HOW TO WIN IN TODAY'S MARKET

The Phoenix market is shifting. Not collapsing. Not crashing. Just shifting.

The operators who are adjusting their underwriting are continuing to make strong returns. The ones still underwriting like it is 2023 are struggling.

Here is what we are seeing and how to adjust.

WHAT THE DATA IS SHOWING

Median days on market across Phoenix metro is running around 60 days right now. Inventory is up about 39% year-over-year. Properties are taking longer to sell than they were 12 months ago.

Here is the key insight:

Properties under $800K ARV are repricing by approximately 2%. Not dramatic. But enough that it needs to be factored into your projections.

What does 2% look like in real dollars?

If you projected an ARV of $600K, the market is pricing closer to $588K.

If you projected $700K, expect closer to $686K.

If you projected $800K, expect closer to $784K.

That small shift can be the difference between a strong profit and a breakeven deal. The good news? It is easy to adjust for if you know it is happening.

WHY SMART OPERATORS ARE WINNING

The operators still making money in this market are doing five things:

1. Fresh comps only. Sold comps from the last 60-90 days. Not what properties sold for 6-9 months ago. The market has moved. Your comps need to reflect that.

2. Realistic exit timelines. With median DOM at 60 days, smart operators are planning 90-120 days from listing to close. They are budgeting holding costs and not getting caught off guard.

3. Buying with a margin of safety. All-in cost at 70% or less of a realistic ARV. That cushion is what gives you room to absorb a softer market or longer hold without stress.

4. Aggressive pricing on the back end. When they list post-rehab, they price to sell. Not testing the market or squeezing every last dollar. List competitively and move the property.

5. Strong reserves. 15-20% of all-in cost held in reserves. Breathing room if the exit takes longer or a price adjustment is needed.

Five adjustments. Deals are still working.

PROPERTIES ABOVE $800K: DIFFERENT DYNAMICS

The 2% adjustment applies primarily to properties under $800K ARV.

The luxury segment at $1M+ is behaving differently. Some properties are moving quickly if priced right. Others are sitting 120 days or more. That market is less predictable right now, which means conservative underwriting matters even more there.

HOW WE CAN HELP

When you submit a deal to us, our internal valuation team pulls the most recent comps and gives you a realistic ARV based on current market conditions.

But you do not have to wait until you submit to get that information.

If you are evaluating a deal right now and want a second set of eyes on your comps before you go further, reply to this email. Give me the address, your projected ARV, and where you are pulling your comps from. I will take a look and tell you exactly where I think the number lands based on what the market is actually doing.

No commitment required. Just clarity before you spend time underwriting a deal built on stale data.

We have capital ready to deploy. We are funding deals every week. If the numbers hold up, we want to fund it.

P.S. Markets are always changing. The operators who win are the ones who adapt fast and stay disciplined. If you are adjusting your underwriting to reflect current conditions, you are already ahead of most people in this market. Keep doing what works.