MARICOPA PRIVATE LOANS ARE UP 16%. LENDERS ARE DOWN 58.
Maricopa County short-term private loans rose 16% in Q3, but Arizona has 58 fewer
active private lenders than a year ago. Here is what that means for your next deal.
What we have funded since Sept 28: 4 loans, $2.73M
Phoenix (85014): $500K purchase + rehab, single-family
Mesa (85210): $182,750 purchase + rehab, townhome
Scottsdale (85254): $1.345M acquisition on a major value-add project
Scottsdale (85257): $700K purchase + rehab, $355K renovation
Q3 by the numbers: Arizona private lending
Short-term private loans in Maricopa County rose 16% year over year (334 vs 289), and dollar volume rose 23% to $489M.
At the same time, Arizona has 58 fewer active private lenders than a year ago (435 vs 493).
Loans from lenders that focus on flips and ground-up construction fell 22% and 29%.
More money is moving through fewer lenders. If your lender pulled back this year, you are not alone. When you choose a lender now, look at track record and whether they will still be there when your next draw is due, not just the rate.
The flip math is tighter. ATTOM says the typical flip nationally now earns a 21.5% gross margin, down from 27.6% a year ago. That figure is before rehab, holding, and selling costs, which usually run 20% to 33% of ARV. Phoenix has one of the highest flip rates in the country (8.9% of all sales), so you are competing with a lot of other flippers for the same buyers, and supply is rising.
What that means for your next deal:
Base ARV on closed comps. List prices are running ahead of what is actually selling.
Underwrite a 6-month hold, not 4. The typical flip takes 161 days, and Phoenix listings are taking longer to sell.
If your profit only works at full ARV, re-cut your offer price.
Have a deal in contract or closing soon? We are actively lending. Submit it at weare42solutions.com or email devon@weare42solutions.com.
Know someone who needs capital? Forward this email and we will take care of them.
Newsletter Edition #41
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