Vegas or not to Vegas??

Question

With the Zaggots already established, a few areas under redevelopment, and a new NHL & NFL teams coming to town. I'm considering Las Vegas for my next investment (multi unit).  Curious to any feedback.

Clint W. · Answer

I live in Vegas and have a couple SFRs here.  We have considered multi-family many times; however, we always walk away.  We do this for a couple reasons.

1) Property values are climbing faster than is realistic due to international (mainly Chinese) and California investors.

2) Mulit-family homes here tend to be in the C/D category for homes and just not worth the risk assumed (for us).

3) Elysian apartments have exploded all over the valley and I feel that the apartment market is going to become saturated very soon.

my $.02

Cheers

Louis Davis · Answer

@Sam Van Horebeek there are a ton of condos here in Las Vegas. Specializing in getting properties under contract at a discount out here, I talk to a lot of sellers and they are aware that they are able to get close to full value on the property because buyers are getting desperate. The good news is that these condos don't need a lot of work and you can start renting them out right away. Within a year they should be worth more than what your purchased them for especially due to the Las Vegas Raiders due to come to town. Hope this helps!

Louis

Stephen Masek · Answer

Watch out, some HOAs do not allow rentals.

Sam Van Horebeek · Answer

Interesting discussion - a few questions:

1) what kind of (gross) rental yield do you see on SFRs in Las Vegas?

2) does anyone know how the condo market in Las Vegas is doing?

We do see Chinese submitting inquiries for Las Vegas indeed so would be good to have insights from the local experts on the ground. Thanks.

Vu T. · Answer

I'm having a hard time finding any MF's within my price range (<500k) where the numbers work.  Many of the quads avail from the MLS are in terrible neighborhoods with low rents to justify their relatively high prices.  Their numbers just don't work usually (or work well, most fail the 50% rule easily for example).  The ones that are decent have high ($500+) HOA fees which pretty much kills any profits you may have.

Talking to bankers there while trying to close on an 8U complex, they pretty much said that the market for commercial MF's are not that great.  Most want LTV of 60-65%.  With that being said, I'm still seeing properties (quads) selling within 2-3wks.  So someone is buying them up.  Maybe they know something I don't?  In the meantime I'll keep on looking.

Vegas or not to Vegas??

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