[quote=Want_to_Retire][quote=SK in CV][quote=Want_to_Retire]You definitely get better demand and appreciation in Coastal CA. However, even in the depth of the slump, I was actively looking and didn’t see any property in South Coastal OC that I can cash flow with 25% down. So, like ctr70, since I would never buy a negative cash flow rental in CA just hoping it appreciates, I ended up buying in dusty ol’ Phoenix. So far, tenants have been good. I think making a broad statements about “better tenants” in CA is interesting, I think it depends on diligent screening and luck in either state.
Now if I had just bought something in South OC hoping for appreciation and put up with some cash flow losses, I’d be eating steak tonight! Or if I had looked in San Diego, doh![/quote]
Most of Phoenix has appreciated at least as much as SD has over the last 15 months. So you should have both cash flow and appreciation, where in OC, you’d have negative cash flow and appreciation. I suspect you bought both at the right time and the right place. Particularly if you can keep it rented to the same tenant. (turnover kills)[/quote]
Update from the ground in Phoenix: Closed on a house in Paradise Valley in February – 25% down, overpaid a bit compared to the market but was tired of getting cut off at the knees on my bids – hoped appreciation will allow me to catch up to the price – it’s close. Put it on the market for rent in April – still finishing repairs/cleanup – got 13 month lease in June. Cap rate (including repairs) – estimate 5% and up depending on turnover (10 month – at 12 month net rent the cap rate is about 9%). Most of the tenants stay past the year and finding new tenants have been fairly quick during the right time of the year. The economy appears to be booming here with news articles about new jobs being created – especially in the Chandler area – but given the appreciation in home prices and the feedback I got from prospective renters on how much they were looking to pay, I think the window for cashflowing investments is closing quickly.[/quote]
Congrats. Just out of curiosity, what is the profile of your renter? Professional? Blue collar, etc?
I was amazed how quickly the market is rebounding there. AZ is not my cup of tea but if you can make the ROI that’s all that’s important.
