I wrote a blog awhile back about the shoe being on the other foot when looking for property here in Phoenix, AZ. I’ve been searching for a juicy cow (can that be a new phrase for a cash-flowing property that’s a great deal?) and will share my experience here.
In any case, I went under contract on a 4 plex and was ready to move forward. Here’s the play by play
- I found this deal on the MLS, and it caught my eye for several reasons. It was fully occupied, appeared to have been updated in the last couple years, and was in an area of town that I really like.
- Details: asking price, $175,000, rents $495 (with potential to be $500+), NO HOA, all 2 bedrooms, 1 bath, parking in rear, each unit was individually metered for electric and healthy rent market in the area. The one thing that jumped out at me though was listed in the Income/Expenses section was an exorbitant water allotment. I inquired about that and the listing agent said he wasn’t quite sure about it but they could provide all paperwork during escrow. Fair enough.
- I pulled comps and saw similar properties going for $160-$170k, so inquired if there was wiggle room, which there was. I drove the property, liked what I saw, drove the neighborhood several times, and felt good about the location. I checked in with my lender, got the A-OK, and moved forward to go under escrow. I was willing to go near market value for several reasons, so long as the numbers made sense from day one.
- Within a few days I received the leases, title report, and management expenses. I was planning on self-managing, as management companies can really eat up costs if you don’t really comb through what you’re being charged for, …read more