This is a bit dry but vital if you are interested in buying investment properties in Sedona or anywhere in Arizona. This is concerns Arizona law so be sure to speak to an attorney if you have any questions.
Cable TV has several reality TV shows that feature people fixing and flipping (selling) homes in a short period of time. Hopefully for a profit. Arizona has some stringent requirements though that you must adhere too. If you rent investment properties or fix and flip, the same Arizona laws apply.
The Arizona Revised Statutes (ARS) are the state laws. The part that pertains to fix and flip or owner builds is below. Note the link to the actual Arizona statute.
§32-1121 Persons not required to be licensed; penalties; applicability
A. This chapter shall not be construed to apply to:
5. Owners of property who improve such property or who build or improve structures or appurtenances on such property and who do the work themselves, with their own employees or with duly licensed contractors, if the structure, group of structures or appurtenances, including the improvements thereto, are intended for occupancy solely by the owner and are not intended for occupancy by members of the public as the owner’s employees or business visitors and the structures or appurtenances are not intended for sale or for rent. In all actions brought under this chapter, except an action against an owner-occupant as defined in section 33-1002, proof of the sale or rent or the offering for sale or rent of any such structure by the owner-builder within one year after completion or issuance of a certificate of occupancy is prima facie evidence that such project was undertaken for the purpose of sale or rent. For the purposes of this paragraph, “sale” or “rent” includes any arrangement by which the owner receives compensation in money, provisions, chattels or labor from the occupancy or the transfer of the property or the structures on the property.
Arizona has a 'handyman provision' that allows unlicensed individuals to conduct some work. They can't do work that is permanently fixed to the structure. They can't do work that requires a permit. Materials and labor cannot exceed $1000.
9. The sale or installation of finished products, materials or articles of merchandise that are not fabricated into and do not become a permanent fixed part of the structure. This exemption does not apply if a local building permit is required, if the total price of the finished product, material or article of merchandise, including labor but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two-pronged or three-pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening devices to the frame or foundation of any residential structure, is more than one thousand dollars or if the removal of the finished product, material or article of merchandise causes damage to the structure or renders the structure unfit for its intended use.
If you're fixing up a property and you live in it for a year, you should be fine. If you aren't going to live in it for a year then we recommend using a general contractor to oversee the project. At a minimum, use licensed contractors and provide the names of those contractors to the tenants or buyers of the property.
We help many investors make money buying and selling Sedona investment properties, including the Verde Valley communities. Give us a call if you'd like assistance in identifying investment properties in the Sedona area. 928-301-4949