Multi vs Single-Family House Hacking in Vegas
Hello everyone,
First post on Bigger Pockets! I am a young entrepreneur looking to buy my first property. Vegas stood out to me because of its exciting culture and seemingly favorable numbers for house hacking in B to C grade 4plexes. I would love to hear your thoughts on this area of real estate!
I have a good grasp of general real estate concepts from finishing my real estate salesperson courses and helping my parents with the entire process of their last home purchase from finding a deal to closing. From what I have read so far on Bigger Pockets, my understanding of Vegas Multifamily is that:
1. The supply of 4plexes newer than 1980 is low
2. D-Class multifamily should be avoided
3. Targeting the $1000-$1300 renter pool is ideal to minimize vacancies and repair costs
4. You need to be picky with the neighborhood you invest in (Summerlin South, Spring Valley, UNLV stand out).
Some have suggested house hacking SFH instead to avoid these complications but I can't seem to find information on how easily single rooms in SFH in Vegas rent out, at what prices, etc. So, what's your take on MFH vs SFH house hacking in Vegas? Is there a demand for single rooms in SFH? Any concerns to be aware of with Vegas SFH vs MFH?
For context, I'm looking in the 700k range with an FHA loan for 4plexes and am willing to put in the time/effort to manage the properties myself. It will be owner occupied.
I'd say avoid D class everywhere you go. Distressed assets are not a great starting place. They'll be far too much work, capital intensive, and will likely have limited potential upside. It's just a recipe for doing 1-2 deals, getting burned out, and stopping. I do not invest in Vegas due to its high dependence on one industry.
Most major metros have demand for single rooms. If you have young professionals starting their careers, odds are good you'll have demand for single rooms.
The big question is: how do you want to live? Do you actually want to have roommates, or would you be much happier with your own living space?
Quote from @Taylor L.:
I'd say avoid D class everywhere you go. Distressed assets are not a great starting place. They'll be far too much work, capital intensive, and will likely have limited potential upside. It's just a recipe for doing 1-2 deals, getting burned out, and stopping. I do not invest in Vegas due to its high dependence on one industry.
Most major metros have demand for single rooms. If you have young professionals starting their careers, odds are good you'll have demand for single rooms.
The big question is: how do you want to live? Do you actually want to have roommates, or would you be much happier with your own living space?
Taylor, I hear what you're saying and agree. D class seems like a challenge.
I see, so young professionals would be the target demographic for SFH rooms. I'm taking a trip in September to Vegas so I'll keep an eye out and see if there's a lot of them in the area. I'm a little concerned because like you said, Vegas is highly dependent on leisure and hospitality and generally speaking that industry provides lower wages. Many of the other major cities have an industry that stands out and provides jobs for young professionals.
You brought up a great point about which living situation I'd prefer. I definitely like the multi-family setting more even if it means living in a smaller, less luxurious place. At the same time, It seems so much easier to find a SFH deal in any area of Vegas that even if I prefer MFH , I may have to settle for SFH and tough it out for a few years for the sake of entering real estate.
I noticed you invest in multifamily. What drew you into that type of real estate and how has your experience been with it compared to the others?
Quote from @Raymond Wu:
House hacking especially with low mortgage payments is the ultimate way to make huge IRR returns. Way more than doing a normal flip or a buy and hold.
and if you live in units 2/5 years you can save 100% of capital gains on 250k gain for single and 500k for married.
nothing can beat those returns when you consider taxes as well and if you put in effort and sweat equity while living there
i did house hacking to spur my more passive oos and apartment investing. Over long periods of time returns are tremendous.
it’s immeasurable compared to other types of investing but yes there can be headaches
I myself am looking for 4-20 unit properties in Las Vegas and Henderson I’m actually in escrow on a 6 u and coming in town to view on sunday
also I wouldn’t recommend house hacking rooms unless you are very systematized and are good at dealing w people but there can be some real headaches from that like if a roommate stops paying, fights w roommates or steals etc who knows