All Forum Posts by: Dan Mumm

@Alberto Zenemij, I would never wait for "the bubble to pop" to make a purchase decision. Nobody knows what will happen with prices, or when. I don't typically recommend OOS investing for a first time purchase, but California-Vegas is a rare exception. I do agree with @Account Closed that you should do the work and not just assume that no deals exist in California because it's too expensive. I'm sure there are successful buy and hold investors there.

A few clients of mine reached out on that Ermine deal. It sold quickly with multiple offers, but had pretty good value. It's in a good area for long term holds with minimal HOA cost but still decent construction. Agreed with Bill that it might produce a lot of turnover due to low size, but this type of deal would work well for a new investor.

Let me know if you are ever in town, would love to meet. Maybe I can join in on the pizza discussion!

@Carly Bryan, marketing is extremely important. Professional photos for your type of property are a must. My property manager (I have him manage my properties and I'm licensed to do it myself which speaks volumes) is well-versed in luxury properties. He has helped many clients of mine rent homes who could not sell their homes, in that price range. I'll be happy to provide a trusted referral if you'd like.

+1 for all of @Bill B. 's comments. Multifamily product here is old and poor tenant profile. House hacking is an option if you are willing to tolerate higher crime areas as a primary residence temporarily. 

@John Mano got it - and I completely agree, Summerlin outskirts has some B areas that are some of my favorite investment locations.

For deals not in the MLS... yes, you will need a different source. There are some Realtors on this forum like myself who work with a lot of investors who have access to off market deals. You could also reach out to wholesalers, check auction websites, etc. A good investor-friendly Realtor is probably your best bet to get connected though if you are just starting out.

Summerlin near Charleston is pretty much the prime Summerlin location, unless you head east past Durango. Then you're more in the outskirts where there are some decent opportunities. "South Summerlin" (215/Flamingo) is also going to be very expensive and lower return in general.

Spring valley homes are mostly 1980s so yes they will require work, but I love that they don't have an HOA and think this is a great area to consider. No issues renting, the rental market here is extremely robust and you won't have a problem with finding tenants unless you're in the luxury market.

SFH/Townhomes tend to hold value better than condos, but ones with associations do tend to hold their value than ones without. Good associations are worth their payment if your plan is to hold long term.

Most condos will be very difficult to make cashflow positive with 25-30% down due to high association fees. You will likely need ~50% down to get any reasonable return out of them.

@John Mano - I don't agree with the earlier comment that Summerlin is a "B" location. Summerlin is widely regarded as the most high-demand, lowest crime, most desirable location in town. It is one of the most affluent townships in the United States based on average household income. In general, Summerlin is A/A+. I would agree with Spring Valley being a C+/B location based on these metrics and average age of homes. Spring Valley works well for new investors because it has a balanced trade off of cashflow and quality of location.

Are you planning to use cash or financing? This will determine whether positive cashflow is feasible or not. Any property within reason will cashflow when paid in cash. 

With 25%-30% down, you can expect the following cash-on-cash returns for a SOLID, good deal (not MLS). Very rough numbers.

A/A+ [Summerlin]: 0-1% COC

B/C+ [Spring Valley]: 2-5% COC

C-D [N/NE]: 6-8%+ COC

Let me know if I can help at all. Of course, with the right deal these numbers can vary greatly.

@Account Closed has pointed out, it's a very low inventory segment of the market, especially if you rule out all the ones which are dramatically overpriced. I have another one coming on the market soon which is not listed on the MLS yet which fits your budget.

@Frank H , yes, if you have a current primary residence loan but are looking to get qualified for an investment property, it is not nearly as difficult as being able to qualify for a secondary residence, due to being able to count the rental income to offset the debt. I was able to qualify for my most recent rental property purchase just with my W2 showing $20k yearly income (didn't need to show any of my business tax returns or earnings). Let me know if you have further questions on this or if I can help. 

Shame to see so much time and energy being spent on speculating.

Ever notice that the people talking about the future, guessing what will happen etc, are the ones who are on the sidelines and not active? It's rare to see highly active investors talking about these types of things.

Stop speculating and start finding deals.

:) 

My suggestion would be to hold if it’s performing unless there was an opportunity to trade up to a significantly better quality asset, like a B+/A location (GV, Summerlin)