Trying to Invest in Las Vegas.. Roadblocked my Future Father in Law

10 Replies

Hello, 

My future father in law bought a property in 93 which is an 8-plex in LA for around 300,000

He owns his own home currently ( beautiful home)

and owns a rental also ( I don't know when he purchased this)

He also has a real estate license ( he isn't an active realtor, he is retired and just invest in stocks now)

He believe california for the place to purchase property because you can see and feel it.

I am trying to convince him that just because its out of state, doesn't mean it can't be successful.

He says that unemployment is higher than anywhere else in the USA

California and Nevada are both around 6.7-7.1% 

He says thats because obviously the population is much higher in california so its not comparison 

He believe with the indian reservations in california, it will turn vegas the unpopular place to gamble and all of the las vegas community is fueled by gambling and entertainment. 

If we go into a recession then obviously people will move from there just like what happen with the last recession.

Are their business big businesses moving to Nevada to help fix this issue?

I know Tesla is moving here, but northern nevada, will that help Las Vegas with growth potential.

He mentioned that most investors are going to Texas, which I know many of my clients invest there..but that kinda goes against his argument with seeing and feeling. I can easily make a trip to vega.... Texas not so much.

He also mentioned that with all the building out in vegas it will make homes like the one I'm interested in become  "The Ghetto"

How is sunrise manor near el dorado park? 

Is it the Ghetto?

Would it be considered A.B,C ? or even D? Class

Is there anything I have to fight my case or is this a lost cause?

Any Articles that can help me? Ive linked him a few but he says they are bias because they are Nevada written. 

I am in a similar boat, not with a father in law though. Most CA people are telling me to stay local, RE wealth is made on appreciation, not on cash flow and forget about LV, too much boom and bust. But there are some very compelling arguments in favor of LV. low taxes, favorable landlord/tenant laws, better price to rent ratios. What it seems to come down to for me, is predicting the future....

1- if you choose CA over LV, will prices continue to rise enough to buy now and sell down the road to eventually have enough cash/capital to lower or eliminate your mortgage so that wayyyyy down the road you can retire and live off rents. Because unless you are coming to the table with over $1MIL in cash, nothing will cash flow well in A, B class properties. You can find C, D class and play in that market with a lot less money

2- if you choose LV over CA, will rents be stable enough in the long run that you can keep having that renter pay down your note and also put some money in your pocket. LV is a cash flow play today vs appreciation. I think...

message me and i will send you some links that a local LV real estate broker/investor sent me. And sunrise manor is C class for sure. rents are $400-500 for 1beds.

Your father may or may not be a little closed minded, but.....obviously you haven't done any real research on an area your interested in.  First suggestion, get your butt in the car, drive to Vegas, spend a couple of days at least, looking around.  How can you build a case, or come to a conclusion, otherwise?

I really like a site called. city-data.com, type in the zip code and it will give you every demographic you are interested in. 

The Indian casinos already make as much or money than Vegas. Last i checked they were closing in but it cpuld have changed.  That said Vegas will always be Vegas.. Indian casions never willl im T

I'm pretty familiar with LV, i go a handful of times a year and have friends there so I have looked into it various times. 

After much due diligence said nope no way no how and kept putting money in the stock market instead. 

I was just there in January this year and they are building like mad. Just drive out to lake  las vegas. Ho!y shiiite!!!!!    

New houses are selling for dirt cheap. What does that tell you? I know what it tells me. 

From our perspective(biased of course since your future in law can't trust anyone in NV with boots on the ground), Vegas has historically been good for single family rentals because of the transient nature here. Folks will move into town, be here 2-3 yrs and leave. many reasons but a couple are the airfare base, casino jobs, construction, etc. A great indicator is the vacancy rate for home rentals, today we have 2.75% vacancy in Tradewind, 11 out of 400+. Time on market is running about 2 weeks to locate qualified tenants. In the summer while schools out, we have homes rented before they are vacant.

Originally posted by @Tiger M. :

From our perspective(biased of course since your future in law can't trust anyone in NV with boots on the ground), Vegas has historically been good for single family rentals because of the transient nature here. Folks will move into town, be here 2-3 yrs and leave. many reasons but a couple are the airfare base, casino jobs, construction, etc. A great indicator is the vacancy rate for home rentals, today we have 2.75% vacancy in Tradewind, 11 out of 400+. Time on market is running about 2 weeks to locate qualified tenants. In the summer while schools out, we have homes rented before they are vacant.

Whats your opinion of MFR in LV vs SFR?

Why do you have to convince your FIL of anything?  Why don't you just do what you want?  Or are you wanting him to invest with you?

What people fail to consider, is that there are many affordable areas in CA with strong rental markets.  In fact, the lower COL towns, will have more renters, in my opinion.  And the upside to owning property in CA, is that no matter how much your property appreciates, your tax will always be based on the purchase price.

Check out other areas of CA.  Shasta County, Tehama County, etc.

I lived in a small mountain town in WA, and there were not enough rentals in the area.  Supply did not meet demand, and I'm talking a town of 200 people - with a forest service station.  There were a lot of seasonal workers, but there were also year-round people who had to rent in another town and commute - and we're talking in ice and snow for a good part of the year - because there weren't enough rentals in that little town.

Don't write off CA without doing your research.  Find an affordable area with a demand for rentals right here in CA and then talk to your FIL :-)

@David Schach there are 3 classes. Our zoning created pocket clusters.  If your under 50 units, plan for a grind. 50-100 don't over pay. 100+ need to be deemed A+ units in great desirable locations. Can you make money on a 12 unit at Carey and belmont, yep. Are you going to earn every penny, absolutely!

Now if your are forward thinking, look at the downtown area that is regentrifying. There are great tenants but they want fully rehabbed units with good neighbors. Focus on arts, entertainment or business districts bordered by Maryland, I-15, Wyoming and US 95.

I would do all my research figure out what's best for me and my future wife. That being said I would also listen to the wisdom from what sounds like wise investor and might know a thing or two and has found his niche

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