New Member from Las Vegas, NV

51 Replies

Hi Everyone! I am so excited to have found this amazing resource to help me begin my real estate investing career. I am 26 and currently work in client account management and know this is not where my heart resides. I have a love and passion for interior design and received my bachelors degree in the field in 2015. My ultimate goal is to get into flipping homes as I feel this would be a great way to use my interior design background while investing my money into something more valuable. 

I would love any input you guys might have that would help me get started. I will give you a little background as to where I am at in life to help you understand my situation a little better. 

I am currently renting a home in Las Vegas and am beginning the search of the home buying process. As I am searching for homes to purchase, the thought of an investment property is something that sounds more and more appealing, but the thought of how to get started is what is daunting me. I want to make sure I make an educated decision before jumping to something I know little about. Should I continue with the purchase of my own home instead of using that money for an investment? I am so tired of throwing my money away to someone else's mortgage, but it's also the easy way out. My current job is flexible and steady so I would likely work full time while trying to begin as I don't want to lose my consistent income. 

Thank you in advance for any input and I can't wait learn more about the BP community and all that is has to offer! :)

@Kristin Davey

Hey Kristin, any chance you have any friends/relatives/co-workers you wouldn’t mind living with? I started years and years ago by having 2 friends and a co-worker live in a big house I bought and paying me more rent than my payment and 3/4ths of the utilities.  Eventually I moved out and got a fourth renter. 

In the Midwest or a place with nicer 4plexes in nicer neighborhoods or if ou can get lucky in Vegas the other alternative would be to get an owner occupied loan on a fourplex and live in 1/4th for at least a year.

Ps. Welcome. 

Hi @Kristin Davey ...welcome to BP and the investing game.  I'm local in Vegas and would be happy to connect with you to help point you in the right direction concerning investing and/or flipping locally.  The market is pretty competitive here but there are still deals avail...you just have to work for them.  @Bill Brandt has a good idea with acquiring a property and renting rooms out to pay the note; if you're ok with having room mates.  There are also a few lending programs that could allow for no $ financing if you purchase a property in certain areas of town that could lesson the impact on your finances.  

If you are looking for a group to plug into; I run the largest investors meeting in town.  There you can network with many other investors/flippers and resources.  Just text me at the number below and we can schedule time to talk.  Looking forward to meeting you!

Hey Vegas folks..  Been lurking on these boards for quite some time and figure here is a great place to start with my first post, bringing some value..  

Kristin, I've been a full-time realtor here in Vegas for 8+ years..  That being said, Id stay far away from Vegas if you're looking for a cash flowing investment property..  Gotta be one of the worst markets in the country for cash flow..  You could jump on the speculation bandwagon and hope to take advantage of some home value appreciation but thats always a bit more risky, especially in this extreme city..  I personally, along with many others here, invest in the Midwest (Wisconsin)..  Much more cash flow stability there, and in many other similar states..  

4-plexes here are in some pretty rough spots..  Probably your best bet for cash flow here as a few clients of mine own them and do ok, but its a challenge dealing with that type of tenant and might not be the best first investment property idea..  Definitely not areas you'd want to live yourself..  

Good luck..  

Come on guys, wth!

You can’t cash flow in Vegas? So every investment property sold is as a loss, to an idiot? Or do you mean you don’t want to work hard enough to find a good deal? One of the worst markets for cash flow? If you eliminate how many entire states? 

Stop pushing Vegas on people? SHE LIVES IN VEGAS!!!  Should her first investment be out of state where she doesn’t know the market or anyone? Should she leave the state and house hack somewhere else because it might be 5% better so she can pay income tax?

Some people actually log on to help other people AFTER reading their question. It sure seems other people log on to say 1) You’re screwed 2) I don’t have a good answer but that other person is sure wrong 3) I didn’t read your question or I’m going to ignore it so I can saw the same thing i say in every post. 

If you aren’t trying to help please just don’t post anything. Otherwise lead with the help.

Don’t let them discourage you Kristin, either they are already investing in your home city and trying to keep you out, or they aren’t and they’re just repeating stories they’ve been told.  Or maybe they want to push some other location on you. Even after you succeed people will keep saying it can’t be done. 

The LV market is bonkers.

We’re seeing an influx of new agents who are RE and this market as a side gig/second career. They’ll disappear when the market settles down. The Vegas market is a small one and you’ll quickly know who the agents worth working with are. If they take more than an hour to reply to your text or email. Move on cause the legit ones reply within minutes.

What you want to do is:

1. House-hack by using 5% owner occupied or better yet the the “Home Is Possible” Nevada grant. Get a 3 bed, 2 bath or 2 bed, 2 bath and rent the other room out.

Slightly higher rate but you don’t require much money if at all and it’s free moneys for now. Plus you’re 26 with still historically low rates and 30 yrs ahead of you. My wife and I never qualified (income’d out) but our friends did and have made out like bandits with 2 properties and heavy cash flow.

2. Don’t go after multi-family. They’re all dumps out here. More headache than is worth it for someone young and starting out with little liquid cash to float if something goes bad.

3. Do a live-in-flip. Buy crapp-ier, fix it up a little while living there, and move out and rent it out when the time is right. You won’t know if you’re actually good at design until you actually do it regardless of your background. Plus the interior design you might be referring to could also be the interior design one that appraisers don’t care about and isn’t actually worth more upon resale.

Thank you all for your input, good or bad haha. That's why I'm here. I understand Vegas is probably not the most ideal place to start my investing career, but like @Bill Brandt said, I live here and am not interested in investing elsewhere as my first investment. That being said, I appreciate your thoughts on this and having roommates is something that I have considered along with living in the home while I fix it up. I am well aware of what upgrades will add value to the home and what will not so I am not concerned that my interior design background will hinder me more than help me. 

Thank you @Jon Lee for your offer I will be in touch. 

3bed 3 bath “townhouse” (half a duplex) $130k bought March of 2017 built in 2006, 1500sf. 89032 zip code even though I prefer Vegas to north vegas. 

$1325 monthly rent rent $15,900/yr minus

Yearly expenses of $660/Hoa (gates community)  $819 taxes, $561 insurance $1272 property management. Mortgage is $463x12 = $5556 (3.75%, 25% down both bad for the time as I have 8 mortgages and don’t live there.) total yearly expenses $8,868. 

Cash flow is $1325 - $770 is $575. 

Income is $15,900 minus $8868 plus $1800 loan pay down = $8832. I took $4680 in depreciation and paid taxes on $4372. 

My $30,000 down made $8800 not a home run, but the place is worth an easy $150k now, that’s an extra $20k (15% in one year, good thing I didn’t listen to people last year saying I couldn’t invest in Vegas, or the next crash is/was coming), if I wasn’t lazy I could refi and get my money back out but houses here are really cheap and I usually only buy 1 a year. Houses here are extremely new compared to other markets, we don’t have bad weather events, property taxes are low, with 13 properties water heaters and appliances are biggest expenses and even that is rare, less than one per property per year. 

It’s not rocket science. What do you think these houses will be worth in 20 years? Double their current value? 4x? That’s just 4-8% per year. If it’s worth $300-$600k and I put down $30k and the tenant pays it off that’s pretty good. And then the cash flow explodes and guess what, people on the internet are telling you that you can’t make money in Vegas on real estate. Of course you’re reading that from the beach in the bahammas, or your preferred beach. 

Ps. All my deals are lazy off the MLS deals, imagine someone with the drive and ambition to actually hunt for deals.

@Kristin Davey l live in California, but have investment property in Las Vegas. It’s true that the Vegas market is “hot” at the moment, but you can run the numbers yourself to see properties that still have potential to be good investment properties. I suggest you contact @Eric Fernwood for his thoughts on the Vegas market. He recently published some great articles on the Vegas market that you may find helpful.
Good luck and welcome to BP.

@Account Closed

It’s all good. I don’t want to tell you how close I came to buying a condo on the strip a dozen years ago for almost $800k. Luckily the realtor tried to show the $1200/mo Hoa as a benefit as I would have “full use of the casino amenities...” 

less than 5 years later I didn’t buy the equivalent condo for $200k. 

Ps. I lost more than 5 deals in the 08/09’s haggling over $5k. The bad ones are only up $150k. :-(

“I’m not paying you $112k with no appliances, I just bought your neighbor’s house for $105k with appliances. I don’t care if these houses are only 2 years old and cost you $300k” (and of course they are worth almost $300k again.) (Craig and jones behind the Lowes.)

@Kristin Davey

Hindsight is 20/20, as Las Vegas median price for SFR is now 289k as of April 2018. It would be easy to say, I should have bought at the low in 2012 for a fraction of the price today.

Now, you need to determine your goal. What is your goal? What is your target ROI? Long term or short term?

Here is some numbers that I forecast based upon analysis. The 289k median for April will be around $320-330k in December 2018. 

Here is some facts. Low inventory will drive prices up in future. Interest rates are going up. A check on Redfin/MLS, there are currently 3660 available SFR without offers. There are 75 multi's (2-4) units. This is a ratio of 2%, which means for every 100 SFR's there are 2 mutli's.

Based upon all the above, there is still good opportunities in Las Vegas. 

There is one statement in the above that should stand out and if you can identify it, then you will know which direction to go.

Terry

I thought we just had this discussion?

PLEASE STOP TELLING PEOPLE WHAT NOT TO DO IF YOU’RE NOT GOING TO HELP THEM. 

Your post is no more helpful than a post that says REAL ESTATE IS STOOPID, YOUR STOOPID. 

They would both add just as much to the discussion. 

Not sure if anyone here has tried to buy a property here in Vegas in the last 6 months, but its an absolute fight for every single property that hits the market under 300k..  Unless you have plenty of cash to burn, and willing to pay over appraised value, good luck..  Typical average properties are getting 5, 10, 15+ offers within days..  Everybody and their brother are lining up to buy "fixers" cause they're all HGTV flippers..   This just can't be sustained for any length of time..  Jobs just don't pay enough here to support $320k plus median prices..  The speculation and low inventory can drive prices up for the near term, but with rising rates and higher and higher prices, something will have to give..  

If someone is looking to hold for 20+ years and has the finances to withstand a turbulent ride, then they'd prob be ok..  I've seen and been a part of the extremes, its not for the faint of heart.. Congrats to anyone who's bought in the past 5 years, and good luck to anyone who's thinking of investing now..  There's a couple neighborhoods which I think are still undervalued, but wont touch them here with a 10 ft pole at this time..  Much safer places to put my $$ investment wise, where I can still sleep at night  

Yes. The median probably will be $320k by the the end of the year, same as it was 12 years ago. But that’s up 10% from today’s $290k. Vegas is probably one of the only markets that isn’t higher today than it was 12 years ago. 

Can I ask where are you investing now Brandon, and in what? (Sfr/mfr/syndication/etc) how did you pick the area?  Thanks. 

I’d love to make the next step up. But as they say. I don’t know what I don’t know. It would have to be an exchange though. I couldn’t afford to give up the income and write that kinda check to the irs. 

@Bill Brandt  Appraisers are trying their hardest to keep this market suppressed and under control..  We'd be at 320k median already if it was a true marketplace, where buyers can determine the property value and pay what they're willing to pay for a home..   

Like other places that got out of control back in mid 2000's, Vegas never should have been at 320k..  Not sure it should be worth 320k now either..  The average casino working couple making $60-70k combined will have a heck of a time paying the mortgage on a 320k house..  I just cant see it, unfortunately..  

I liquidated a majority of my stock market/mutual fund holdings slowly since Aug (I think stock market is near a correction as well) and have picked up 5 properties in Central WI.. 3 duplex, 2 SFR.. This is pretty much the epitome of the anti-Vegas option.. Having seen the carnage a decade ago in Vegas, I don't have the stones to ride this ride.. Cash flow can be pretty good in WI, but ZERO appreciation.. However, just the cash flow on these properties, should make little baby properties, which will continue to multiply over the next 20 years into a colony of properties, thus achieving my goals.. Using the 2% rule, they're all between 1.5-2%..

Oh and I chose WI because thats where I'm from and still have lots of connections and friends there etc..  

Thanks for the info. My only current out of state is on lake Minnetonka. I grew up in Brooklyn Park and my best friend lives in Hudson. 

If I still lived in the cities I’d own a bunch of those brick fourplexes. The one I spent ages 1-3 years old almost 50 years ago looks the same or better than it did then. My friend in Saint Paul just got an unsolicited offer of $700k for his fourplex in the lamplighter area. He lives in a 4th of it and bought for $250k or I don’t know how it would work either. 

I wouldn’t mind getting some fourplexes where income wasn’t the main concern but rather a place to spend winters/summers/etc. (Florida, Hawaii, the USVI, something like that.)

Ps. The income to house price isn’t terrible yet. $60k to buy a $289k house isn’t Seattle where an average income of $80k is supposed to buy a median home of $819k. 

Pps. I give you a lot of credit for walking your talk. Soooo many people talk about the upcoming stock crash and yet remain fully invested. While I may think you sold too much and too early, I’ve been selling 1% per month for almost 2 years and have regretted almost all of it. With a gain of 20% just last year and almost 5% so far this year it’s going to have to crash hard and then I’m going to have to have the guts to sink it all back in or I should never have sold. 

Ppps. If you want to talk real estate over pizza/burgers or bbq ribs sometime let me know. In case you haven’t figured it out I love to talk real estate and Ryan to learn a little along the way. I’m up by Sante Fe casino but don’t mind driving. 

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