A few months ago we did a similar story on an investment home that went through our 4 step investment process.  We've done quite a few of them before and since, but this time it's a condo in Central Phoenix.  

It is good time to buy real estate for the long run, rental real estate that is.  I have no doubt on that.   It's an extraordinary time and when the market improves so people will desaturate living space: now many families are doubled or tripled up and they won't be once the economy increases in momentum. 

We've always worked with many investor, probably, because we are ones as well, it's no different now.  The evolution of our brokerage service led to our "4 point investment process - many times utilized in 3 parts" Read more about it the Four Course Process.

Basically it involves the entire process from locating an investment property to preparation/consultation, finding a tenant helping find management.

The subject property is a condo in Central Phoenix, specifically along the Camelback Corridor a major artery in Phoenix with easy access most everything desirable to residents, and especially those who will occupy a condo: more mobile persons preferring an urban lifestyle.

The Central city is one that is developing and evolving despite the slow economy so when it does improve so will the value and the rental rate of this condo.

It was purchased as a lender owned property.  The condo was in decent shape, but it needed new flooring, painting and some customization to make it stand our from the crowd.  Most of the expense would have been made anyway so why not do it right. 

Please watch the video to see what we did, but in short, carpet was replaced with wood panel floors, the walls were painted with neutral, but attractive colors including some accent walls. 

The kitchen, once a plain boring line of basic cabinets, got juggled around by staggering the cabinets and adding crown molding. 

Then of course proper marketing, a sample of which you can see below.

( www.CamelbackCorridorCondos.com )

The price of the acquisition was $89,000 with and additional $4,700 for remodeling plus $3,000 in closing costs.

20% down-payment of $89,000 purchase price from original $275,000.

So how do the numbers work out?

It's difficult if not impossible to predict the future so the long term return in the IRR we utilized a below average historic return excluding the quick rise in 2003-2007, but here is a one year APOD (annual property operating data) results and a quick overview of a 10 year hold.

APOD w/debt

• Income $12,600
• Expenses ($3,906)
• Debt ($4,851)
• Cash Flow $2,800
• Principal Payments $959
• (all first year excluding capital expenses)
• Financial Indicators (2nd year)
• Cap Rate 9.06%
• Cash on Cash 9%

IRR* (Internal Rate of Return) 26.85% (per year) over 10 year hold with 5% annualized appreciation (before tax)

Our goal is to provide the kind of service you'd expect from Realtors that take this business seriously that make it a profession.  We work to fulfill your goals because in life most goals are mutual, so we do our part for all involved parties.  Read what some of our clients are saying.

Would you like to discuss options or do you have some questions. We prefer a call to e-mail: Artur 602.628.4349

(*IRR = "is the rate of return produced by each dollar for the amount of time that dollar is in the investment." = more on IRR at wiki.)