tvaldez - hi. I am also in Phoenix and I am trying to close my first deal. I am looking for houses that can cash flow according to the formulas:
50% of rents for operating expenses; the remaining 50% should cover the mortgage and leave $100.00 as positive cash flow. I know these are hard to find, but I will buy if I can find one that fits this criteria.
Based on the above criteria - if a house is in an area that I can rent it for $800.00 I am looking to buy it for around $40k. Houses that I can rent for $1k I am looking to buy for a little over $50k. These are my parameters right now. I have just started to look. I recognize that I will need to buy distressed properties to be able to reach them.
Shortsales are still effective. Especially in this market. Phoenix shouldn’t make a difference. You may need to come up with a better negotiating and/or marketing strategy. (Not sure how your doing it now)
Negotiating (Of coure for the banks) and marketing of course for the buyers.
Lease options, Sub 2 investing, and Owner Financing is also effective.
Of course rental income properties are up as well.
REO’s are definitely up! Take advantage of any of these strategies and you should have no problem making money.
P.s: Marketing is probably your most effective tool that drives any business. In this day and age, you should have and offline presence and an online presence, in my opinion. Hope that helps!