Zodiac Rentals

Sometimes the temptation of an overlooked street in a hot sub-market is a siren call too strong to resist. Sadly, I speak from experience. With the Phoenix real-estate market on a roll in late 2013, it had become increasingly difficult to find fourplexes in my preferred price range. Not surprisingly, when a perfectly priced one came back on the market, I chose to ignore the obvious problems with the street it was located on focusing instead on its excellent submarket - spanning ASU in Tempe to the Riverview Cubs Spring Training Stadium in Mesa - and the fourplex’s close proximity to the increasingly popular light rail.

The street was one of those shabby streets dotting the North-side of Main St between the Tempe Trail Canal and Dobson. This narrow stretch of Main has it all - shady motels, liquor stores, RV parks, tire shops, high foot traffic, and payday lenders. A perfect sight for any prospective tenant! Turn onto the off street and things get even more welcoming - broken booze bottles, syringes, abandoned mattresses, couches, flipped over trash cans, a junkie or two on their BMX bikes, and if it were your lucky day, may be even a hooker. 

The fourplex itself wasn’t in terrible shape needing mostly cosmetic improvements but two balconies and the staircases needed some structural reinforcement. The bigger challenge was convincing tenants to move into the neighborhood. Most people complimented the interiors and the fourplex but expressed skepticism about the neighborhood. However, as time passed, the city and especially the police department started to take greater interest in these neighborhoods resulting in an appreciable decline in criminal-like behavior. Helping us secure slightly better quality tenants, especially out-of-towners.

Luckily, the Phoenix fourplex market really found new highs in 2015-16 as fears of a rate hike prompted several investors to acquire fourplexes locking in low-rate residential financing. Given the relatively excellent condition of the fourplex and the positive trajectory of the neighborhood with the light rail’s success and ASU’s expanding footprint coupled with low fourplex inventory, gave me an opportunity to exit the property at a price higher than anticipated. Truly, an unexpected happy ending.