Las Vegas Four-plexes
Pasadena, CA · Member since 2016 · 5 posts · 6 votes
Las Vegas Four-plexes
Most Popular Reply
Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
10y@Phillip Dwyer and @Robert Adams are both good investor friendly agents in the area. In Vegas Proper there aren't many B or A places for 4Plexes. They tend to be in War Zones, which has higher cashflow and ROI, but has many more headaches. I did well on a couple of 4plexes in the area when I bought in 2010, and have one left I am always looking to sell.
45 Replies
- Real Estate Agent · Hollywood, FL · Member since 2016 · 27 posts · 18 votes10yHi David Beadles ! A FourPlex is definitely a good way to start your portfolio. I see you live in California. Are you choosing Las Vegas for your first investment because it's near? Have you thought of other States? Las Vegas does not have the best Cap Rate you can get right now, but being able to come every now and then is an advantage. Of all the neighborhoods that I have been looking for fourplexes for myself I would say near UNLV would be my choice. Any other thoughts in the forum? As an investor I am watching the market right now so I'll keep you posted. Have a great day!
- 10yWalter PurdyPro MemberReal Estate Consultant · Las Vegas, NV · Member since 2016 · 51 posts · 19 votes
If you've been looking at the news lately surrounding Vegas you'll notice there is massive development in progress as you read this. T-Mobile arena just got completed, & are now talks of getting an NHL team here in Vegas, Oakland Raiders owner committed the team to moving here with the purpose of building a $1.4 Billion dollar Football Stadium. We have 2 different casinos being built in the next 2 consecutive years that are also billion dollar projects. A lot is happening in this city & it's only going to compound. & @Sebastian Wernicke is correct about the UNLV area, thats right next to where the proposed NFL staduim is being built. If you can help me understand the ideal property you're looking for in real estate deal out here I'd be happy to give you some advice that'll get you started in their right direction
- Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes10y
@Phillip Dwyer and @Robert Adams are both good investor friendly agents in the area. In Vegas Proper there aren't many B or A places for 4Plexes. They tend to be in War Zones, which has higher cashflow and ROI, but has many more headaches. I did well on a couple of 4plexes in the area when I bought in 2010, and have one left I am always looking to sell.
- Retired · Las Vegas/Henderson, NV · Member since 2010 · 21 posts · 3 votes10y
I was born and raised in Vegas and the area would be the only one I would consider, in fact, just drove by today, it is aoutstilUNLVrea. That is how it's been for the last 30 years. Haven't run any numbers, though. Hope that helps
- Pasadena, CA · Member since 2016 · 5 posts · 6 votes10y
@John Anderson Thank you and I appreciate the words of caution.
@Sebastian Wernicke I am not 100% committed to investing in Las Vegas. As an investor, I'm trying to get the best return on my money for the lowest risk. Browsing through the forums, I see people have been investing in other places (like Memphis, Kansas City, Indianapolis, Atlanta, Ohio, Texas), but I have not done enough research to feel comfortable putting my money there yet.
The proximity of Las Vegas to LA is a plus for me. If something goes wrong, I know that I can drive out there in a few hours. I was also considering Las Vegas for a few different reasons:
- The low administrative burden (Nevada has no state income tax, low property taxes, and landlord-friendly laws).
- I see the potential for both cash flow and appreciation. Las Vegas property values have increased quite a bit, but it's still far from the peak. I need to do more research into the cities mentioned before to see if there's still room for appreciation.
- I think Las Vegas has made significant progress in diversifying its economy since the Great Recession. While it will always be dependent on tourism, Las Vegas can attract more than just high rollers and gamblers now. There's so many more shows for couples (Celine, Britney, Cirque de Soleil), clubs and music festivals for the twenty-somethings, and even more options for the family than before (like the LINQ complex). On top of tourism, I believe Las Vegas will attract more higher-wage jobs with Faraday Future building a factory and Hyperloop One doing their testing out there.
@Walter Purdy I've read a few of your posts and have seen that you're bullish for Las Vegas' economy as well. I love the fact that T-mobile Arena was built with private money and is now trying to attract a team (instead of attracting the team first, then fund later). I see the arena and the complex as self-sufficient and a professional team (whether NHL or NBA) would just enhance that area.
I'm not so excited about the Raiders. Studies show that football teams are actually a drag on the economy. Long story short, the community does not receive enough of an economic boost compared to the subsidies that cities give the team. Las Vegas would still have to fund $680M through a hotel tax which essentially goes into the pockets of the owners and the NFL who are not very likely to spend their money in Las Vegas. Also, the jobs that the team will create will mostly be seasonal, low-wage jobs in the form of stadium workers.
@Troy Fisher @Antony Skordoulis Thank you for the recommendations and perspective.
One area I am considering is just south of UNLV. I believe the complex is called Parkway Villas. It has high HOA fees (~$650/month) that covers water, sewer, trash, grounds maintenance, management, and maybe insurance. Is anyone familiar with the management and/or insurance aspect of these HOAs and exactly what they cover?
So based on all of your recommendations, look around UNLV and avoid North Las Vegas. How is Sunrise Manor? What about the area around College of Southern Nevada? Should downtown still be avoided? Are there any areas that are up and coming?
Thank you all again for your help.
David
- Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes10y
HOA fees kill the deal. If I recall I was looking at those in '10 They are near the UNLV and the Airport? Average Rent is still $725 for the area. 725x4 is $2900 x 50% Rule = $1450 - HOA = $800 - Mortgage = -Negative Cash Flow.
The only A to B areas for 4plexes are Henderson.
- property manager · Las Vegas, NV · Member since 2012 · 502 posts · 171 votes10y
@Troy Fisher is spot on about the HOA 4-plex issue. Your damned if you do and damned if you don't. The cluster zoning that most small multi building are in have created pockets of blight though out the city. After managing them for ourselves and clients over 25 years, I can state the biggest challenge of not having an HOA. You may have the nicest building on the block but it doesn't matter if the owner next to you chooses to slum the building, allow cars on blocks in the parking area, allows 4 dogs per unit and doesn't screen tenants. How can you get and keep good long term tenants when you do everything correct and the owners around you don't? And it may not be that way when you purchase but can change with time quickly. Then what do you do?
If you have the HOA as Troy stated, you loose control over fixed expenses to the governing board but you eliminate the bad owner issues.
Small investors don't have many options. Focus Group has two large apt complexes(over 200 units) under construction and Picerne Dev already offered to buy them at a 5.5 CAP. So the newer product being built takes deep pockets.
You asked about areas. These issues are city wide. The only real "change" is happening downtown as the area regentrifies. Downtown projects may 2016 will give you a snap shot of the current downtown projects. Decent, rehabbed Multi family is desperately needed in the area to sustain the workers that want to live in the area and not pay $1500/month in a tower rental. There are at least 10 restaurants and urban lounges gearing for opening in the next 6-9 months because of the success of those in the area are having that took a chance on the revitalization early on. Makers and Finders and HopNutz in the 18b Arts District are flourishing. Their employees want to live in the area and are unable to find reasonable housing.
- Ventura, CA · Member since 2016 · 97 posts · 43 votes10yI was considering a 4-Plex for my first investment. Until I dodged a bullet, then heard a BP podcast which brought up that if something goes wrong, it is harder to sell a 4-plex than a SFR. Also, with SFRs, you typically have tenants that stay longer. And I know of SFRs where I see that play out all the time. It can happen with MFRs too, but I'm hearing there's more turnover in MFR. On the flip side, in the Ventura market, I'm noticing some landlords seem to be having more trouble renting their houses (SFR). So, they are selling or flipping to sell them. Something to think about. Weigh the pros and cons and look at your specific situation. If you have the money to budget for the cons that can come with investing in MFRs, than I imagine it can be a good way to go.
- Ventura, CA · Member since 2016 · 97 posts · 43 votes10yOh, that 4-plex bullet I mention was... Listed for $180k ARV of $194k We got the price down to $167k, but the seller wanted us to close in 3 days, Cash. Wholesalers said it needed a lot of work. After we backed out. I found another investor's contractor found the rehab to be a whopping $100k of rehab. The seller, of course, did not want to go low enough to cover that. He was more concerned with taking as much money as he could to do a 1031 exchange. Forget about that fact that he didn't take care of his place. And I found that I know of the guy. He's not distressed himself, but it looked like he was running the place as a slumlord. Not cool. We were also told that one tenant hadn't paid for 2 months. So, that would have been a potential eviction to go through right away. Another tenant was planning on moving in two months. The other two were set for at least a year.
- 10yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@David Beadles If you don't know the areas real well then spend a lot of time getting to know them. As in any market, duplexes and four-plexes can be tricky. They are often in the rougher areas but not always. Keep in mind that you are getting a different class of tenant that often is more transient and doesn't take as good of care as in a SFR so you might want to stick to higher end neighborhoods. You don't have to be in "the hood" to have a bad experience.
- Investor · Las Vegas, NV · Member since 2015 · 22 posts · 12 votes10y
I have a couple properties in Las Vegas. I used @Eric Fernwood for my last one, and I was happy with his work. He really steered me away from the quads. My partner and I were looking at quads in Parkway Villa (and other places) in order to create more income. The MFRs are almost always in rough areas and are beat down properties. The ones in Green Valley are nice, but they are spendy and have atrocious HOA fees. If you are interested in Vegas, I would recommend SFR or maybe a condo, but banks are leery of financing condos.
- Real Estate Investor · Las Vegas, NV · Member since 2016 · 399 posts · 260 votes10y
For all those agents telling you to buy for fourplexes ask then where there's are located. The truth is many agents don't have them and the few that do you bought them when they were cheap. I absolutely love this city and have managed properties from the high-rises on the strip to this slums of alphabet soup. Back when those four Plexes were 60k to 100k I wish I would have bought them all but now that they are $220,000 I wouldn't touch them with an 8 foot pole. Rents have been stagnant for these properties last 10 years. If they meet your criteria then absolutely buy them close but for me as an investor with my money and my investors money I go to somewhere where I could buy many more units with about the same rental rate in the Midwest. Being close to your property is overrated sure it's nice to be able to drive by but with today's technology and a kick *** property manager you can get pictures and even videos of your property in real time. I can buy 8-9 doors for 4 doors in Las Vegas. Just my two cents. I wish you the best! If I can help let me know. I love this stuff.
- Wholesaler · Los Angeles, CA · Member since 2013 · 2 posts · 0 votes10yThe wife and I looked at a number of Vegas 4-Plex in 2010-2011. Actually got a few offers accepted. Thankfully, we switched directions and purchased single family homes instead. Still looking to expand into multi-family. We live in So.Cal and like the Vegas market. However, not seeing any small apartment buildings today that make sense. I understand the HOA benefits. But the expenses and lack of control make it undesirable. Invest outside the HOA and the neighborhoods get rough. Would welcome the opportunity to connect and discuss MF investing strategies outside of California and Nevada. Are considering buildings between 15-30 units. Thx. -RM
- Investor · Long Beach, CA · Member since 2014 · 22 posts · 12 votes10y
Be wary that Vegas has the LARGEST swings of any US market by far. Know where we are in the cycle before you buy, and be prepared for the bottom to hit lower and harder than any other market including California. I would wait a few years... http://dsnet.co.clark.nv.us/dsreports/bldgpermits.asp
- Las Vegas, NV · Member since 2016 · 24 posts · 5 votes10y
very good information here. Thanks everyone.
- 10yEric FernwoodBusiness MemberRealtor · Las Vegas, NV · Member since 2014 · 993 posts · 1k+ votes
Thank you for the kind words @Clint W.. Before I continue I want to state that the properties I owned in Texas and Georgia were quads and they did well. So, I have no issues with quads or any other type of property. I have issues with the majority of quads I have seen in Las Vegas for the reasons that Clint stated and a couple more:
Investors rarely sell performing assets. There are exceptions and we closed on a 20 unit apartment a few months ago that was performing well and in excellent condition. So, there are exceptions, but not many. I looked at apartments for about 8 months before I found one in good condition and profitable. My observations when it comes to the quads I have seen in Las Vegas is that they all were being sold because they were not performing. Frequently it was due to (massive) deferred maintenance but other times due to location.
Before I continue I want to define what I consider to be a good tenant. I define a good tenant as someone one who:
- Pays all of the rent on schedule
- Takes care of the property
- Does not cause problems with neighbors
- Does not engage in illegal activities on the property
- Stays for multiple years
The quads I have seen in Las Vegas typically rent for between $450/Mo. and $600/Mo. and the tenant pool is typically cash based. Good tenants are the result of effective screening by a skilled property manager. Cash based tenants are extremely hard to screen because they have no "financial history". Screening of cash based tenants usually consists of "a heart beat and first and last months rent." So you cannot screen out the "bad ones" like you can with credit based tenants. In my experience, skips, damage and evictions are much more common with cash based tenants than credit based tenants because cash based tenants have nothing to fear.
Another factor with the quads I have seen in Las Vegas concerns the physical layout. Most are two up and two down, putting all the tenants in very close proximity. The result can be that if you get one bad tenant in a unit their behavior can run off the three good tenants that reside in the other units.
The last issue I have with Las Vegas cash based tenants is the type of jobs they have. Whenever there is an economic downturn, the first people to lose their jobs and the last people to be rehired are the lower end hourly wage workers. The tenant pool for properties renting between $450/Mo. and $600/Mo are hourly workers. During the crash of 2008 the vacancy rate for C class properties was very high. We only deal in selected A and B class properties and our clients did not have any reduction in rent or increase in time-to-rent. So, in times of economic stress, when you probably need the rental income the most, you are least likely to receive income from C class properties.
FERNWOOD Team, KW VIP Realty520 Reviews - Investor · Las Vegas, NV · Member since 2015 · 273 posts · 217 votes10y
The best that can happen for most 4plexes in Vegas is demolition. The neighborhoods are just not going to improve without some major changes to the way Las Vegas is developing and the way people live. It's not a walking city so being near these stadiums and new builds doesn't matter people just drive there (Look at Trump tower for an example) You can do it if you are adventurous and have a high tolerance for pain, but...don't get excited about those properties going up in value anytime soon.
- Hawaiian Gardens, CA · Member since 2016 · 6 posts · 2 votes10y
It would seem like from the limited people I had a chance to speak with in Vegas that Multifamily units do not work well in this environment, but SFR do better for rent and resale. Coming from California I was looking to invest in Multifamily units in LV but was steered towards SFR. I'm still trying to learn about this market...
- Las Vegas, NV · Member since 2016 · 1 post · 0 votes10y
I realize this is late in the thread, but I was hoping to get some guidance. My goal is to acquire 1 unite a year for 20 years. Since, I am a young professinoal without a lot of capital, I was hoping to use an FHA to byu a fourplex, but my time in vegas (3 years) has led me to the conclusions that all of you have stated. However, while doing some internet research, i came across some properties that are 4 plexes but in A nd B areas, renting for 900-1300 (2 or 3 bedroom). I finally came across this company that manages all of these properties. http://oakwoodmanagementco.com/. However, None of these fourplexes are for sale (well over a hundred of them). Where would I go to find if these are for sale? any guidance is appreciated.
- Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes9y
hello david
Your below question is answered by an actual owner of 4 plex in Parkway Villas.
One area I am considering is just south of UNLV. I believe the complex is called Parkway Villas. It has high HOA fees (~$650/month) that covers water, sewer, trash, grounds maintenance, management, and maybe insurance. Is anyone familiar with the management and/or insurance aspect of these HOAs and exactly what they cover?
I have owned 4 plex at Parkway Villas since 4-29-2016. The monthly is actual now $640 monthly and coverss water, sewer, trash, and hoa maintenance which includes pool. Also, covers gated community that has 24 security guards, and guard at main gate. From actual monthly water,sewer, and trash is about $250 per month. So if you take into the $640-250 = $390 is your hoa is you had to pay for water, sewer, and trash, which is not bad. Each unit also has a one car garage. I net about $700 per month on a 15 year loan at 4.125 rate.
Terry
- Investor · Member since 2019 · 50 posts · 12 votes6y
I'm reviving this old thread.
I'm looking to invest in a MFR in Las Vegas. A lot of the commentary in the thread above advises against MFR investing however the thread is 2-3 years old. Has the situation changed and would you now recommend investing in a MFR - very generally speaking of course as each property is different. Thanks!
- Member since 2018 · 214 posts · 175 votes6y
No change at all, same trash multifamily properties.
- Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes6y
Hindsight is 20/20. Time for a historical perspective if you had bought about 3 years ago, 4plex located at Carriage Park Villas. This is the 4plex that you mentioned in this post. I'm a good authority on this complex, off Maryland and Tropicana, as I bought in 2016.
I bought for 170k in Apr'16. Today (12/19) recent comps are 367k, 380k, and 375k. My net cashflow are about $800-900 per month.
Summary. A great purchase. Original tenants are still there. My thought was to fix up when tenants moved out, but they never did. Rents can be increased $200-300 to match market.
Terry
- Member since 2019 · 2 posts · 0 votes6y
I'm a young professional who is trying to buy and house hack in Las Vegas. I am actually looking at the exact area you own in right now. If i may ask, what would you consider the market rents in that area for 1,2,and 3 bedroom apartments. By my estimations it's $750, 900, 1100 respectively. Does that sound about right to you? I want to make sure I am not out of line.
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