Supply and Demand: When buyers outnumber sellers, prices and rents rise.Population Growth: Cities with significant and sustained population increases are more likely to see long-term rent growth.Job Stability and GrowthA property’s value is tied to the jobs in the area.

It is about supply and demand. 

I was thinking he supplies the down payment and acts as a silent partner.

Construction is mainly CMU, Concrete, and Steel (at least for my projects), and there is a bottle neck of those resources as only few supply the area.

For property owners in this area, what have you seen in terms of supply and demand. 

If I were wildly successful in implementing any strategy, I would keep quiet about it and enjoy my life.It's like the tale about the gold miners in California during the Gold Rush of 1849:  the only ones who made real money were the ones selling the tools and supplies to the miners.  

To create rental income that enables financial freedom, you need a location that meets specific criteria.Rents increase faster than inflation: Prices and rents are driven by the imbalance between demand and supply.

As Mitch pointed to, on one hand, STRs are housing supply locally and will likely get looked at. 

I keep hearing that costs of labor and supplies are rising (when aren't they?)

Properties are sitting on market for a bit longer now that supply is slowly creeping back up. 50 days isn't too terrible compared to the greater PHX area.