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How to afford Arizona vacation real estate in 2009 – Joint Ownership March 17, 2009

Posted by mkuhbock in Arizona Vacation Property.
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Hi All,
How can someone make a real estate investment in todays challenging economic climate a reality? Well read on to find out! 🙂

We all read the headlines and hear the dialogue about how the economic sky is falling, the bank and mortgage crises, global equity market realignment, the drop in the price of oil and gas and of course the plummeting value of real estate. With all of the bad news maybe we just need to focus on the glass being half full.

Lets focus on Arizona vacation real estate opportunities, although everything mentioned above is also a fantastic opportunity, and why now is one of the best times in history to get into the real estate market.

Metro Phoenix is one of the top ten residential real estate markets that got hit hard by the sub prime debacle and the effects of an over inflated real estate rush over the last 5 years. Today the opportunity to pick up well built, located, and priced properties in Metro Phoenix is abundant. Depending upon areas you can purchase an investment or vacation home for 50 to 60% of what it was valued in the peak of the market.

Great deals but how to afford the opportunity and investment in today’s market when your net worth has taken a big hit?

Unfortunately not everyone has the financial ability to put down $200,000 in cash or take out a large mortgage to leverage the buying opportunities that abound in Arizona, and specifically metro Phoenix.

As I mentioned in a previous post, Joint Ownership is a wonderful vehicle to leverage today’s market and real estate opportunities.

If you get 3 to 5 families together (2 would even work) and work through the proper processes and requirements (identifying needs, wants, desires and must haves) the capital costs of a vacation home along with the monthly operating expenses can be split evenly between the joint owners.

As an example, 5 families split a $400,000 metro Phoenix home (buys you something nice with 5 bed 3 bath, stainless, granite, 3 car garage and pool) then add $50k for any upgrades that might be needed and furniture. Thus you have ownership in a fully furnished vacation home, a 3 hour flight away, for $90,000 all in with a monthly operating cost of around $200.

At the end of the day you can probably never use it more than your proportionate share of 2.4 months a year (spread throughout the year). Now you have an asset that will substantially appreciate over time and somewhere to call home when it is minus 40 in Canada.

Take a look at what less than $400,000 could buy you in the Metro Phoenix market today.

4154 E Laurel Avenue, Gilbert, AZ

The structure of a Joint Ownership investment is easy and I am happy to assist with that if there is a need.

Cheers,

Michael

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Comments»

1. kapearso - March 29, 2009

Sounds like a great idea. As a college student, i have wondered about this way of purchasing a home in Tempe. Is it possible to buy and sell your share in the properties easily?

mkuhbock - March 30, 2009

Buying and selling shares in a joint ownership situation is a little more tricky but if you have the right paperwork and agreements put together up front then it makes either the disposition of the property or a share in the property a lot easier.

Any joint ownership situation requires a user agreement and an ownership agreement, in the ownership agreement there should be a section on the process of disposing of an interest in the property, first right clauses and valuation clauses.

2. Beemie - April 8, 2009

Would joint ownership work in a land trust?

mkuhbock - April 8, 2009

I dont see why not if you take a look at the definition of a Land Trust and why they are used but you would have to review the goals and objectives of all the parties involved and review the options with qualified advisers. http://en.wikipedia.org/wiki/Land_trust


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