The sacred Latin motto of the National Association of Realtors, composed for them by the late great Mike Royko, is “Ubi est mea?” – “Where’s mine?”
That’s a joke, but it’s only funny because it’s true. The actual original objective and the ongoing mission of the NAR is to cling to the commissions by making competition with its members illegal, unprofitable or onerous – ideally all three.
That’s it, the secret sauce unbottled: The state real estate licenses the NAR created and bought, legislature by legislature, forbid non-licensees from listing, leasing or selling real property for compensation.
It’s only the last two words that matter. This is still an allegedly free country, so no one has yet tried to stop you from doing my job for free. For Sale By Owner sellers do it, as do some investors. The chains the NAR hired the states to forge were imposed only upon people marketing real estate professionally – who typically bear those chains lightly, seeing them as golden handcuffs, if they see them at all.
But it should come as no surprise at all that the newly revised forms being promulgated by the Arizona Association of Realtors are about nothing but compensation. The NAR got sued for putting the brokers’ interests ahead of their clients’, and its response is to disclose, ratify and formalize that self-seeking behavior.
So how will listers compensate buyer’s agents – while pretending they’re not? And how can we more elaborately disclose the inevitable twinned-betrayals resulting from dual representation? And whatever shall we do about hypothetical unrepresented buyers?
My answers to those questions are easy: Bloodhound Realty always pays the whole pizza – don’t bind the mouths. I represent sellers only, never buyers, because there can be no doubt about my loyalty. And sellers should counter unrepresented buyers by making the earnest deposit huge and non-refundable; if the buyers make it to the finish line that’s great, but the seller’s risk is indemnified if not.
But consider this choice bit, from the proposed listing contact:
I read that to say that, by listing your Sun City home for sale with me, you will be waiving your right to join any class action lawsuits, now or ever. As with the “release, indemnify and hold harmless” tap-dancing in our contracts, this mumbo-jumbo will mean doodly-squat as soon as it hits a courtroom. But it is bald-faced goniphery even to propose this, given what the NAR has put the country through.
I am a member of the NAR under protest: To gain access to the MLS, the blue Supra lockboxes and the AAR forms library – held by state courts to be the de facto standard of care – I am required to belong to the national, state and local branches of the NAR. As soon as those three products are unbundled from compulsory membership, as they will be, I will no longer be a part of this evil anti-competitive, anti-consumer criminal cartel.
“The opposite of anarchy is warfare, and the war is on at Duffeeland Dog Park.”
A Ramblin’ Gamblin’ Willie story
Sun City, June 27, 2013 This is a story about how the world gets shittier and shittier – utterly unnecessarily – one stinky little turd at a time.
“Do you mind if I ask you a few questions?” Thus spake Commandante Clipboard, the Sun City Recreation Center’s micro-minion charged with annoying people and their dogs at the Duffeeland Dog Park.
His is not my first clipboard – hell is heaven after it was reorganized by busybodies with clipboards – so I said, “I think I need to pass on that opportunity.”
“Okaythen,” he forged ahead obliviously, “Can I ask where–uh… Wuh– ?”
“I said, no, I would rather you did not ask me any questions.”
I was there with Naso, of course, and we had stayed too late in the day. It used to be that the park was open twenty-four hours a day, but since the Rec Center took it over locks and chains and orders backed by threats are the order of the day.
“But I have to know if you belong here.”
“Now there’s a topic fit for a philosopher. I am imminent, surely, but does my imminence make me immanent? But, really, practically speaking, addressing such subjects is no path to eminence, much less prominence, and I speak from a lifetime of experience.”
“What the hell are you talking about?” Commandante Clipboard was getting steamed, and I confess to taking a certain satisfaction from this particular flavor of petty vengeance.
“I’m trying to help you determine if I belong here. I would argue that my presence is an existential instantiation of a contingent, temporary inevitability: I am here by my own free choice, but while I am here I am incontrovertibly here, I am not anywhere else, and no one else is where I am. If that doesn’t equate to belonging here, then you’ll have to do your own homework.”
“Sir. What is your full name?”
I said, “Nescio Nomen” – which means ‘I don’t know my name’ in Latin. I was helpful enough to spell things out for him.
But the trouble with being a smart ass is that people can get the idea you’re cooperating with them. “Can I see your Rec Center card?”
“I expect you can. You don’t show any signs of impaired vision.” That was a canard on my part. I tried being formally polite. I tried being a smart ass. What could be an easier sell in Sun City than an addle-pated old geezer?
“Mister Nomen, will you please show me your Recreation Centers of Sun City membership card?”
“Nope. I don’t have my wallet with me, but I don’t have your card in there, anyway. And I would not choose to show it to you if I had it plastered to my ass and could kill two birds with one stone. If you want to put me off this land, go get a gun or a cop. Until you do, I’ll thank you to leave me alone.”
What puts the shit into a little turd? Authority without accountability. What brings the shit out of that little turd by the geyserload? Holding him accountable anyway. Before he could latch onto a handle to fly off of, I said, “Let me talk for a minute, and then let’s see if we can make a deal, okay?”
I didn’t wait for him to respond, I just launched into my schtick. “This park used to be the perfect anarchy, a little piece of paradise in the midst of the mundane. One man owned it as his own private property, and he shared it with his neighbors – with anyone who loves dogs and wants what’s best for them. And the people and their dogs loved him and they loved this park and they took care of it like it was their own.
“And this is the only dog park in all of Phoenix where there is decent shade. And Duffeeland was the cleanest dog park in The Valley, even though most of the people who come here aren’t all that spry. And the park was open all hours, and it was safe to come here anytime. We’ve met a lot of interesting people here after midnight, and more than once my wife and I have made out on a bench while Naso here took in her late-night sniff.
“But then the owner sold the land and the Rec Center bought it, and everything has been downhill since then. Chained up all night, right away, even though the night-time is the right time for a desert dog to take exercise. And then the signs came and the threats and the fines and recriminations. It’s not ours any longer, it’s yours – and it shows. The dog shit’s starting to pile up, but that’s just a symptom. The people here used to be a ‘we’ – a loose-knit family. Now they’re an ‘us’ – because you’re ‘them.’ The opposite of anarchy is warfare, and the war is on at Duffeeland Dog Park.
“But think: Before one man owned the park and everyone valued it. Now everyone owns it and no one values it. Before a group of people who got along perfectly worked together joyously in pursuit of the values they shared together. Now there are spoils up for grabs and power to be seized and innocent people to be shamed and bullied and milked and pit against each other, and the spirit of family – this thing that we do together means more to me than something else I might do instead – that spirit is all but gone from Duffeeland. It vanishes every time people try to supplant force for persuasion, coercion for cooperation, warfare for anarchy…”
To this he said nothing. My guess is he was bored. Sun City is full of amazing people – people who built business empires, people who won wars – but the young idiots who do the scut work around here quite literally have no way of comprehending that greatness. An ant could climb all the way to the top of a skyscraper and yet never catch a clue of what he’s doing, so it just won’t do to ask him to evaluate giants.
I said, “Here’s my thinking: The Rec Center is essentially a homeowner’s association, so its real job is to sustain the value of the real estate. How would you do that? By making people feel welcome, at home, delighted to be here. Is there anything in the ways that people react to you that makes you think they are delighted to see you show up?”
I held up my hand. “Don’t answer. I’m over my quota on lies for the day. In the long run, warfare will win here. You will drive people so crazy, they’ll stop coming to Duffeeland, and then the Rec Center will sell the land as a matter of fiscal prudence. In five years, this will just be another drive-through pharmacy, with access from both directions. Sic transit gloria mundi.
“But here’s my deal: My dog is dying. I’m here until she dies, and then I’m gone with the monsoon winds. I’ll be back to Sun City, but I’ll never be back to Duffeeland. Now it happens that this big, gangly Bloodhound bitch is the queen of this particular dog park. Everyone loves her, and she loves everyone. If you want to make a big show of throwing your weight around, you can endure the shrieks of three-dozen angry grannies. Or, instead, you can forget all about me for two more weeks, and then we’ll both work hard to forget each other forever. Sound like a plan?”
He was looking away, deliberately not making eye contact. Nobody likes to back down, but I’m betting he could guess how much more he had to lose in a dog park war than I ever would. After a long time he turned to me and said, “You have yourself a nice evening, Mister Nomen.”
I didn’t fix anything, don’t kid yourself. I’ve talked my way out of the endless shit that oozes out of officious shitheads all my life, but I’m sure it’s because I just don’t look quite like food to them. But warfare is conducted by people, and people can be swayed. I don’t love it that I have to defend myself from petty thugs, but I love it that I can do it when I need to.
So I smiled, and I really tried to put some warmth into it. “Happy Independence Day.”
Al and I are in complete agreement about these principles, so I’m delighted to share them with you:
Real Estate Declaration of Independence
We, the people who buy and sell real estate, hold these truths to be obvious:
We the people believe that information on real estate for sale should be readily accessible without surrendering our private information. We reject having to register on a web site in order to view listings in an area. We value our time and will contact a real estate professional when we are good and ready for their services.
We the people reject all policies of the National Association of Realtors that are not in the best interest of the real estate buying and selling public. Limiting our access to information, restricting our ability to a free and open market through regulation and limiting our market choices are all examples of policies we reject that are designed to line Realtors pockets at the expense of the public.
We the people reject “Dual Agency,” where a real estate agent has an inherent conflict of interest with his agency and fiduciary duties by attempting to represent both the buyer and seller in order to earn a larger commission on our transaction. If the agent is truly delivering value, both parties of a transaction have an equal right to that value without a conflict of interest and each party deserves their own agent in the transaction.
We the people reject the practice of real estate agents trying to “Buy the Listing” by telling a potential seller an above market price in an attempt to secure a listing. This practice costs sellers time and money while their home sits on the market as the agent waits for the seller to cut the price to where it should have been to start.
We the people reject the practice of real estate MLS systems that limit a home seller’s exposure to potential buyers in an attempt to control access to a market. A listing agent’s responsibility is to market a property to the best of their ability and limiting the exposure of our home costs us money.
We the people are independent in a country that still allows us to make market choices. We the people demand better service and will exercise our freedom of choice and only choose Real Estate Professionals who deliver better value.
In Arizona, a real estate licensee has a fiduciary duty to his client. That means that, when we decide to work together, I am obliged to put your interests ahead of all others, including my own. Too often, and much too deservedly, Realtors are perceived as being self-dealing, self-serving and self-absorbed. If you keep this Real Estate Declaration of Independence in mind, you’ll be better prepared to avoid that kind of agent.
It’s tough out there, everybody knows that. Your house may not be worth even half what you paid for it, and you’re having trouble keeping up with the payments. It could be your situation is so dire as to boil down to two choices: Let the bank foreclose on you or try to do a short sale.
What’s a short sale? If you could sell your home for what it’s worth today, you would probably have to come “short” to the closing table: The amount of money you could bring back to your lender from the proceeds of the sale would be less than you owe.
Are banks willing to do this? Yes, in principle. The bank reasons that it can get more money for a home that is still being cared for, as compared to yet another vacant lender-owned home.
What about you? Is a short sale to your advantage? Here’s your bottom line in both cases: Zero dollars and zero cents. That’s how much you’ll receive when your house sells.
So why should you prefer a short sale to a foreclosure?
For one very simple thing, because it’s the more responsible thing to do. You can’t pay your mortgage, and that’s a tragic turn of events. But by helping the bank effect a short sale, you’re doing what you still can to honor your obligations.
Even more important, a successful short sale can be less damaging to your credit than a foreclosure. You’re going to take a hit on your credit rating, either way. But the worst consequences of a short sale could be over in two or three years, where a foreclosure may wreck your credit for five years — or even longer.
On balance, a short sale is probably the better idea. Here’s the next question: Does it make any difference to you which Realtor you hire to list your home for sale as a short sale?
Remember that net figure: Zero dollars and zero cents. Since you won’t be getting any money from the sale of your home what difference does it make to you which Realtor sells it?
As it turns out, it makes a lot of difference. For one thing, no short sale is secure until it is closed. There is always the threat that the bank will go ahead and foreclose on you. You need a Realtor who can put matters in motion quickly, so you can complete the short sale before the bank gets tired of waiting for its money.
There’s more. Many Realtors treat short sales like a red-headed step-child — a slap-dash listing effort focused more on adding to their listing inventory, rather than actively selling your home. But the faster your home sells, the more money it is likely to command — which will make your buyer’s offer that much more attractive to the bank.
So what will make your home sell more quickly?
The answer? Marketing.
Where you and your lender see a short sale, your buyer sees a home. And guess what? Your buyer is seeing a lot of really grungy homes. Dirty. Missing appliances. Crowded floor to ceiling with personal possessions. Even though you have no equity in the property, your marketing problem is no different than in a normal equity sale: How do you get buyers to prefer your home over all the others available on the market?
And this is why it matters which Realtor you choose to list your home as a short sale. Your net might be zero dollars and zero cents, but you still have a lot to lose. The faster your home sells, the more money it will command, and the more money your lender stands to get, the more likely they are to approve your short sale.
It’s that simple. Working with a better Realtor — better not just at the mechanics of short sales but also at the mechanics of marketing — will bring you better, faster, happier results.
This is not a joyous event in you life, that’s understood. But working with the right Realtor on your short sale will help you make the best of a bad situation.
Am I blowing my own horn? Oh, you bet! I have advanced designations in short sale negotiation and management, and I’ve developed an extensive praxis for successfully marketing homes. I’ll bring every bit of this expertise to bear in getting your home sold as quickly and as painlessly as possible.
What’s the cost to you? Zip. Nada. Nothing. We typically charge our sellers an up-front retainer from $1,500 to $2,500. But they’ll be seeing cash at the closing table, and, if you go ahead with a short sale, you will not. We’ll take our compensation from the proceeds of the sale at Close of Escrow, and we’ll pay the buyer’s broker as well. You have nothing to lose by choosing a better listing agent — and a lot to gain.
So let’s talk, shall we? Give me a call at 602-369-9275 or email me and we’ll get together to figure out the best short sale strategy for your home.
Handyman Mark Deermer and I have been planning for this for a while: We’re going to ride the Phoenix real estate market back up by fixing and flipping some of the (many, many) distressed homes we work with. We’ve fixed up quite a few homes for buy-and-hold investors, and this is the logical next step in our praxis.
As with buying rental homes, it’s a matter of property selection before anything else. The right home, in turn-key condition, will sell at a substantial premium over its distress-sale price. By buying the right MLS-listed and court-house-steps properties, we can net out significant returns after all expenses.
Buying right is everything, of course. If we overpay on the way in, we’ll have trouble extricating ourselves on the way out. We’re doing this now because the market in Greater Phoenix has reached a point where the math works fairly consistently. Houses that will flip profitably are still not common, but we’re to the point where they’re one among hundreds, rather than one among thousands.
The second step in the process is handling the refurbishing wisely and well — and quickly. Our goal is to get our properties back on the market within four days of taking possession of them. And we won’t be doing wish-and-a-promise fix-ups. Every house we do will have all new interior paint, all new flooring, all new window treatments and all new kitchen appliances. We want to give our buyers that model-home feeling — because they’ll pay more for homes that are white-glove clean and move-in ready.
And the third step is marketing, a process we get better at with every passing day. The homes we’ll be flipping will be completely refurbished, but they will also be staged for sale, with the kind of tasteful decorator touches that make people feel at home. We’ll build a marketing web site for each home, showing off what we’ve done with before and after pictures, and documenting the remodeling — both to defend the sales price and to assist the appraiser in seeing our justification for the sales price.
We’ll be pricing aggressively to the market, as well, thus to turn the money over more quickly. Our goal is to go from sold to sold in two months or less — with each investor’s money turning over six or more times a year.
Do you have stars in your eyes? The profit per home will not be huge. But because the money is turning over so rapidly, the annualized return-on-investment could be very substantial.
Why am I writing this? Because we need money to make this work. I’m going to be the marketing partner in the partnerships we’re putting together. Mark is going to be the work partner. What we need are finance partners.
The kind of houses we’re going to be working with are going to require around $100,000 in capital each. That will pay the acquisition costs plus the cost of refurbishing the home. Everything else — closing costs and unpaid liens — can be paid out of the resale proceeds at Close of Escrow. But each Limited Liability Corporation we put together is going to want $100,000 in seed capital. This can come from one or more finance partners, and the seed capital will be restored to the LLC after each house is sold, before any profits are disbursed.
Here’s the way to figure this: Even if the investor’s ROI is only 5% per flip, if we can turn that money over six times in a year, that’s a 30% annualized return. That’s good money by anyone’s standards — and the returns only stand to improve when the Phoenix real estate market finally gets back to an upward trajectory.
But what about down markets? God help us, it could happen. But this is why we’re working to sell the properties so quickly — and at aggressive prices — to get our money in and out before we can lose too much to declining values.
I’m not blowing smoke up anyone’s nose. We’ve been working on this problem for a year-and-a-half, all to make the numbers work. I’ll be documenting out projects here, so you can see what we’re up to.
Meanwhile, if you want to get in on this opportunity, speak up. We’re going to put together up to twenty of these partnerships, flipping as many as ten homes a month. This is a lot more aggressive than buy-and-hold investing — and a lot more risky, of course. But we’re offering the potential for truly astounding annualized returns. If you want to get involved in real estate on the supply side, here’s your chance.
That chart illustrates sales prices for the past 13 months, as reflected in BloodhoundRealty’s Market Basket of Homes. What we’re looking at are suburban stucco and tile tract homes, the houses that drive the fat middle of the bell curve in the Metropolitan Phoenix real estate market.
That line looks awful spiky doesn’t it? That’s just the drama of charting software. What you’re really seeing is a market that is essentially flat. Prices go up. Price come back down. A home that would have sold for $122,000 in March of 2009 will have sold in March of 2010 for — wait for it — $121,000.
That’s right. For the past year, the Arizona Republic and half the faculty at ASU has been bellowing that the market has turned. It has. Slightly downward. And now that the home buyer tax credit is about to expire, it seem plausible that the near term trend will be still further downward.
Prices will probably decline gradually, mind you, and investors have clearly thrown a floor under our market. I would be surprised to see dramatic drops in values, but the segment of the chart documenting events from August through December of 2009 illustrates the impact of the tax credit. Without it, I expect this chart to grow even flatter in the months ahead.
Means what? Jump. Interest rates are still low, and cash is still king. Inventories will grow — nudging prices downward — and the quality of the available homes is gradually getting better. If you have the means to buy a home in Phoenix now, this may be the perfect storm. If we’re at the bottom, we’re going to be here for a while. But if you can afford to wait out the market, you can buy a whole lot of home for your money.
I have a lot of investor clients, folks who want to buy rental homes in greater Phoenix — to buy and hold them as long-term investments. Early last fall and again late this spring I have advised many of them to sit tight, to wait the market out.
What are we waiting for?
The final lapsing of the first-time home-buyers’ tax credit. We can be quietly delighted for all the nice folks who were able to get into houses because of the tax credit. But it remains that those sweet people were driving up home prices, making it difficult for investors to latch onto better-quality rental homes.
All that changes this week. The tax credit lapses on April 30th, so we should start to see a significant increase in available properties. Still better, it will be easier to negotiate deals with sellers, and prices should be more attractive.
The first round of the tax credit, last summer and fall, had a much more profound impact on the real estate market. For the kind of stucco and tile suburban homes I like to buy for investors, prices last fall looked like this:
September 2009: +3.15%
October 2009: +2.14%
November 2009: +2.22%
December 2009: -8.03%
That’s a $10,371 drop in average sales prices from November to December. Demand from first-timers has been lighter in this second installment of the tax-credit, but inventories of the homes I’m most interested in for investors have declined by 20% from the start of the year. More significantly, it’s the choice homes that are being cherry-picked, the ones that need the least work to make them rent-ready.
All of which means that we are on the cusp of a perfect storm for real estate investors: Good homes at very attractive prices. Money is still every cheap, if you need a mortgage, and rents are holding firm. There is no appreciation in sight, of course, but positive cash flow is easy from the first tenant.
If you’re a Canadian real estate investor interested in buying rental homes in Metropolitan Phoenix, it would be hard to pick a better time to make your move.
Depending on your point of view, the Barrack Obama administration has been either great or lousy for Americans. But there is no doubt that Obamas’s “creative” management of the American economy has been a huge benefit to Canadians and other foreign investors.
Click on the embedded audio player below or read the story on-line. Reporter Peter O’Dowd — a genuine born-here Phoenician and a Brophy Prep alum — spent about four hours, total, with Bill Chipman and me, an amazing commitment of effort. And that photo above? That’s what paradise looks like. We have plenty to go around…
Are you a Canadian thinking about buying residential real estate in metropolitan Phoenix? You and everybody else. Prices are low, the weather is incomparable — and the Canadian dollar — the Loonie — is trading at very favorable rates against the U.S. dollar. Canadian home buyers can take a 60% discount off our peak prices, plus an additional 15% discount on the exchange rate. There’s just something about buying a rental or getaway home for 75% off that’s hard to beat.
The truth is, it’s a perfect storm for all buyers in the greater Phoenix market right now. There are plenty of great homes available at bargain-basement prices. Interest rates are hovering at historic lows. And the house-hunting weather could not be more perfect. But Canadian buyers have all those advantages plus a very favorable currency exchange rate. If you’d like to explore your options, you can start by searching for your ideal home in Phoenix or Scottsdale. When you’re ready to find out more, send me an email or phone me at 602-740-7531.
You may never see a convergence of events like this again. We’re ready to jump when you are.
I’ve known for six months or more that there was a sweet spot on the horizon for investors and other highly-solvent buyers in the Phoenix real estate market. That event was delayed by the first-time home-buyer’s tax credit. Today’s news about declines in the number of pending purchase contracts is a symptom of the market returning to an unstimulated level of demand. I watched the dropoff reflected in today’s news as it happened last fall. Lenders cut off new applications for first-timers and, just like that, price pressure eased, available inventories started to rise and it came to be a lot easier to get a house under contract.
We’re all waiting for the other shoe — the shadow inventory — to drop, but the supply of the homes I want most for my investors has almost doubled since mid-October, from around 350 units then to just over 600 today.
Here’s even better news for buyers (not for banks): Prices are going down.
That’s a huge drop for December — giving back almost everything we’ve gained since April, 2009. But, interestingly enough, the ratio of sales price to list price was positive. In other words, there is still competition for listed homes, but list prices are dropping.
I don’t know how it is where you live, but this is the perfect storm for investors in Metropolitan Phoenix. The homes are in much better condition than they were this time last year, and the prices are at hovering just above the 2009 low.
Are we at the bottom? Feels like it — but we’re going to be here for a while. Positive cash flow is easy, but cash flow is all there is right now. If you’re not a buy-and-hold investor, Phoenix is not for you. I’m sure that’s true in most rental markets.
But if you’re thinking of buying a rental home anywhere in Greater Phoenix, reflect on this: This could be the coldest winter in 25 years. Whether they can afford to or not, people in the snowy states are going to move. When they do, they’re going to need a place to live.
Give me a call at 602-740-7531 and let’s talk about how you can ride the Phoenix real estate thunderbird as it rises anew from the ashes and soars its way back into the cloudless skies.
An extended answer to a question from a buyer client, the short film linked below goes into the in-house procedures that result in the observed effect: Lender-owned homes are much easier to get under contract and to get through the closing process than are short sales.
We also talk a bit about strategy, particularly for mortgage-financed transactions.
My friend Andrew Breese asked me to go through my own history, in light of both the real estate boom and the bust, detailing where I was wrong and where I was right.
Very big job, and it would be a long essay to write, so I’ve elected to go through it in video instead.
I represented tenants for my first two years as a real estate licensee. I walked into — and walked right out of — hundreds of homes that were amazingly inappropriate candidates for tenancy.
Horrible locations, with no access to jobs, schools, shopping, entertainment, transportation.
Still worse, horrible homes, dingy, run-down testaments to the perils of deferred maintenance.
And still worse, many of these homes would be filthy — stained carpets, smudged walls, debris everywhere. In many cases, the carpets had not even been vacuumed, and often the back yards were shoulder-high jungles of weeds.
Would you want to live in a place like that?
Why would you expect that a tenant would?
Here’s a better question: What kind of tenant, do you suppose, would settle for a rental home like that?
Landlords can be penny-wise and pound-foolish. They will buy a dump of a property because it’s cheap, convinced that their salvation will be low rents. But bad properties attract bad tenants — by repelling all of the good tenants.
The wrong rental property is the worst kind of real estate investment: It will rent slowly, with long vacancies between tenants. And the tenants the landlord will be forced by circumstance into accepting may be slow-pay, no-pay eviction candidates who may do damage or steal the appliances on the way out. And, of course, because the house is repellant, it will attract nothing but low-ball offers on resale.
But take heart. There is a better way of doing things.
First, what you want is the right location — a built-out suburb with its own job base, with schools and shopping and entertainment already in place. And don’t buy a dump. Nobody wants to live in a dump. The house you’re looking for should be appealing to tenants, but also to owner-occupants. Why? Because owner-occupants will pay more than investors when it’s time to sell.
But even then we’re not done. We’ve got the right house in the right location, but we also need to refurbish the home to turn-key condition. Why is that? Because tenants — especially premium tenants — have choices. We want for our home to be first on their list of candidates, when they go out shopping. That way, you will have your choice of top-quality applicants: Good jobs, good income, good credit, good payment histories, good real estate references.
A home like this will rent quickly, will stay rented, and — if you continue to maintain it in turn-key condition — will suffer little vacancy between tenants. Moreover, your tenants will treat your home as if it were their own, so your costs between tenants will be lower. And because we chose the property with resale value in mind, it should sell quickly and at a premium price, ideally to owner-occupants.
This is a sound business strategy. Your objective is to make money. This is the way to make money in the suburban-Phoenix rental housing market.
