix market, I know there are many investors and real estate professionals that would love to hear your thoughts, so please share.