Since Jeff and Jim became “partners” in buying, renting, holding, selling and trading single family homes (SFH) for TheMonopolyProject we have significantly increased our search activities. We’re looking for “The Perfect Monopoly” house. We completed the purchase of the house on 29th Avenue in Apache Junction on the 16th of February. We did the repairs and we’re going to complete the incorrect accounting.

So, now we’re ready for our next deal. We had previously looked at two outlying communities in the Phoenix metro area; Casa Grande and Coolidge, more on that next month. In January, we made an offer on a house, sight unseen, in Casa Grande that was accepted. We put down the $2,000 earnest money and scheduled a home inspection. When we did see it, we quickly backed out of the deal.

Both are growing like crazy because of affordability and both have a different new, electric vehicle factory! Billions of dollars are planned to go into these communities. So, we are going back to Casa Grande to look specifically at new home builds.

Casa Grande has been the “next big thing” for the past two decades. It is located south of Phoenix on the I10 freeway to Tucson, Arizona’s second biggest city. The I8 freeway makes San Diego 5 hours away. But Casa Grande has never taken off.

the population of the city is 55,653 as of 2020. It is named after the Casa Grande Ruins National Monument, which is actually located in Coolidge. “Casa Grande” is Spanish for “big house”. Among resident English speakers, there is no consensus on how to pronounce the city’s name.

But there are now new businesses in Casa Grande:

The City of Casa Grande is the southern-most city in the Phoenix Metropolitan area and is conveniently located midway between Phoenix and Tucson, approximately one hour from each city. The I-8, I-10, and Union Pacific Railroad run through the city of Casa Grande, and the I-8/I-10 interchange is located just south of the downtown corridor providing convenient access to three major freight routes. Over the past two years, Casa Grande has generated significant media attention at the national and international levels with development announcements by:

 

Lucid Motors (electric vehicle manufacturer)

Attesa Motorsports (a 2,300-acre development that will include two professional racing venues)

Dreamport Villages (a 1,500-acre extreme sport themed amusement park)

PhoenixMart (a 1.5 million square foot international business-to-business sourcing center)

These four projects combined are projected to create over 30,000 jobs and represent over $5B in capital investment over the next 10 years. In addition, the Attesa Motorsports venue and the Dreamport Villages are expected to attract over 4 million visitors a year.

 

Casa Grande’s population has doubled since the year 2000, making it the largest city and tax base in Pinal County. Coupled with its rapidly growing economy and industrial sector, there has never been a better time to invest in Casa Grande!

The Lucid Motors plant has been built and work is in progress:

Lucid completes factory construction, aims to ramp up to 400,000 electric cars per year.

You can see a great video of the operation at “First look inside Lucid Motors’ new factory in Casa Grande, Arizona”.

The first phase of the factory comprises 999,000 square feet of space, with the goal of eventually expanding that to a whopping 5.1 million square feet by 2028. The next phase of construction will begin in early 2021, Lucid says. Initially, the factory will have the capacity to produce 30,000 vehicles a year, with the goal of eventually getting to an annual capacity of 400,000 vehicles.

Our strategy is to concentrate on hew home builds. There are financial and non-financial advantages to a new home versus an existing home:

  1. Financial1: After qualifying for the loan, you only must put down the earnest deposit. In the meantime, the house that is being built appreciates in value. Typically, the new home builder raises the prices of the houses as the development is built out. So, it is best to be first in line, buy at the beginning of that development.
  2. Financial2: The new home builders offer incentives if you use their services such as lenders and title companies. The question is whether you are really getting a good deal. We plan to have out loan agent Brian Szabo shadow the purchase to see how good a deal we are getting.
  3. Non-financial1: The home will be move in ready. No need for repairs.
  4. Non-financial2: We can “watch” the house being built. Jeff is an expert at this since he was VP of new home for KB when he first started in real estate.

A new build house in Casa Grande would not be ThePerfectMonopoly house since it fails criteria #3. But it meets or exceeds the other five criteria.

  1. 3 bedroom, 2 bathroom (3br2ba)
  2. Great neighborhood
  3. Good in-metro area location with excellent freeway access
  4. Small lot size, minimal landscaping, no swimming pool
  5. Move in condition
  6. Low (cost) HOA; with excellent amenities

The reason #3 exists is during a downturn in the economy, the outer areas fall first and hardest. That’s the risk we’re taking and offsetting, we hope, with the potential for Casa Grande to be ‘the next big thing’ in the Phoenix housing market.

Jeff and Jim discuss these issues and others in their strategy session:

 

 

Here is a map of new home builders currently in Casa Grande. There are lots of choices. Before we go down there, we need to narrow our choices.

Next month, we’ll return to the other outlying community, Coolidge, and tell the story of electric trucks by Nikola, a Tesla competitor, that is backed by General Motors. Note that both Nikola and Tesla are named after the same man; the legendary inventor Nikola Tesla, competitor to the other legendary inventor, Thomas Edison. Tesla and Edison engaged in a “War of the Currents” where Tesla favored AC (Alternating Current) and Edison favored DC (Direct Current). As part of the war, Edison designed an electric chair to disparage AC.

In the 1970s all was forgiven when Tesla and Edison’s grandsons jointly started the rock and roll band: AC/DC

Is there a worse way to die than in an electric chair listening to AC/DC?

Well, I made up that last part. But the rest is true.