All Forum Posts by: Young Yim

Hi Shanna,

I used @Eric Fernwood's services as an out-of-state investor and had a good experience. 

I go to Vegas every few months for work, but also wanted a community of investors in Vegas to hear about what's working/not-working. If you ever find anything good please let me know too.

Cheers,

Young

I think this is a case where your tenants will matter a lot (the two evictions say a lot). Not sure what neighborhood you're in, but it sounds like it's a class C/D property, which will naturally have a harder time attracting tenants that will (a) pay on time, (b) maintain your property, and (c) stay for long periods (which matters in the long run). 

In terms of do you sell now, there are a lot of questions:

1. How much did you buy the property for and what is it worth now? 
2. What is your estimated appreciation rate for value of the property?
3. Are you in a scenario where this is a big bump (additional cost than expected) but will smooth out over time after you fix things up and figure out operations?
4. Can you attract higher quality tenants? Or increase the threshold or requirements for accepting a tenant to avoid risk of evictions? Can you or will you set 2 year leases (instead of 1) (because each time you turnover you've got costs), etc.  If you take care of this is your cash flow and appreciation going to be much better long run? 

You have to balance out the pros and cons.  You can probably make it work, but need pretty active management and long term perspective on it and you should weigh if it's worth your time and effort. 

I'd also really challenge guess your PM when they come back with certain estimates or ask for more quotes. $2K for roach is insane but I could see that for mold + roaches (though I've seen lower quotes for mold in Vegas). Going to $22k in repairs could happen after an initial estimate (which sucks) but can be expected - so that's not a major issue. 

Saying no to some repair suggestions from PM is fine too (I think). 

On "invest where you know and live first" - I think that's great and it depends. For instance, I own and live in the Seattle area but none of the houses here would work as a cash-flow investment for me without creative financing or significant work. So I invested in Vegas where home prices are more reasonable (relative to Seattle) and where I grew up (familiarity with the area). If you are starting off and want to house hack or have more favorable rates by living in the home first, then I think investing where you live is must but it doesn't sound like that's what you're doing.

For Vegas, for me to be cash flow positive, I had to put down 30% and another $18k in renovations. I think it's becoming a hot market and it's clear that many people are moving to Vegas, and home prices reflect that. I still moved forward because that deal worked for me and I'm looking at Vegas as an appreciating market. More people and less supply of SFH. Cash flow positive is nice in that it pays for the mortgage and property management with some left over for future issues, but the upside is in the appreciation on the home and favorable landlord laws in Vegas (relative to Seattle). It can move up or down but the past year alone had very nice appreciation while other markets (like Seattle) had prices go down.

I think you can probably find better deals in other states or cities if you want to put down less. Just depends on what you're looking for and the amount of effort you want to put in. I've heard Ohio is a good place to consider BTW and may be looking there for my next property if the numbers work out.

@Julien Jeannot I can't speak for my property because I bought it a few months ago. On average though SFH in Vegas have appreciated at greater than 10% annually and personally I think there's still upside - esp. so if you pick in the nicer neighborhoods. I'm seeing more people (and executives) moving to Vegas from expensive cities like NYC/SF/SEA due to favorable living conditions and taxes, and with that they're slowly opening up new offices or HQs here as well. [We just opened up our Vegas office this week for instance]. There's diversity in job market that's starting to grow due to favorable taxes, entertainment, food, culture, sports... AND you can still find properties that cash flow and there's favorable landlord laws.

I'd note that there could be other cities with a lot of potential as well, but I felt comfortable with Vegas's trajectory given my familiarity with the city (I grew up there and have family there). Happy to chat further if greater interest. FYI most of what i learned was through Bigger Pockets and I worked with Eric Fernwood, who posts a lot of Vegas market stats on Bigger Pockets.

I started off in Vegas for out of state investing as the Seattle area is too expensive for me and not landlord friendly.

Depends on your goal and position. 

In Vegas, to get positive cash flow from LTR, I had to put down 30% which is quite a bit of capital. I expect the home to appreciate and rents will go up over time. I see a lot of continual upside for Vegas and I grew up there so I have am comfortable and familiar with the area. My strategy is buy and hold. I would be curious to hear if other investors in Vegas took a different approach that's also lucrative.

Not sure what a "small investment" means to you, but if you want to deploy a different strategy I wonder if there are different markets to pursue. I think Vegas is a build up your portfolio over time type of city as it appreciates. I've been reading on the forums that OH could be a great place to explore for smaller investments for higher returns. 

@Bill B. thanks super helpful. Really good point about no longer getting depreciation and very fair point about living where you'd like. Thanks for your perspective. 

I just bought an older property (1988) as my first investment and so wondered why you were getting rid of them just in case I should be aware of something. Happy to hear that older properties have still worked out well for you with minimal maintenance costs. 

@Bill B. any rationale for why you're swapping out old property for the new builds? Are you just finding that the old ones require more maintenance and costs so better to swap out or is it because the locations are no longer ideal? From a cash flow perspective you'd take a hit doing that? 

@Carlos Bellido how's 89183 working out? I almost bought in that area before the deal fell through, but really like the potential there due to location and proximity.