New Member Investing in Las Vegas

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New Member Investing in Las Vegas

John Robb
Investor · Las Vegas, NV · Member since 2016 · 23 posts · 7 votes
Hello BP Folks, My name is John and I live in St George, Utah. I worked in Solar for 4 years in California and Nevada but was forced to move and start over when Solar was shut down in Nevada. I just started a pool maintenance and repair business. I had my first real estate experience when I bought my 3/2 single family house in January 2016. I bought it on a 5% down, 4% conventional for $180,000. I now rent it out to cover the mortgage. I just found BP about a month ago through YouTube then I started listening to the podcast. I truly wish I had found it before I bought my house. As the saying goes "Hind sight is 20/20". I have learned I over paid on my house by about 25%, a house covering the mortgage is costing me money, and how important it is to analyze a property to make sure it cash flows and has a good CCR before making a purchase. All principles I look forward to apply to my next property. So here's where I am at today. I have about $10k saved and plan to purchase a condo/apartment/ SFD in Vegas for under $50k. I have excellent credit that being said banks/ credit unions don't loan to people that are self employed until you have 2 years of self employed tax returns. Anyone have any experience being self employed under a year and borrowing to buying real estate? Any advice, tips, tricks, etc is greatly appreciated.
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Andrew Hall
San Diego, CA · Member since 2016 · 43 posts · 21 votes
9y

@John Robb Hey John, welcome to BP! I am currently in the same situation and wanted to start investing in rental properties out of state. After talking with some lenders I did get a referral to a portfolio lender who will invest if the numbers make sense. If it is a true deal and you will generate a good amount of cash flow on the deal a portfolio lender might be the way to go. Especially if you have 20% down I would try to look into finding properties where the owner will carry the note. I'm currently talking with a homeowner on a seller finance deal and she agreed to the terms. 10% down @ 7% financing. Now it is high on the financing side, but you can acquire properties without having to get financed through a bank. It is a creative way  to get rentals while building your business over the next 2 years. Once you can get traditional financing you can refi the seller finance deals you acquired over the first couple of years. The deals are out there, you just need to find them! Let me know if you have any questions. Good luck with your business and google portfolio lenders and seller finance or owner finance to learn about the strategies.

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  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    9y

    Hey @John Robb welcome to BiggerPockets! Definitely start jumping into the community here and feel free to ask any questions related to Real Estate investing!

    BiggerPockets
    0Reply
  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    9y

    HI @John Robb  Welcome to BP!  There are a bunch of Las Vegas locals on the site.  Get connected.  

    As far as traditional financing is concerned, you're probably stuck until you can show 2 years of tax returns.  

    0Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    9y

    Webinars. Try to make it to them every Wednesday. They are very helpful. Careful with the condo market in Las Vegas. Since the housing downturn it seems like a lot of the communities have high association fees. Those can be a killer to your investment. 

    0Reply
  • Justin Morgan
    Flipper/Rehabber · St. George, UT · Member since 2010 · 212 posts · 114 votes
    9y

    Hey @John Robb welcome to BP and hello from St. George and Las Vegas.  We invest in both markets.

    One way around the self-employment thing might be the BRRR strategy (you can find lots info on BP by using the search tool and type "BRRR"). Meet with a Mortage lender and find out what your options are based on your income.

    Hindsight is always 20/20 but action is what created the vision... just keep moving forward! 

    0Reply
  • Andrew Hall
    San Diego, CA · Member since 2016 · 43 posts · 21 votes
    9y

    @John Robb Hey John, welcome to BP! I am currently in the same situation and wanted to start investing in rental properties out of state. After talking with some lenders I did get a referral to a portfolio lender who will invest if the numbers make sense. If it is a true deal and you will generate a good amount of cash flow on the deal a portfolio lender might be the way to go. Especially if you have 20% down I would try to look into finding properties where the owner will carry the note. I'm currently talking with a homeowner on a seller finance deal and she agreed to the terms. 10% down @ 7% financing. Now it is high on the financing side, but you can acquire properties without having to get financed through a bank. It is a creative way  to get rentals while building your business over the next 2 years. Once you can get traditional financing you can refi the seller finance deals you acquired over the first couple of years. The deals are out there, you just need to find them! Let me know if you have any questions. Good luck with your business and google portfolio lenders and seller finance or owner finance to learn about the strategies.

    1Reply
  • Ed S.
    Investor · Oskaloosa, IA · Member since 2014 · 126 posts · 65 votes
    9y
    Two years of tax returns --- true. Two years of profit on those tax returns ---- true. Most traditional lenders -- more than likely want to see a profit. So be sure not get too carried away "showing a loss". Thoughts from the group?
    0Reply
  • Christopher Brainard
    Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
    9y

    For conventional financing, I don't think you're going to get around the two years of tax returns. 

    As @Andrew Hall mentioned, seller financing is a way to go. I've done one deal in Vegas seller financed and it went pretty smooth. If you need a servicing and/or title company when you get to that point, let me know and I'll be happy to refer you to a company here in Vegas. 

    The bigger problem I see is that you're looking for a Condo or SFR in Las Vegas for $50k. At this price point, what is available (if anything) is absolute crap. Be very careful about what you buy and where here, the difference between a C Area Rental and a D Area Rental is huge.

    -Christopher

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  • John Robb
    OP
    Investor · Las Vegas, NV · Member since 2016 · 23 posts · 7 votes
    9y
    Thank you all for the feedback. Chris - I will keep you in mind when the time comes. On the 50k price point I understand that they will be older homes in rundown neighborhoods. My strategy is to get a few of these to start generating cash flow then start looking at Multi Family properties. I feel like these are the only properties in Las Vegas that will cash flow and have a good CCR. Homes at a higher price like the first property I purchased are way more expensive have a lower CCR and are usually cash flow negative. For my strategy of buy and hold CCR and Cash flow are huge. That being said I am new to all of this so this is based entirely on what I have read books and in the forums and listen to the podcast so I welcome feedback and insight. I would really like to chat with anyone currently investing in the Las Vegas area.
    0Reply
  • Christopher Brainard
    Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
    9y

    @John Robb

    I live here in Las Vegas, so if you have any specific questions about the market, feel free to ask. I did a quick MLS search for you and found 0 SFR under 50k. There are some manufactured homes and condos in that price range, if you're interested. I personally don't like manufactured homes and at that price point, the HOA fee for the condos will eat half your rent.

    Also, keep in mind that just because a property pencils on paper to have a good Cash on Cash Return, doesn't mean you'll realize it. Tenants that rent at that price point can be quite a headache.

    Cheers,

    -Christopher

    1Reply
  • Thomas Barksdale
    Haverhill, MA · Member since 2016 · 42 posts · 4 votes
    9y
    Good buy and I like your attitude never give up never surrender buying right is the challenge for any area be patient let the seller come to your price good luck.
    0Reply
  • Phillip Dwyer
    Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    9y

    @John Robb Have you looked into Mesquite and St. George?  Are there opportunities in that price range in those areas?  

    0Reply
  • John Robb
    OP
    Investor · Las Vegas, NV · Member since 2016 · 23 posts · 7 votes
    9y

    Hey @Christopher Brainard

    I agree that there is very little chance I will find a SFR. I am mainly looking for condo/ town homes. I looked at a few mobile homes/ manufactured homes and noticed the lot fees are way to high to make it worth it. The condo HOA fees are not horrible at least on paper as long as they are under $150. I guess the real worry I would have is how often they typically raise the HOA fees. @Zeke Mohammod - Half of Vegas is C-. I expected that is what I was going to get. @Phillip Dwyer - I have looked into St. George but not Mesquite. In St George the only properties in the 50k range are manufactured homes which I would like to avoid because here in Utah they have to be inspected and certified every 2 years. If they fail it can cost a ton to bring them back to pass the inspection. I will have to look into Mesquite more. Thank you for reminding me. Thank you everyone for the feedback.

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