Scottsdale AZ Real Estate | Bill Duffey | REMAX | Carefree, Cave Creek, Paradise Valley and North Phoenix - Homes, Land and Commercial PropertiesRE/MAX Excalibur REALTOR®Bill Duffey, Scottsdale AZ |
| Investments If you are looking for investments in any real estate, please give me a call today. This is a fast-moving market and changes daily. WHAT IS A CAP RATE? A key stat is the "cap rate," which is a percentage based on the annual rents you can collect, minus expenses, versus the property value. For a property that costs $100,000 dollars and generates $650 per month in rent minus $250 expenses, the cap rate would be nearly 5 percent ($4,800 divided by $100,000). A cap rate of 5 percent or more should provide enough cushion to offset expenses. The lower the home price compared with the rent, the higher the cap rate. If the numbers add up to positive cash flow, then it's a profitable time to buy. The same applies to Commercial property. RESIDENTIAL INVESTING Click here for Home Values in the Valley of the Sun (new 11/2005): http://www.realtor.org/Research.nsf/files/Phoenix.pdf/$FILE/Phoenix.pdf
Commercial Investments The newest and best investments are in what used to be an investment strategy of many years ago. Well, everything comes back around. I work with several Business Condo developers. To give you an idea of how fast these are flying off of the market, most are 85% pre-sold prior to construction! These are very profitable for investors with a 9% CAP rate, plus percentages on retail operations. Here is one example: I have a developer who was already sold 40 business condo projects with several 5000 sq. ft. business condos in each project in just the past couple of years, with 40 more projects in the development stage. These are perfect for 1031 Exchanges! All are sold and leased up with very few resale's! Occupancy costs for tenants are running $6.25 - $7/sq. ft. These Condo's are selling in the Valley from $140/sq. to $210/sq. In Scottsdale, the rates are from $170 - $200/sq. Buy more than you need and lease the rest, but don't forget about the 51% rule if you are financing. Banks are lending at 90% and 100% if all of the banking business is with them. Hard to miss, on this deal. SBA is back lending again and are doing 90% deals, but don't forget that these are front-loaded at 10% down, and with another 3%. Prepay penalties start at 5% and reduce 1% each year. Give me a call, today! Residential Investments Now is the time to get those rental properties, especially in Scottsdale and North Phoenix! I have several clients who buy-to-rent, and seldom have vacancies! Rental acquisition run from $200k to as high as you like. Rents in North Scottsdale are very high! I have service companies that manage your properties for you! Call today for more information. |
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