Las Vegas???

Buying & Selling Real Estate
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Las Vegas???

Jamal Harb
vancouver, bc · Member since 2013 · 9 posts · 2 votes

From a real estate fundamental perspective! Real estate in Vegas falls short on a few elements. However, I HAVE BEEN HEARING that there are great cash flow deals right now. Has anyone invested recently in Vegas and what are your thoughts? Thanks,

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Tiger M.
property manager · Las Vegas, NV · Member since 2012 · 502 posts · 171 votes
13y

Richard Chang there also several things are going to cause the Vegas market to continue to increase and appreciate. Harry Reid appears to be involving himself in the discussion for AB 284 that would continue keeping the banks from foreclosing on properties. As a result of his involvement we anticipate a continued shortage of inventory. There are literally billions of dollars worth of construction projects that are funded and breaking ground which are going to cause a huge influx of workforce tenants. This will keep both grants robust and sales prices increasing. Another factor is the new home construction. The finished lots that were foreclosed on or bankrupt have all been absorbed and constructed by the new homebuilders. They now are being required to buy land at a price of about $200,000 an acre and then spend an additional $35-$45,000 in site development. Based on densities of eight units breakers this will increase the cost of each single-family home by a minimum of $50,000 per unit. Resale homes always always always follow the prices of new construction.

That being said we still have headwinds that I think we're to face in the form of potentially rising interest rates, and overall instability in the stock and bond markets.

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  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    13y

    Depends upon what your version of great cashflow. Two years ago there were awesome deals. Now it's much different. A $150,000 house will likely rent for $1100 depending upon the location.

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  • Richard Chang
    Renter · Alhambra, CA · Member since 2009 · 133 posts · 5 votes
    13y

    Hi all,

    I see very large price increases this year in Summerlin and 89117 zipcode. Those 150K+ houses are now > 220K now and $110-125sf

    Hope some of the Pros can weigh in on if this is a "bubble" or not.

    Multiple all cash offers by investors has churned the market upward. Sellers don't have to fix up or do anything to sell properties.

    Rich C

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  • Tiger M.
    property manager · Las Vegas, NV · Member since 2012 · 502 posts · 171 votes
    13y

    Richard Chang there also several things are going to cause the Vegas market to continue to increase and appreciate. Harry Reid appears to be involving himself in the discussion for AB 284 that would continue keeping the banks from foreclosing on properties. As a result of his involvement we anticipate a continued shortage of inventory. There are literally billions of dollars worth of construction projects that are funded and breaking ground which are going to cause a huge influx of workforce tenants. This will keep both grants robust and sales prices increasing. Another factor is the new home construction. The finished lots that were foreclosed on or bankrupt have all been absorbed and constructed by the new homebuilders. They now are being required to buy land at a price of about $200,000 an acre and then spend an additional $35-$45,000 in site development. Based on densities of eight units breakers this will increase the cost of each single-family home by a minimum of $50,000 per unit. Resale homes always always always follow the prices of new construction.

    That being said we still have headwinds that I think we're to face in the form of potentially rising interest rates, and overall instability in the stock and bond markets.

    6Reply
  • Andy Chu
    Involved In Real Estate · Las Vegas, NV · Member since 2010 · 341 posts · 86 votes
    13y

    I hear this AB 284 come up over and over. First off let's not blame the person from the opposite party. AB 284 was written by Conklin, Horne, and Kirkpatrick. This is an assembly bill and not a senate bill. In my opinion, AB 284 may have some effect on the market, but how does that explain Ariziona, Florida, California, and other Western states with huge price appreciation. This has more to do with hedge funds such as Colony Homes, Blackstone, and etc entering our communities. They borrow close at just under 3% and anything over that is considered a great spread.

    Cash Flow in Las Vegas has been lower from 2013 on. It looks like Cap Rates are dropping to about 7% and continuing to drop. The fundementals may not all be there. Las Vegas unemployment is still above 10% and the tourism industry is just starting to recover. With all this said, is this a bubble, I think that's a little tougher to call.

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  • William Hall
    Rehabber · Long Beach, CA · Member since 2013 · 35 posts · 4 votes
    13y

    If I knew a few years ago what I know now, there are relatively low priced homes around Nellis AFB. Most people with families don't want to live on base. Military gets an across the board payout called BAH (Basic Allowance for Housing), in Clark County it's around $1350/mo. (can be more depending on rank and family size). This is guaranteed $ you can have directly wired to you from the airman's payroll office.

    That's what I plan on doing when I go back. You just have to be selective on the location, some areas around Nellis are beautiful, some are really bad. As a matter of fact, one of my strategies this time around will be to buy rentals right outside of military bases.

    I had an Air Force family rent from me in '04-05; greatest tenants you could ask for (plus you can always go back and complain to their command - you will get paid). I got positive cash flow and made 50K net on the sale.

    Aliante might be a good place to start looking. Last year, I saw fairly good deals in Henderson around the mall. If I knew what I know now, I would have signed with the Air Force out of Nellis in '04.

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  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    Jamal Harb you can definitely purchase properties here in Las Vegas that will create positive cashflow (although rental rates are dropping and prices are increasing so the cashflow and cap rates are decreasing as time goes on.) If you tell us a little more about what your investment goals are including exit strategy I would be more than happy to help you create an investment plan. Or feel free to email me directly should you want to keep it private.

    A few things to keep in mind in the meantime are:

    -Vegas has very low inventory and high demand creating bidding wars on most properties right now.

    -Inventory can be affected positively or negatively depending on which of the current proposed bills gets passed by Legislators. these are bills are being reviewed as we speak. Here is a link to a discussion about SB321 that is a proposed bill that will further decrease resale inventory: http://lvrealestatehelp.weebly.com/1/post/2013/03/sb-321-proposed-for-nv-on-3182013-thoughts.html And here is a link discussing the repercussions should AB284 be amended causing an increase in inventory: http://lvrealestatehelp.weebly.com/1/post/2012/12/more-foreclosures-coming-legislature-to-meet-again-in-february-2013-to-possibly-amend-ab284.html

    -If inventory increases the market will soften and you should be able to find better deals than are currently available.

    -If inventory decreases further, resale homes will become harder and harder to find and you will see an increase in NEW home sales as well as land sales.

    -If you are looking to submit offers on properties that are on the ML under $200k you will be contending with several other offers. Here is an article on how to make your offer as clean and strong as possible to increase your chances of winning these bidding wars: http://lvrealestatehelp.weebly.com/1/post/2013/01/robert-adams-explains-how-to-get-your-offer-accepted-in-the-hot-sellers-market.html

    I hope this is helpful. Please let me know if you have any questions I can answer or if I can assist you with preparing an investment strategy.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
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  • Leon Y.
    Real Estate Investor · Las Vegas, NV · Member since 2011 · 117 posts · 28 votes
    13y

    It definitely feels like a bubble but it is still relatively reasonable enough to invest in... you just have to be more creative in how to get the inventory. I'd also look at how you are buying the property - either cash or financing. With financing it is not as bad if you are looking to hold long term. Cash wise the returns have definitely fallen. As much as I enjoy the good ol' days of 2011 I doubt the market will fall back to that level again. With that being said, if there's another 30-50% increase within the next year or two I'd probably stop buying in Vegas.

    0Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    Leon Yang I agree 2011 returns have become VERY hard to find. Most hedge funds were requiring a min of 8-10% CAP rate in 2012. Now in 2013 most will accept a CAP rate of 6%.

    I hope they release inventory by amending AB284/AB300. This will aloow more people to buy now while prices are still low. If SB321 gets passed the inventory will become even harder to find sending prices skyrocketing and when they eventually do release the inventory it will be unaffordable for more owner occ. as well as less appealing to investors as the cashflow will decrease if not disappear all together.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
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  • Andy Chu
    Involved In Real Estate · Las Vegas, NV · Member since 2010 · 341 posts · 86 votes
    13y

    well SB321 passed on Monday... 21 Yeas to 0 Nays

    0Reply
  • Dave K.
    Real Estate Investor · Las Vegas, NV · Member since 2011 · 45 posts · 12 votes
    13y

    I looked at homes under $250K in 2-3 Summerlin zipcodes and there used to be a lot of short sales available to choose from but now there's maybe 3 at the most. Feels like short sale homes are selling in a day now.

    0Reply
  • Dave K.
    Real Estate Investor · Las Vegas, NV · Member since 2011 · 45 posts · 12 votes
    13y

    Phillip, Andy and other RE pros in vegas,

    Are you seeing a lot of listings going up this week? I'm looking at 89138, 89135 and 89148 and seeing a lot more shorts available. Prices are fair, and I see a few interesting homes at decent prices. There's far more available today then there were last week or even last month. Wondering what's causing this increase.

    1Reply
  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    13y

    Dave K.
    I'll look into it. I would love more inventory.

    0Reply
  • Tiger M.
    property manager · Las Vegas, NV · Member since 2012 · 502 posts · 171 votes
    13y

    Dave K.I just looked 10 days back, 66 homes listed in past 10 day and 8 of them are under $200K. Only 4 are short sales in those zip codes.

    0Reply
  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    13y

    Check this out:

    http://www.calculatedriskblog.com/2013/05/las-vegas-real-estate-in-april-year.html

    0Reply
  • Dave K.
    Real Estate Investor · Las Vegas, NV · Member since 2011 · 45 posts · 12 votes
    13y

    Tiger M. Yes it looks like the ones I was looking at 3 days ago have now turned contingent. Wow that was quick. One of the properties that I thought was interesting was this one. ML #: 1343677
    3 days on market $194K 4Br 2000sq ft could maybe rent for $1200-1400. Have no idea if it was in good condition or not. There's another similar house on the street with palm trees and backing to the main neighborhood street for $25K more. I thought this one was better with a bigger back yard w/GRASS! Seems to have much lower hoa and with a good community pool exercise area.

    So to me it looks like if you want a deal, you must watch the MLS every day and check to see if there are any good deals around. The ones in Summerlin are gone too. This one ML# 1343633 is above the price range at $320K but with 5 bed 2500sq ft. and a big lot, it's not a bad looking house. Most of the homes in the Vistas have smaller backyards except for those nice big houses in the upper section. Hard to imagine that the Vistas were below $100/sq ft and now it's just keeps climbing.

    I have to stop looking at the good deals that are showing contingent from last year. Wow some of these other properties sold at good deals. I wonder if some of the banks are trying to find a way to get the short buyer to get disqualified so they can relist it at these higher prices.

    1Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    I wanted to post an update on this thread since it has been a while.

    Due to higher interest rates, higher prices, certain hedge funds pulling out of Vegas, decreasing cashflow, increased traditional sales (more people can afford to do a traditional sale now that prices have gone up, less people are under water), etc Las Vegas inventory is on the rise. Early 2013 we had around 3,000 SFR, Condos, and Townhouses available for sale in areas 101 through 700, which include Las Vegas, North Las Vegas, and Henderson. As of today we have over 6800. Inventory has gone up week after week since the beginning of July. Above people were talking about Summerlin. I recently read that zip code 89138 which is in Summerlin has had an inventory increase of 260% in the last 3 months. If this trend continues the market will soften. To what degree it will soften is debatable due to several factors: new home building, if and when they release the 80,000+ homes that are currently in default in the Valley, the effects of AB 300 which will be off set by SB 321, etc.

    Another important change that should be noted is that traditional sales now make up around 85% of available listings. This is a huge change compared to when REO's dominated the market and then short sales after that.

    With all of that being said you still have to look at the big picture which is that we are still undervalued and homes cost much less than majority of the country.

    With all of this being said, I am advising my clients to sell NOW before the market softens. We can still get sellers top dollar, above appraisal value in most cases. In my opinion if you sell now you will have the ability to sell high and buy low again once the market softens and better deals present themselves. The days of bidding wars and selling for around 10% above appraisal value will soon be gone and buyers will have the opportunity to low ball and get deals at or below appraisal value again.

    I hope this is a helpful update to the BP Nation!

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
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  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    12y

    I just wanted to post an update on the thread above. Inventory continued to skyrocket month after month until the available listings nearly reach 9, 000 at the end of November. During December we saw the first decrease in inventory since April 2013. Now that the holidays are over it will be interesting to see which way the market heads.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
    1Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    12y

    Those intersted in this thread may want to read the thread below as well. It has another update from Feb 5th 2014. I didn't want to copy and paste it in this thread as it has some of it's own dialog.

    http://www.biggerpockets.com/forums/521/topics/112521-las-vegas-area-meetup

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
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  • Daniel Rubenstein
    Investor · Las Vegas, NV · Member since 2013 · 51 posts · 0 votes
    11y

    Hi all, any 2015 updates on Vegas? THoughts on apartment investing here vs SFR? Any thoughts on what to expect for the vegas RE market in general? Summerlin specifically?

    Thanks!

    0Reply
  • Kurt K.
    Laguna Hills, CA · Member since 2015 · 17 posts · 6 votes
    11y

    I am eager to find something to invest in in Las Vegas areas.  I saw somebody mentioned the air force base as a great place to rent as the tenants are quite good. 

    0Reply
  • Non Phan
    Las Vegas, NV · Member since 2014 · 28 posts · 9 votes
    11y

    Las Vegas have an overall large rental demand since many hospitality workers comes from out of state and tends to rent for the first few years before deciding to stay and buy or move. In terms of better tenant, I know that the Eastside of N15 have older neighbourhoods and would require more hands on management whereby the Southwest/Sumerlin area attracts more desirable tenant. Even northwest or Enterprise can are contender for good tenants. The trick is to find a rental properties that have all the right numbers. It's much harder now to find properties that meets the 1% let alone the 2% rule in SFH.

    There are very few MFH fourplexes on the Westend since most MFH are older on the Eastside but that's where the number still seems to work relatively well here. 

    Just my 2 cents. 

    2Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    11y

    Below are a few of my thoughts on the market right now:

    -Inventory has decreased month after month for several months now pushing us more toward a seller's market. With that being said the market is fairly balanced right now. Buyer's do not have to over pay for properties any longer and sellers are expecting to get close to appraisal value for their properties.

    -Many listings are listed way above value as some sellers and listing agents still believe it is 2012-2013. The listings priced correctly are still moving quickly.

    -Some neighborhoods where the values skyrocketed we are seeing some correction as other surrounding neighborhoods catch up in value.

    -We are stilling seeing around 6% CAP rates give or take. You can find some good deals from time to time and still get 9% etc but it takes a little more work to find those. If inventory continues to decrease I would think the higher CAP rates would become that much harder to find.

    -Rates are still very low and there is a lot of talk about increasing rates in June as well as more talk about it increasing a quarter point in Q4 for 2015. We will see how it all plays out.

    -New Builders are still building and asking too much. Many times the appraisals won't come in and builders either reduce the price or the buyer will come in with cash or a mix of both. New builds are still not a good deal in my opinion and haven't been for years.

    -NOD's are up slightly the past few months but are still way below the 2009-2011 days. I don't see this being a major contributing factor to inventory in the very near future. If legislation changes then maybe this will come into play again but again I don't see anything changing this right now.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
    1Reply
  • Maritza Davis
    Wholesaler · Chantilly, VA · Member since 2015 · 10 posts · 0 votes
    11y

    Hello.

    I may be some help to any that would be interested in REOs in Las Vegas. Please feel free to pm me.

    0Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    11y

    I've got a pool of 25 or so Las Vegas SFR's turn-key with tenants in them with cap rates from 7-11%. Contact me if interested. I'll also provide acquisition capital if needed up to 70-75% ltv.

    0Reply
  • Carlos R.
    Computer Repair Tech · Las Vegas, NV · Member since 2015 · 8 posts · 2 votes
    11y

    @CharlieFitzgerald I'm a complete newbie to the real estate business. I'm looking into getting my feet wet with wholesaling as many have recommended that as a good way to start and build capital. Others have recommended acquiring SFR's. With no money down and no credit, what would you recommend would be a good way to get started? Thanks!

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