Investing in Las Vegas?

Buying & Selling Real Estate
13yFollow

Investing in Las Vegas?

Will F.
Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes

I've brought this up before. About a year ago I was looking at apartments in Las Vegas to purchase, but most of the replies I got were that the market is too pessimistic.

I was looking to buy and hold for 5-10+ years (possibly longer). I also already have experience with 1-4 unit and some small commercial properties here in Los Angeles.

Anyways what do you think of purchasing Las Vegas houses or 2-4 unit properties versus apartment buildings?

Why I'm asking again? Well I came upon 2 articles this week:

http://trends.truliablog.com/2013/05/trulia-bubble-watch/
this one puts Las Vegas as #1 in "undervalued" markets

http://www.theatlanticcities.com/housing/2012/03/where-buy-and-where-rent-now/1545/
This article doesn't show it in top 10 but marks Las Vegas as affordable.

Would it make sense to invest out of state? I'm in the metro Los Angeles area where housing is not so affordable and there's not great value or ROI on investment properties for buy and hold.

If not Las Vegas where would you recommend near the Los Angeles area? Inland Empire/Riverside?

Any other ideas are appreciated

0Reply
150 views

Most Popular Reply

Troy Fisher
Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
13y

Will F. , current list prices for 4-plexes are running $160k. At rents running between 400-600 you do the math. I stopped buying when they went above 115k. Anything less than 140k I've found needs extensive rehab.

1Reply
See this reply in the discussion

38 Replies

Jump to latestLatest
  • Dustin H.
    Real Estate Investor · Dubai, Dubai · Member since 2013 · 19 posts · 4 votes
    13y

    Your example is of 1350 on 150k is not 9% net, it's about 6%.. Just sayin' :)

    0Reply
  • Troy Fisher
    Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
    13y

    I currently have my Las Vegas portfolio listed for sale. For a cash buyer it's a great deal! 10% cap rate, and currently cash flowing occupancy. But to finance a multiplex purchase right now is not smart in vegas. Your Cash Flow will disappear into the debt service.

    0Reply
  • David T.
    Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
    13y

    Sorry to tell you, I'm out of L.V. after three years. Heading for Atlanta!

    The market here is under the control of the hedge funds who are happy to buy for a 4% cap after redecoration and since they've got here we have retail prices rocketing. They've been buying foreclosures at points above comp at the auctions and that's the front line market here.

    Clearly, the hedge fund strategy is to wait for the uptick to reach a certain level, package these portfolios into a REIT and flip for a 25% plus return on margin. They has the liquidity to do that and it's what they do.

    I'm just a flipper, so what would I know? Maybe you might follow the hedge funds?

    Best of luck with your investment!

    1Reply
  • Patricia Franciulli
    Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    @Lukasz K.

    Man do not waist your time with a RE license unless you have a lot of properties that you want to put on the market and you trying to save on the commission. You can pay someone who has access to the MLS to be able to do you research without being a agent. The only thing is if this person can get in trouble to give you their password but as long as you are doing things legal and just trying to do some comps than I dont think it will be the case. Real Estate agents in this town ( majority) are having problems to pay their MLS dues because of NOT MAKING ANY MONEY..

    0Reply
  • Bryan Davis
    Grand Prairie, TX · Member since 2013 · 70 posts · 7 votes
    13y

    I spoke with an out of state owner a few days ago that lives in Las Vegas (the property I was talking to him about was in Dallas) and he told me that Liberty, Nevada, just North of LV apparently has been seeing around 30% gains over a 6 month rolling period. You might check into that market.

    0Reply
  • Joe O
    Investor · Las Vegas, NV · Member since 2011 · 92 posts · 25 votes
    13y
    Originally posted by Bryan Davis:
    I spoke with an out of state owner a few days ago that lives in Las Vegas (the property I was talking to him about was in Dallas) and he told me that Liberty, Nevada, just North of LV apparently has been seeing around 30% gains over a 6 month rolling period. You might check into that market.

    He may have been pulling your chain. ;)

    I went to research where this was, and here's the first (and basically only) hit on Google for Liberty, Nevada: http://www.ghosttowns.com/states/nv/liberty.htm

    Google Maps shows no results for that as an actual town: https://maps.google.com/maps?q=liberty,+nv

    It was apparently in Nye County according to that one ghost town website, a county which has no incorporated towns whatsoever, and Liberty isn't even listed as a settlement or unincorporated town: https://en.wikipedia.org/wiki/Nye_County,_Nevada

    Also, FWIW, even if he was being serious (and just had the name of the area wrong), it's not hard for raw land to go up 30% when it starts so low. $100 for a giant piece of land going to $130 is not a gain that makes me excited, despite it being a "30%" gain.

    Follow up with that owner, I'm curious what he has to say about "Liberty, NV."

    Sounds to me like he was just having some fun with another investor. :)

    0Reply
  • Dustin H.
    Real Estate Investor · Dubai, Dubai · Member since 2013 · 19 posts · 4 votes
    13y
    Originally posted by David T.:
    Sorry to tell you, I'm out of L.V. after three years. Heading for Atlanta!

    The market here is under the control of the hedge funds who are happy to buy for a 4% cap after redecoration and since they've got here we have retail prices rocketing. They've been buying foreclosures at points above comp at the auctions and that's the front line market here.

    Clearly, the hedge fund strategy is to wait for the uptick to reach a certain level, package these portfolios into a REIT and flip for a 25% plus return on margin. They has the liquidity to do that and it's what they do.

    I'm just a flipper, so what would I know? Maybe you might follow the hedge funds?

    Best of luck with your investment!

    I just sold 10 single family in LV to one individual fund for 4 percent cap on actuals with three year operating history. Surely retail investors aren't stupid enough to buy into a REIT with those sort of numbers. Guessing the fund's valuation modelling assumes rental increase and would have to expect quite a bit of appreciation to justify but I just can't see it.. Too much rental supply for the rent increase and higher interest rates will only lead to expanding yields.. Most of these funds probably have libor margin credit lines though and libor will stay low for at least another couple of years..

    But ugh, bottom line is for individuals it's stupid prices and there is no way to compete so better to go somewhere else. .

    1Reply
  • Mark Whittlesey
    Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes
    13y

    Also, keep in mind that Vegas is a pretty transient town. A lot of people coming and going.

    I did not find it to be a good rental market. Made out good on the appreciation but there was a lot of tenant turnover on the way.

    0Reply
  • David T.
    Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
    13y

    I always assumed REITs were a retail product? They are sold as such, right?

    0Reply
  • David W.
    Pasadena, CA · Member since 2013 · 8 posts · 0 votes
    13y

    so why is Vegas a good place to invest in? a lot of jobs there? businesses moving in? housing market still under the water huh? so still buyer's market?

    Isn't it mostly just casino business and not much other big businesses, so if the only thing fail or not doing good, then it will drag down the entire city so we should look for cities with more than just one single big business? I am new to this and doesn't know much about vegas, educate me if possible thanks!

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

    Vegas is mostly a one-trick pony in terms of the industry base. However, gains are being made in health care, data storage, and energy. There's also a high concentration of retirees here.

    0Reply
  • Patricia Franciulli
    Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    @Phillip Dwyer You right.. Just take a look at me " I am a want be retiree".. LOL..

    0Reply
  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    13y
    Originally posted by Patricia Franciulli:
    @Phillip Dwyer You right.. Just take a look at me " I am a want be retiree".. LOL..

    You will be there sooner than you think.....

    Who knew I would/could call it quits @ 49 by buying properties.

    good luck

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free