Investment In AZ
I found a triplex in Phoenix AZ for $120K
I do not know the area, and the RE agent will send me photos of the property. The property has been on the market for 90 days, bad sign. Further, I do not know this area, possibly bad, based on the price is too low. To protect myself, I could write in the contract subject to inspection as a wheasel clause. Now the positive, according to the agent, the unit can be rented for $650 for the 2/1 each, and 450 on 1/1. Since my FICA score is high, I could be qualify for pick a payment program that would give me a rate starting 1.5% interest payment only. I am not looking for appreciation, just cash flow. Is this a good investment? To all Pro out there pls I need your idea. Thanks :-? [ Edited by alfie1 on Date 09/01/2004 ]
I am also in CA, Los Angeles nearby and looking for REI in AZ as well.
How much do you want to offer?
How motivated is the seller, apparently must have some because of 90 day? Either the listing price is too high or there is something wrong with the prop.
You probably have to inspect the prop. since you don't know the area.
Maintenance cost
Repair cost
Tax, insurance
What is the current occupancy?
How much does the seller owe?
Rental market in that area, rental market rate for similiar prop.
CAP rate
How much cashflow will you get?
Since your cashflow is #1 priority, you also want to have a good prop. so it will appreciate in case you want to sell, won't it? Typically it's renting with cashflow, then the appreciation will increase overtime but you have to consider the potential as well.
Just some of my advise. Now others can pitch in...
I have been looking at Phoenix also and will likely travel there in a week or so. My info so far is that there are some areas where the rental market is very soft. One reason is that there are many investors buying up down there. You probably should check out the local rental market and the neighborhood as well as the property. There are some bad areas in Phoenix.
On the plus side for us Californians I am told that taxes and insurance are less.
[ Edited by edmeyer on Date 09/01/2004 ]
Like the one guy said...there are many rental properties in metro Phoenix area. I know of one guy from TCI who was having hard time getting the tenant into his apt in Mesa. I see many specials like one month free rent and etc to stay competitive. It could be really tough to keep them occupied all the time. I think you would do much better by buying a newer single home. Appreciation of single homes in newer area is CRAZY. But homes are still affordable. Buy some single house in Surprise, Goodyear, or Peoria...newer house... My house appreciated $12,000 in a few weeks!!!
I live in San Diego, CA and I owned 2*4 plexs in scottsdale about 5 years ago. The cash flow looked great (on paper) and it seemed like a good property in a central area.
the problem I had was with the property managment, and a crappy tenants who brought in all their relatives to live in a 2 bedroom apartment.
I noticed that phoenix is very mixed, you can have a ghetto street next to a nice area.
I am considering going back to phoenix for investments, but this time maybe a single condo in tempe, at first and then if it goes well I will grow.
my recomendation is, don't count on a property managment , they are in business to make money not to help you, so get something that you know you can handle your self and make sure the tenants can speak your language.
azbeda,
Can you find a better PM, and also can you evict or do some thing with extra people/relatives: increase rents?
What are some investment differences between you buy condo versus SFH, in terms of rent/lease O, appreciation? What is your plan?
Quote:
On 2004-09-13 14:24, azbeda wrote:
I live in San Diego, CA and I owned 2*4 plexs in scottsdale about 5 years ago. The cash flow looked great (on paper) and it seemed like a good property in a central area.
the problem I had was with the property managment, and a crappy tenants who brought in all their relatives to live in a 2 bedroom apartment.
I noticed that phoenix is very mixed, you can have a ghetto street next to a nice area.
I am considering going back to phoenix for investments, but this time maybe a single condo in tempe, at first and then if it goes well I will grow.
my recomendation is, don't count on a property managment , they are in business to make money not to help you, so get something that you know you can handle your self and make sure the tenants can speak your language.
Ask for copies of as many of the seller's Schedule E's as you can get, try to find out how much it costs to keep it running. High expenses need to be factored in to any deal. PHX is crawling with investors so it's unlikely it's been missed, but you may be seeing a unique aspect that others have missed. Find out how to make the numbers work for you, and offer accordingly.