Ahwatukee Living’s Ask the Experts

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Thinking about investing in real estate?

So you're thinking of investing but don’t know where to begin. The first thing you want to try to determine is the type of investor you want to be. Generally there are three main models.

1. Buy and hold (long term)


2. Buy and sell (fix and flip)


3. Foreclosure and Pre-Foreclosure

Over the course of several years, the realtors of The Ross Cobb and Marty Recht Real Estate Group have worked extensively with all three types of investors. Not surprisingly, we have found many similarities from investor to investor.

Fix and Flip or Foreclosure Investing

Generally, successful fix and flip and foreclosure investors are cash heavy and act quickly when opportunities present themselves. In our current market, if you are aspiring to be a fix and flip or foreclosure investor, we recommend you have significant cash leverage. The main reason for this is because of the competitive nature of this market. With the recent exposure that real estate as an investment has received, there are more investors in the market with more cash – heavy competition. Competition will drive up sales prices and cut in to the investors’ profit margins. This is the simple economics of supply and demand. In addition, the resale market is very hot which translates into easier and higher priced sales in the open market for distressed properties. With all this said there is still a market for this type of investor. Your key to success in this arena is partnering with the right real estate firm. When talking with agents, ask for specific performance data with this type of investment strategy. With 40,000 real estate agents in Arizona, you can’t afford to make the wrong choice. Do your homework.

Buy and Hold

The buy and hold strategy is based on cash flow and equity growth. Many investors fear vacancies with this model. We have found that vacancies are minimized when the property selection is sound. Important factors in assessing the viability of a property include appreciation rates, area growth, builder quality and reputation, rental rates, style of home, age of home, resale or new and various options in mortgage programs. With vacancy rates in some parts of the valley reaching as high as 25%, buying the right property is paramount. We have validated this by assessing our current property management division, investor inventory, and our current vacancy rate. We currently run at less than 5% vacancy rates, and investors are enjoying a healthy appreciation gain. As experienced investment specialists, we attribute our investors’ success to property selection, marketing, and tenant screening. Please remember to do your homework before buying any property, and the best way to get assistance is by consulting a real estate professional to help you through the process. We encourage investors to interview agents or companies and view their tenant and investor programs.

It’s an exciting market out there and opportunities are on the table. You just need to know where to start!!

This article was written by Ross Cobb and Marty Recht of Keller Williams Realty. For questions regarding this article call their office directly at 480-449-6670 or email at jennifer@rossandmarty.com

Posted on July 6, 2004