Tuesday night and the trip is pretty much over. All that's left now is the 40 miles back to the airport and a quick flight home. My four days have been a whirlwind of people to meet and homes to see. Like many Canadians who are so unimpressed by our own real estate prices I have been following the Phoenix foreclosure market for about the past year with increasing fascination. I had to see if the deals look as good in person as they do from afar.....so I decided to come down to see for myself.
I have been lucky to come across some very helpful and skillful people down here to guide me through this process. I really can't say enough how good the realtor and some of her contacts have been. And the deals, at least the price the banks is advertising, have been as good as I expected. However, even with great deals and good people, it isn't an easy thing to do. Part of that is by choice. In an age where the amount of information is virtually limitless (local rents, comparable sales, school ratings in district, bank rates, property management agreements, renters rights, demographical statistics etc....) this process can be as complex as you want to make it. And when fear, risk and money are involved, it is hard not to dive headlong into as much information as possible, especially in a market that's not your home.
Yesterday I spent the day with the realtor, Connie, and a guy I met on the plane, Ed. Having selected specific criteria to narrow our search from the thousands of available foreclosures to the ten we felt most promising, we drove to each of them and spent 15 minutes inspecting their condition. Surprisingly, most were in good shape and in nice new, well maintained neighbourhoods. For most of the day we went from house to house in the 100 degree heat with only a quick stop for an In-and-Out Burger. Back at Ed's before dinner, we were able to look at all recent sales, listings and rentals in the neighbourhood before deciding on our top prospects.
Today, Ed and I spent 6 hours meeting with property managers, accountants and bankers to get the exact information we needed to proceed. By the late afternoon we were ready to put offers in on a couple of homes. They are nice places that will be great buys if the banks accept our offers. My down payment will be minimal and there should be slightly positive cash flow, which is really the holy grail in terms of cash flow investing in single family residential homes. Will I get the home? Will it work out? Will it rent? Will the tenants be a nightmare? Will the market crash significantly further? I don't know any of this yet, but I did learn a tremendous amount on this trip. Most importantly I know I gave myself a good chance to make a great investment for my family's future.