I have some investor buddies in Arizona. I used to be a real estate appraiser (don't ask
) so I would see rookie investors lose their shirts and end up in the red after the sale because they either spent too much on the rehab or they didn't do their homework and got stuck with a property they couldn't move so they eventually end up selling it at a loss.
One thing you might want to consider in Arizona is manufactured housing, the demand should be good because #1 it's the South and #2 higher rural population than in a lot of other states. I have a buddy in Dallas that kills it refurbing manufactured homes because manufactured housing depreciates faster than site built (regular) houses. That means that if they are in bad shape you can pick them up really cheap.
Manufactured houses are easy to refurb because all of the materials are pretty standard across the manufacturers. For the price of one foreclosed site built house you may be able to purchase two or even three manufactured homes. Get a deal on the materials/labor because you are doing volume. You can get leads from rural title companies, take them donuts and promise them you'll use them on both transactions.
The best part is that the manufactured housing market is largely ignored by investors, there is a social stigma attached. My buddy used to get snubbed by other investors for dealing in "trailers" but as an appraiser I could see where he was laughing all the way to the bank. He typically made 30 or 40% more money on each house than the other investors who dealt strictly in single family site built houses.
I should clarify that I'm not talking about mobile homes. Actual "trailers" or homes that are still technically movable aren't real estate and are usually a bad investment. You'll want to look only at manufactured housing that has been converted to real estate by being attached to a permanent foundation where the lot is included in the sale.
That's my 2 cents, good luck
