Help me analyze this deal - First time post for SFH in Las Vegas

4 Replies

Hi Bigger Pockets,

This is my first post - I am trying to learn how to analyze deals. This is a single family home in Las Vegas. I would appreciate any feedback and blind spots in my analysis of this property. 

Thanks! 

Darren

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I just breezed over it, and cant help but wonder where you get your numbers from? Listprice is 230k, rental zestimate is 1250, and while that doesnt have to mean anything, i think realistically you could get $1/sqft max for that kind of property in that part of Vegas, so probably 1400-1500  if you`re lucky. 

In your case that would cashflow negative, even if you got the price down by the 22k you expect in your calculations - my opinion is: keep looking, there are still great deals out here. If you are out of state and want to invest in Vegas, you might have more success by working with a local broker or potentially syndicate with a flipper / developer, to make your 50k downpayment work harder then a sub 6% cap 

All the best, Stephan

I would ask, "is it already rented for the $1800?"  If the property were here in the Los Angeles area, those numbers would be pretty good, I am not sure about in the Los Vegas area. It appears you feel it needs work.  You are putting $41,000 down. Do you have a good reserve after all is said and done? In short, I would double check to be sure that the return on the investment is good for your area, and be sure that you have reserves to pay the mortgage if it is vacant now or while repairs are being made. Also that you have an idea where the money is coming from for the repairs.

I live and invest in the Las Vegas area, and I have to agree with @Stephan Kraus - I'm not super familiar with that very specific neighborhood but I'd be shocked if the property rented for anything close to $1800/mo in that general part of LV.  The other thing that jumped out to me is: 4.5% interest rate on a 30-year on an investment property with no points?  I think you're looking more like 5.5%....but I admit I haven't been quoted a rate on an investment property over the last 6-12 months so I could be out of touch here.  If you've found folks lending at 4.5% for a rental (or if other folks here know that rate is still out there), please let me know.  I'd be interested.

I also believe that your rent estimates are high. There are 2 SFR properties within .25 mile radius with similar lot size but both properties are 1700 sqft which are listed for rent at $1450 and $1425, respectively.