I Thought The Arizona Real Estate Market Sucks! A TRUE STORY........................
If you watch CNBC, Fox Business or read most major metropolitan newspapers all you hear about is how horrible the Arizona Real Estate Market is doing. Plus, with the recent run up in the stock market everyone is jumping on the Wall Street bandwagon.
I am going to give you a real life example of one of the Real Estate Investors I am working with.
But is Arizona Real Estate still a good investment? Well, the market statistics show Arizona is having a really strong resurgence in the real estate market.
You can read these statistics at my past blog;
http://www.azhomebuyercoach.com/2009/09/az-foreclosure-real-estate-market-update/
Now, back to the investor. They have recently bought their third investment property this year. They have paid cash for each of them. Is this a good use of their cash?
Let's see......Purchase price was $84,900 (paid in cash). They put a new roof on at $2500 and paid another $1,500 in closing costs and inspections. Also, the interior of the home had been completely remodeled before the sale!
So, their TOTAL cash investment is; $88,900
They rented the house within a week at a rate of $1125 or $13,500 annual income.
That is a 15.18% Cash on Cash Return!
In addition, I have taught them how to have the tenant pay for all repairs under $250. So, they will have almost NO EXPENSE against the income!
Notice this Cash on Cash return does NOT factor in any tax breaks or future appreciation!
But, what happens if the value still goes down by 20%? What happens if the market correction is still not over?
ABSOLUTELY NOTHING! They are still getting their $1125 in rent and they have no plan on selling the house in the next 20 years.
That is a 15.18% Cash on Cash Return!
Would you like the same returns? Would you like to buy homes 10% to 20% below market value? Call our office at (602) 291-4362
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