I live in Las Vegas as well. I paint a bleak picture because that is the case, though I am bullish on Las Vegas long-term. We have met and you come across as an intelligent and sincere guy but as the owner of a real estate business you are going to have a natural bias.

 Houses are being sold because prices have dropped to 2003 levels. This also means that many of those who purchased after 2003 are now upside down which only exacerbates the problem.
 REO inventory is decreasing. However, the foreclosure moratorium has been lifted and we will be seeing an increase in REO inventory nationwide as the pace of foreclosures picks up again.
 Unemployment is officially at 10.1%, however this only includes people who are receiving benefits. The real number is much higher and the competition for job openings is fierce.
 Population in Clark County has decreased for the first time in 23 years. Fewer people equals lower demand for housing.
 To say City Center has “some issues” is a gross understatement. Major defects cause the size of the Harmon hotel to be drastically reduced. A report last week outlined many unresolved problems. From the Review Journal: Felix Martin, a forensic structural engineer based in Southern California, makes his living analyzing data for and testifying in construction defect lawsuits. Based on his experience, he believes City Center’s unresolved rate should be no higher than about 10 percent. “I’m concerned about the sheer magnitude” of unresolved discrepancies and missing approvals at the City Center project, Martin said after he reviewed the spreadsheets in which the Review-Journal dissected the City Center logs.
 Gaming companies are massively over-leveraged with many on the brink of insolvency. There have been many layoffs in the industry and it will get worse before it gets better.
 Many people have touted how Las Vegas would always survive because of convention and tourism business and the influx of foreign visitors. Many businesses have scaled back conventions or cancelled them altogether. Tourism is down and those who do come are spending less. Foreigners are feeling the effect of the recession and cutting back as well. One room service manager that I know who works at a major hotel says that his room service business is 40% of what it was a year ago. That is a huge drop
 People in the real estate industry have been crying “bottom” for over two years now. The truth is that nobody knows where the bottom really is and we won’t until it has passed.
 We also have a state legislature that spends money like a bunch of drunken sailors in good times and then cries the blues when they have to cut back spending.

I don’t pretend to know what the answer is. However jobs are the key to any recovery. We have already lost Echelon Place, we can’t really afford to lose any more. There is already a fear that these new resorts are not going to create any new dollars, just take existing revenue from other properties.

Do I paint a bleak picture? Unfortunately yes, I wish it wasn’t so but playing the spin game doesn’t change things.

Most of the cities that occupy the list for most foreclosures are seeing their inventory increasing, however; in Las Vegas our inventory is decreasing.

Project City Center has had some issues but is still on pace to be completed at the end of the year. The unemployment rate is pretty high but most of the increase can be attributed to the loss of jobs in the construction industry. In the last 8 years, we saw an influx of people moving here for construction work because of all the projects coming online. Many have left the state but are still collecting unemployment.

One of the biggest problems Las Vegas faces is diversifying its economy. We rely so much on gaming and tourism revenue and this is the first time since maybe the early 80s that we have seen a drop in revenue from gaming and tourism. Not sure what the answer is but I am sure we will find a solution in the near future.

Tony Sena’s last blog post: Las Vegas Loan Modification Frequently Asked Questions

Before 2008, as a Tenant Buyer, if you had a 12 month lease with and option, you paid you lease payment on time, your income, D/I ratio was reasonable, length of job reasonable, credit payment reasonable, you most times as a RE Investor could forecast that the Tenant Buyer could get financing for that house.

Now, with the 1) government intervention of Government Mortgage Agencies 2) lenders spooked and not lending, 3) appraisers using REO Sales for comps (short sales completed), regular consumers from the middle class can not count on mortgage banking being reasonable.

What I offer on a Rent to Own is the Tenant Buyer has:
- 36 months to get the house
- the Sales Price is tied to a new appraisal at time of exercise; no one gets screwed
- if the Tenant Buyer rents from me for 36 months, but GETS DENIED for a mortgage, and he – she obeys the lease, keeps the place tidy, allows reasonable inspections, etc, they get their option money back IF they move out and leave the place rentable, and….
- if he – she chooses, a Private Financing Instrument (e.g. Agreement for Deed, Wrap – AITD, etc) with another 36 month term, and a balloon payment will be offered if they choose to stay in the property. All Option payments will be credited to a new sales price.

If the REI reassures the Tenant Buyer that even if they do not get financed, you have THEIR HOME FINANCING SOLUTION, the REI will generate word of mouth that the REI is reputable.

If the REI needs cash, the REI can always sell the Lease Option House to a Retirement Investor from a Self-Directed IRA. The IRA can borrow 70% with 30% down from the IRA.

To minimize tax, it is always advisable to wait 366 days to get a 15% tax rate on the gain of the sale.