On paper numbers and in reality numbers are completely different. this is because with riskier investments you have higher chances for evictions, maintenance issues, management calls, non payments of rent, damage to property etc.

You have to pay fees, but you'll have a professional handling issues instead of bleeding money trying to figure it out for yourself, then you have your time free to pursue other things.

We dive into the actual comparable properties to make sure nothing is skewing it wildly.Before you do anything, though, know they STR laws.

I have issues with numbers all the time here, mostly to do with impending property tax increases, so it would be nice to know this too.

The laws mostly protect me the lender and I have always gotten paid even if there are occasional borrower problems.

If similar homes are sitting for 30-70 days, it’s probably a pricing issue.

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.

@Kash Tacke I'm a big fan of ADU's in general especially here in the mid west, yes you could potentially be on the front of the wave, but housing density is the solution to the affordability issue, anytime you are investing with affordability in mind is a great strategy to me, and sound like there are some incentives or at least supporting winds form the local city, that in itself seems like it would be worth at least approaching an architect or contractor to bid up some plans or concepts to take tot he city.  

Renovations were quite a bit more than we had expected due to more issues than we were aware of.

The main issue is your exit is capped so if your costs go up, your profit goes down.