Investing in Houses and Small Multi-Family Properties in Phoenix

One of the most common paths into real estate investing is starting with residential properties … single family and small multi-family. 

To be successful … the secret is picking properties in solid growth markets … and teaming up with a competent and dedicated property manager. 

We’re talking with experts in BOTH investing and property management who work in one of the hottest residential markets in the United States. 

In this episode of The Real Estate Guys™ show, hear from:

  • Your invested host, Robert Helms
  • His multi-faceted co-host, Russell Gray
  • From P. J. Hussey & Associates, Patti Hussey, and Andrew Thruston

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A market with room to run

It seems like it’s harder and harder to find deals … but we’re talking about a market where deals seem to be everywhere … as long as you know where to look. 

Phoenix, Arizona, is a great market for a lot of reasons. 

Phoenix has a great cost of living and lots of things to do. It offers diversity in industries and socioeconomic levels. 

If you look at the data on the best places to raise a family and where rent growth is the strongest, you’ll see cities that are part of the greater Phoenix Metro … like Gilbert, Mesa, and Tempe, Arizona. 

Phoenix is also the distribution hub of the American Southwest … which means a ton of merchandise moves in through its marketplace.

The silver tsunami favors cities like Phoenix that offer retiring baby boomers a warm climate with great medical care. 

If you’re sitting in California and looking for a place to relocate, Phoenix is one of the locations at the top of your mind. 

We’ve been involved in this market for more than 15 years … and it just continues to grow and improve. It continues to be stable … and we continue to see opportunities. 

This is a market with room to run. 

So, what does that mean in terms of specific opportunities for real estate investors?

Perfecting property management in Phoenix

Patti Hussey and Andrew Thruston of P. J. Hussey & Associates have been involved in the Phoenix market for a long time. 

They specialize in a unique part of real estate … property management. They also do construction … everything from rehabs to new builds. 

Their niche is in single family homes as well as small multi-family units of 18, 25, or 50 apartments. 

Patti started out in banking many years ago. But when a friend bought a property and asked her to run it, she thought it was a good idea. 

She found herself in property management … what we consider the most important … and least appreciated … part of real estate as the owner and broker at P. J. Hussey & Associates.

On the other hand, Andrew Thruston grew up in a real estate family … and didn’t want to go into property management. 

“Growing up, I saw how much my mother worked, and I swore it off. But over the course of time, I just saw so many opportunities in the industry to serve other people,” Andrew says. 

By bringing the property management and the construction piece of the investment puzzle under one roof, Patti and Andrew are able to serve investors more wholly. 

Many folks who flip houses are looking to do as little as they can to get the right price and then they move on. 

But when an investor is putting in the work alongside their property management company … you need to be prepared to hold the property for a long time. 

“We try to figure out what are the best improvements that will maximize the rent. That’s our focus,” Patti says. 

In the Phoenix market, some of those common improvements include having laundry in every unit and additional storage options for renters. 

Investors in the Phoenix metro benefit from fair landlord/tenant laws and tenants usually stay at least two years in a property. 

With the migration boom, there are tons of opportunities for growth in the Phoenix metro area. Thousands of apartment units are being built … and thousands more are needed!

But in a competitive market, there are always things to be aware of. Do your due diligence. 

The power of the property manager

The client base at P. J. Hussey & Associates has changed over time … just as Phoenix has changed and grown too. 

For example, in the last several years, positive exchange rates led to a surge of Canadian investors. 

They also work with everyone from large purchasers down to individuals looking to purchase an initial investment property. 

They have also worked with a variety of property sizes and qualities … from D to A … and cover a huge geographic area surrounding Phoenix. 

“One of the things that we have done to be able to manage an area of that size effectively is departmentalize all of our services. This allows experts in each field to focus on what they do best regardless of location,” Andrew says. 

P.J. Hussey & Associates also has technicians and maintenance staff in house instead of contracting out to third parties … helping them to respond quickly when needs arise.

“Without happy tenants paying the rent, we don’t have happy owners. So, we really focus on tenant service and responding promptly,” Andrew says. 

And that’s the hardest part of property management … keeping tenants happy. As an investor, you want to ensure your property manager is treating folks with respect. 

Remember … property managers are the boots on the ground team. They have valuable knowledge to share … so take advantage! 

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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Phoenix

Phoenix

 

In this desert paradise … demand for rentals is heating up!

 

In the heart of the Sonoran Desert sits the “Valley of the Sun” … and this valley is golden for so many reasons. 

Phoenix consistently ranks as one of the most affordable areas of the United States …

So naturally rents have outpaced national growth since 2016

In 2018, rent growth in the greater Phoenix area was more than double the national average … but overall rent prices remained significantly lower than the rest of the country. 

The 2017 tax law changes had far-reaching impacts for Phoenix and the other Sun Belt  states. 

People living in high-tax states on the East and West Coasts used to mitigate tax costs by deducting state and local taxes from their federal income tax. 

With that option removed, those same people are moving to low-tax jurisdictions like Phoenix instead. 

The resulting steady population growth has made Phoenix one of the most popular markets for multifamily investments. 

Demand for rentals is strong and supply is low … so there’s nowhere to go but up!

And since the ‘08 market crash, Phoenix demand and pricing has been doing just that … steadily going up and up. 

Industrial space in the metro area fills up fast, rents are rising in the office sector, vacancy numbers are healthy, and the retail market is BOOMING. 

In 2018, major retailers Costco, Lowe’s, Sprouts, TJ Maxx, and Nordstrom Rack announced plans to build new stores in the metro area. 

The following year, Phoenix saw employment gains at nearly five times the national rate.  Major industries in the area include finance, biomedical, and software development. 

The western part of the valley is a popular location for warehouse and distribution space. Major distribution centers for Dick’s Sporting Goods, SubZero, and REI, Inc. operate from the region. 

The surge in population since 2017 has jumpstarted the revitalization of downtown Phoenix, with revamped buildings housing expansions of University of Arizona and Arizona State University.

When it comes to recreation and entertainment, Phoenix has something for everyone … professional sports teams, national parks, and all-around wonderful weather.

Explore the resources below to discover what opportunities await in this one-of-a-kind desert paradise …

Radio Shows

Reports & Articles

Market Field Trips & Property Tours

  • Coming Soon!

Boots-on-the-Ground Teams

Clues in The News

The Rich Dad Real Estate Summit

9/13/09 Scottsdale, AZ – Nearly 150 enthusiastic people gathered in Scottsdale for the 2 day Rich Dad Real Estate Summit hosted by best selling author Robert Kiyosaki and conducted by Rich Dad Advisor and real estate entrepreneur Ken McElroy. The Real Estate Guys were on hand to not only observe, but participate in this inaugural boot camp which is dedicated to teaching active and aspiring real estate investors how to succeed in the “new” real estate economy.

The event featured a host of highly qualified experts in various aspects of real estate investment including property management, financing, deal sourcing and analysis, and taxation. The event started at 9 am on Saturday morning and ran well into the evening. We didn’t get back to our hotel room (at the very nice Scottsdale Plaza Resort) until close to 9 pm, but even then we weren’t done! We had 5 different real life investment deals to review in preparation for the next day when we would divide into team and prepare and present offer letters to the panel.

Though it sounds intense, the Rich Dad team did a great job keeping the energy up with lively music, regular breaks with refreshments provided, and the trademark conversational breaks where we would discuss the topic at hand with other students sitting at our table. Not only did this break up the monotony of lecture, but it really helped reinforce our understanding of the material. Teaching is a very effective learning tool. In fact, when we were talking with Robert Kiyosaki during a recording session on Monday, he said one of the reasons he works so hard teaching is because he learns so much!

In the afternoon of the 2nd day, the crowd was divided into teams and each team was assigned one of the case study properties on which to write a Letter of Intent (LOI). It was like being on The Apprentice! The pressure was mounting to finish the analysis and craft an offer that would be strong enough to win, but without overpaying for the property. As the announcer counted down the time, the tension mounted. People were running to the front of the room to submit their offer before the time ran out!

A representative from each team was called up to sit with their competitors in front of the panel of judges. One by one, each had just 2 minutes to present the offer. Then the panel would begin to question and negotiate. Having been through this process many times ourselves, we can tell you is that very realistic!

There were far more lessons than could ever be contained in this short report, but even with all of the experience we have in the real world of real estate, The Real Estate Guys definitely discovered some new things. Plus, we made lots of new friends!

Overall, we thought it was a great event – well organized, well produced and lots of fun. We can’t wait to go to the next one!