Here are a few to watch out for:Property Condition: Most distressed properties need extensive repairs or renovations, which add to your initial investment.Competitive Market: With Phoenix's popularity among investors, competition for the best deals can be intense.Complex Deals: Foreclosures, auctions, or short sales are much more complicated compared to regular real estate transactions and usually require specialized knowledge.Tips to Successfully Navigate the MarketDo Your Research: Understand the local market conditions, including neighborhood trends, property values, and potential rental income.Build a Strong Network: Work with professionals who specialize in distressed properties-such as brokers, contractors, and legal experts-to make the best decisions.Assess Costs Carefully: Factor in the cost of repairs, holding costs, and any potential financing issues when evaluating a property’s profitability.Be Patient: Finding the right distressed property takes time.

As far as your primary residence, if you have lived in it 2 out of the last 5 years, you should not have to pay taxes on capital gains (difference between what you paid for it & what you sold it for) up to $250,000 if you file your taxes as an individual and $500,000 if you file jointly with a spouse.Just a disclaimer, I am not a tax professional.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Best of luck, but again, I suggest hiring a professional. 

Readers should seek professional advice.

These are professionals with additional training and a stricter code of ethics.

You should consult a tax professional for an answer based on your unique situation, this is not tax advise just general information.

Work with Professionals – Consider forming relationships with local appraisers, title companies, and attorneys to help with due diligence.

Partnerships: Collaborate with other investors or professionals to pool resources and expertise.4.

Similarly, if you are you a medical professional with strong connections at the local hospital, then target properties (and their owners) that would attract medical travelers.