Freeman has given you the best advice so far. I’m a successful residential renovator (fix n flips) in Denver (second biggest sellers’ market) and would love to share advice, but we really need to know your long or short term strategy per “buy and hold” (rental), a personal holding you’ll live in, or quick flip. If I were to buy a rental, I’d look at cities in Ohio, Alabama, Arkansas, and Texas. Here in Colorado, the current secret hot spots are Pueblo, Conifer, and Bailey for future growth. Per Phoenix, Freeman might agree that SW Phoenix is going to explode with growth. Also, one good strategy might be to search Craigslist for Wholesalers. They hold contracts on properties that are fixers and/or have very motivated sellers (people in financial, personal, or job related stress). The only drawback is that you must move swiftly on such deals and have your financing in place, and with a lender who is willing to let you take on a fixer. However, many fixers are only cosmetic. No matter what, they will be below market deals! I can help you analyze and acquire any property in any market by showing you the open source online tools that I use, but the key is knowing your exit strategy.
You are absolutely right. SW Phoenix is exploding along with outlier towns like Maricopa and Florence. You are also right in that you have to choose your markets for rentals carefully as well. What we are seeing in Phoenix is that prices are appreciating so quickly that it is difficult to find a property that can be purchased at a price point that makes sense ROI wise. It has gotten to the point that in some areas rents are not able to keep up with appreciating sales prices because the appreciation increases are outstripping increases in wages.