The Best Market in the West

Background

Kelvin and his investment partner didn’t plan to sell their highly profitable Scottsdale STR. But when the right offer came in from an unsolicited buyer, they seized the opportunity.

With dry powder on hand having sold at the peak of the post-COVID housing market (in one of the hottest markets in the country), Kelvin wanted to 1031 his money into more STR properties in the region.

And there was one in particular he wanted to try out next.

Opportunity

Kelvin had heard Sedona was one of the best STR investment markets in the country due to low supply and access to recreation like the Grand Canyon, Flagstaff ski mountain and local hiking.

Kelvin was ready to buy if he could find the right property, but he had a problem.

Challenge

Having studied finance and spent his career in banking and asset management, Kelvin has always had the skills to analyze and underwrite his own deals. But a promotion and increased workload just before his Scottsdale sale meant he no longer had the time.

Kelvin wasn’t willing to lower his underwriting standards and open himself up to risk.

He found Aircalc through a friend and hired us to complete a market analysis with an included comp set to help inform his investment decision.

Solution

Market Analysis

Kelvin wanted to get a feel for the market overall - to see if what he heard about Sedona was true and if so, where he could find the greatest opportunity. Kelvin’s Aircalc Market Analysis report helped him pull the following insights before investing:

• Smaller Units Outperform Larger Units a per BR basis
• Seasonality is Incredibly Low, Expect 70%-75% Occ Year Round

Analyze Competition

Kelvin knew he would target the 3-4 BR range, staying away from the underperforming larger properties but big enough to 1031 all his sale proceeds in just one or two deals.

He used the raw comp data and listing links to analyze top 3-4BR STRs for common trends:

• Views of the Red Rocks is #1 Priority
• Pool Increases Returns Substantially
• Hot Tub Even Moreso

With the report in hand and these insights gathered in under a week, Kelvin felt ready to identify his next STR investment property.

Outcome

Less than one month after Kelvin sold his Scottsdale property, he targeted and secured a 3BR home with a pool, hot tub and expansive views of the Sedona Red Rocks.

One-Time Fee, Multiple Opportunities

With some funds remaining and time remaining to close on another property using his 1031, Kelvin continued his search.

A property came to market that didn’t have a pool but did have even better red rock views than his first acquisition.

Knowing that 3 BR properties with views in this neighborhood were some of the best in the market, Kelvin made the call and secured property #2 in his quickly growing Sedona portfolio.

Aircalc’s market report gave Kelvin what he needed to narrow in on his target:

• Big enough to move his 1031 quickly (1-2 transactions)
• Not an underperforming 2BR or large-format +5BR, target 3s and 4s
• Expansive views of Sedona’s red rocks
• Pool and hot tub when possible

Kelvin is currently looking for property #3 a little less than a year after making his first two transactions. He is using the same report he initially ordered, paying attention to macro trends and making educated assumptions to adjust projections where necessary.

Testimonial

“Without Aircalc I couldn’t have come up to speed on the Sedona market as a whole, even half as fast as I did. The high level knowledge was critical in focusing my search and the data from the performance percentile tiers was more than enough to allow me to find and close on my properties.”

‍

‍

‍

‍

‍

‍

‍

‍