All Forum Posts by: Wes Blackwell

@Joel Carrasco

Here are some recent nearby leases in that part of Phoenix to give you an idea of what you can get:

2/1 -- 1132 sq ft -- $1395/mo

3/1 -- 1073 sq ft -- $1500/mo

3/2 -- 909 sq ft -- $1650/mo

3/2 -- 1253 sq ft -- $1850/mo

2/1.5 -- 1580 sq ft -- $2,650/mo

The sq ft of the property and it's condition after remodel will be your biggest deciding factor in the rent you'll be able to get. I've got a good lender referral if you need one. Best of luck. 

@LaVonne Eaton

I would call around to local Phoenix real estate attorneys (or wherever the syndication is based) and ask for referrals. They'll know who to point you towards if they can't handle it themselves. 

Here's a good start:

https://syndicationattorneys.com/

@Joel Carrasco

I'm assuming this is in the Encanto area of Phoenix. If you're on the west side of 15th & 17th Ave there is only one 2/1 that sold in the last 6 months. Went for $361k in November, but it was 1,372 sq ft (large for a two bedroom).

So depending on the size of the property, it seems the upside potential is there. Challenge is the ability to refinance. Definitely want to talk to a lender and see what's possible. Also, I'd recommend reaching out to any close friends or family members who may be able to co-sign with you and make financing possible.

Another potential option would be to move into this new property and rent out your old one, as that would help your debt-to-income ratio. You could always move back into your old home after a year if you prefer that one better.

@Matt Lawton

The fundamental issue here is that this doesn't allow for a proper inspection of the property. Have you seen the inside of the units? Are you sure there aren't any Phoenix building code violations currently encumbering the property? Or that the tenants are cooking meth? Or living in a mold infested property? Or that the units are legal and built with building permits? Or that the tenants are actually paying rent? Etc.

Essentially, you're banking on these units being financeable with conventional financing after taking ownership, but don't have the protections in place to ensure that is the case. 

I know my cautions might seem to raise the alarm and I don't know all the details, but these are issues I've seen with properties before and every nightmare scenario you read about on here usually could've been avoided with some due diligence.

You could try to get the seller to agree to a warranty that survives the transfer of ownership, but they probably won't be too keen on doing that.

Another question: Is this property listed or off-market? Does the seller have other buyers lined up? Trying to determine if the tight timeframe required by the seller is necessary. It would seem odd to me if the seller lined up another deal without having this one listed. Keep in mind that the seller has to be getting a discount on his next property greater than the $30k discount he's taking to sell this property. 

Another idea: Tell the seller to use a hard money lender on the deal he's trying to buy LOL.

@Danielle Dorien

I think Daniel gave you some great advice, and to me it doesn't seem worth it. Mainly for the fact it's a depreciating asset and you don't own the land. Minus $10k per year in value? You might as well be buying a mobile home. 

I think these types of investments work for three specific scenarios:

1) You can buy multiple of them in the same building and use them only for STRs via AirBnb to reduce operating costs and maximize returns.

2) Investors whose portfolios already have lots of appreciating properties and they want a luxury lifestyle at a fraction of the cost.

3) Seniors on a fixed income with limited resources who plan to carry them through retirement. 

My advice would be to look for a condo or duplex locally in Phoenix / Arizona that will suit your living needs for now and can be rented when you move away to Hawaii for a bit, and be appreciating the whole time your gone and offer you a place to stay when you come back. 

@Joel Carrasco

It may help if you show some added interest and tell the homeowner you'd like to get a bid for the work that needs to be done to the property. Have a contractor come in and write you up an bid/estimate for every single thing imaginable. Might even be worth it to pay for a home inspection too (as this is what would happen in a normal transaction, and then seller is liable to disclose this information to a potential buyer). Then when you show it to the homeowner they may realize there's a lot more work to be done then they thought there was, and give you the discount you need to get the deal done at a number that works for you. Hope it pans out for you!

@Liza Rhima

I think that postponing evictions for tenants in the Phoenix metro area who are seriously affected by the Coronavirus is the right thing to do, but I think that measures should also be taken to help protect landlords as well (since they're the ones with the real investment to lose). 

I've spoken with a lot of my landlord clients and they're concerned about tenants either lying about being affected by the virus, or owing the landlord a bunch of back-owed rent and then simply moving out at the end of the lease without paying it, adding legal costs to the landlord to attempt to collect the funds. 

I think measures should be taken to avoid greater potential damage to the economy, but I don't think that landlords should be forced to take it on the chin either. Hopefully most lenders will be willing to do a loan forebearance for a period of a few months to avoid foreclosures due to non-payment of rent/mortgage. See below:

https://www.latimes.com/business/story/2020-03-23/landlords-mortgage-relief

@Cameron Lam

I would listen to your banking friend in Phoenix on this one. I don't think the reward is worth the risk. Don't over-leverage when you don't have to. Plus if his name is going to be the only one on the loan then he certainly has the stronger say in this partnership. 

You guys have played it smart up to this point and had some amazing returns. Don't get greedy and potentially ruin a good partnership should things go south. Especially in a time where we have yet to see the full lasting effects of the virus. 

@Monty Bruckman

The HOA may have limits over the length of lease term, and many metro areas have limits on the number of unrelated people living in the same household. Normally you'd be more apt to fly under the radar in a part of Phoenix that doesn't have an HOA... but all it takes is a complaint from the neighbors that you have too many cars parked in front of the house and it can send your whole world into a tizzy. As always, due diligence is your best friend and buyer beware any time you're buying in a neighborhood with an HOA.

@Matthew Kinnear

Great suggestion above to attend the local Phoenix RE meetups to connect with other investors, especially since you haven't clarified exactly what type of investing you're looking to get into (wholesaling, fix and flips, multifamily, etc.) There you will likely find a little bit of everything or even someone who knows who to connect you with.