Rooming houses in Phoenix look simple on paper until you try to find one where the paperwork matches the walls
Four months in and I still have not closed on a single door, which is embarrassing to type, but the reason is specific. I am hunting rooming houses, per-room rentals, anything where multiple tenants share a building and each room generates its own rent. The pitch on this strategy is obvious: more income per square foot than a conventional fourplex, tenants who are harder to lose all at once, and price points that do not require a portfolio to enter. That was the logic going in and I still believe it. What I did not expect is that finding a deal where the city license, the current rent roll, and the actual floor plan count the same number of rooms has been nearly impossible in the Valley. I have looked at six properties in four months. Every single one has had a mismatch somewhere. One place was licensed for seven occupants but the owner was collecting rent on nine. Another had a rent roll showing five paying tenants but the city had it permitted as a single family residence with an unpermitted addition in back. My GC walked through a third one in Mesa and found a bedroom that shared a wall with the water heater in a way that almost certainly fails occupancy code. He said he sees this constantly in older stock out here. So now I am sitting on a hard money commitment I cannot use because I refuse to buy a licensing problem and call it an investment. Wondering if anyone else has hunted this product type in Maricopa County and whether there is a part of the market I am not looking at.
