# Positive Cash Flow Rental Properties (Investment Real Estate In Phoenix, AZ) Avondale



## Jordo37 (May 11, 2016)

Hi there,

I would like to thank you for having me on your forum.

The question I have pertains to investing in real estate in Phoenix, AZ, USA. (Positive Cash Flow)

I'm a Canadian living in Metro Vancouver, BC and am interested in investing in some positive cash flow properties in the Avondale area of Phoenix, AZ as you can get more house for your money in Avondale and it's still very close to Metro Phoenix ... it seems like a very nice up and coming neighborhood. It's my understanding as a Canadian I need to put up a down payment of at least 30%. Anything over 20% down and you do not need the mandatory mortgage insurance so I can avoid paying this (I already have private life insurance protection).

I guess I'm more or less trying to connect with others who are investing in properties in the USA (doesn't have to be the Phoenix area) and are getting a positive return after their renters are paying their mortgage, HOA fee, property taxes, and property management fees.

Obviously it will depend on the interest rate (higher for non-residents) and the down payment but my realtor down in Phoenix says it's very realistic to be able to get a positive monthly cash flow per home of about $200 to $300 at a minumum provided I put down more than 20% and the interest rate he stated was 3.8%. He also said go with fixed mortgage NOT variable so I will always know what my monthly payment is and even if rents go down I can always at least cover the mortgage and other associated expenses. Essentially having my renters pay off my mortgage for me.

Are there any other associated fees I'm not considering?

What I'm thinking is to invest in real estate down in Phoenix as for $200,000 (putting $40,000 down on each property) I could have 4-5 houses being paid off by my renters instead of having 1 house being paid off here in Canada (given the average house in Metro Vancouver is $1,000,000 or so where as the average house in Avondale is $200,000 or less even). The house in Canada would just be covering the mortgage and there would be NO positive cash flow so really not nearly the leverage I could have in Phoenix. If I had 5 properties with each $40,000 down that would allow me say even $200 positive cash flow per property x 5 properties that would be an extra $1,000 a month I could use to invest in another two properties. And on and on and on it goes. It's doable in the USA still and with the prices in Canada it just isn't.

How does it work in terms of being able to be considered a legal resident in the USA when owning multiple investment properties? I know they do consider investors to be more able to be a legal resident than non investors.

I want to do everything above board and be onside with all US laws as the last thing I want is any trouble.

If any of you other Canadians are out there and investing in US properties for positive cash flow lets connect!

Thanks in advance for your insights and views!

J


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## Henkel71 (May 20, 2016)

*AZ rental property*

Hi, just wondering if you were successful in securing financing in the US as a Canadian investor to buy a rental property? I for one was not. I own a couple of investment properties in Arizona, that I was able to finance using my Canadian bank line of credit, after all American ones said no. Also, you will have to use a local property manager - and it would cut deeply into your profit margin from the cash flow perspective. I am a somewhat experienced landlord (also from Vancouver), and owning properties in a far away place, even as lucrative and affordable as Arizona, can be a nightmare if you do it remotely. But nonetheless, in terms of cash flow (cap rate) its incomparable to the rental returns here.

best,

H


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## Just a Guy (Mar 27, 2012)

What happens to your cash flow in 5 years at mortgage renewal time if the interest rate rises say 1-2%? Now you have 5 underwater properties. Also, you need to worry about local area issues such as termites which aren't a concern in Canada. 

Remember your primary "advisor" makes his money from selling properties. He doesn't care if you make money, if you don't he get to sell it again and make money. Some of those areas in Phoenix are basically full of empty houses, built during the boom, from what I've heard, there can be very low tenant demand and high crime.

There are of course tax issues to worry about as well.

Just some initial thoughts of course.


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