Southern Nevada has been ground-zero of the foreclosure crisis for a long, long time. Home…
Browsing: las vegas
Here’s a great idea – let’s buy a huge parcel of land in the middle…
Nationwide, 1 in 4 mortgages were underwater by the end of 2009. Recent research suggests…
In the Las Vegas market it’s pretty rare to find newer real estate developments without…
While the flap of Senate Majority Leader Harry Reid’s recent comments created a stir nationally,…
I had the opportunity to speak with the Mayor of Las Vegas, Oscar Goodman, a few nights ago. He was the featured speaker at the monthly meeting of the Real Estate Insiders Club. In an era of much pessimism about the Las Vegas real estate market, Mayor Goodman is the voice of unbridled optimism. It was a refreshing change.
The meeting was held on the 24th floor of the Newport Lofts high-rise condominium in downtown Las Vegas. With breathtaking views of the Las Vegas strip as a backdrop, Mayor Goodman gushed about what the future holds for the City of Las Vegas. While one would expect any incumbent politician to exude optimism, Mayor Goodman could back it up with facts and accomplishments.
The economic law of supply and demand says that when demand increases and supply falls, prices are sure to rise. Apparently that law has an asterisk that says “except for Las Vegas.”
For months now I’ve been hearing about how brisk sales have been, especially in the REO, or foreclosure, market. Looking at the numbers you will see that the available supply has been steadily trending down and sales have been setting all-time records. A bank puts an REO on the market and within days there are multiple offers on the property. So why are prices still falling?
On The Street
One realtor that I know specializes in these REO properties. What he sees are a lot of cash buyers from other areas stepping in. That would seem to mean that investors are seeing the value while local buyers are still gun-shy. Are they missing a golden opportunity?
This past week, my Re/Max broker gave me an award congratulating me for having the 9th most sales in the region. In order to achieve this, I had to sell over a million dollars in real estate in each of the last two months. And I can tell you… you have to sell a lot of condos at $30,000 to sell over a million dollars in real estate. This got me thinking a little bit about what am I doing right. I asked myself, “What am I doing that has afforded me the ability to sell so much real estate in what some call the worst housing market in our nation’s history? What do I perhaps do differently than the average Realtor, that enables me to do a lot more business?
Thinking Like An Investor
The first thing I do, is that I think like an investor, not like a Realtor. I understand what the investor wants and I find it for him. Savvy investors in today’s market want good, new houses or condos at the lowest price possible, with the highest cash flow, and the greatest appreciation potential. More than ever, investors know what they want and they are able to make a good, fast decision about buying it provided you get them the necessary information in an expeditious manor. In today’s market you have to be ready to pull the trigger immediately if you see a good investment property. The key is to train both your investor clients and your owner occupants to be as aggressive as you need them to be in order to get the deal under contract and closed.
It was the worst of times and it was even worse than that. A recent Case-Shiller housing report finally showed some hopeful signs recently. The report showed that housing prices for the second quarter of this year were up for the first time in three years for 18 of the 20 markets that were tracked. The two that were down? Detroit and Las Vegas.
The two markets were very much the same, yet so different. The same in that they are still showing price declines but the future outlook for each is like night and day.
For the past several years it seems that every time you ran into a real estate agent he would proclaim that the market was at the bottom and it was time to buy. Of course, that was nothing more than the agent’s vested interest speaking. The market continued to slide in just about every city. Some fared worse than others, but few areas of the country were spared.
Many inexperienced and even some veteran investors have an expectation that the real estate market can turn on a dime in the manner of a speedboat. Perhaps they think it’s more like the stock market, which can swing wildly from one trading session to the next. However, real estate is more like a supertanker in that it takes a long time to change course. The reason for that is simply the lack of instant liquidity and the time it takes to complete each transaction.
There is good news. The latest report from the Case-Shiller U.S National Home price Index shows that real estate prices have shown their first quarterly increase in three years. Does that mean that the bear market in real estate prices is over? Not by a long shot. There are many foreclosures on the horizon and the national economy is still hurting. However, it’s a start.
Sometimes your best real estate deal may be the one you don’t make. As real estate investors we are always looking for the next “perfect” opportunity. You look around and see potential everywhere and are afraid of missing out. If you aren’t careful it can lead to a fatal case of gotta-do-a-deal-itis.
In your quest to stay in the game you may convince yourself that a marginal deal is one worthy of your attention. Even worse, you may find yourself ignoring warning signs about the potential investment or the market as a whole. When you are knee-deep in the investment world it isn’t always easy to remain objective but your long-term survival depends on it.
Case in Point
A couple of years ago I was offered the opportunity to partner on a rehab deal. Another investor had found what seemed like a great opportunity but was short on cash. I had cash looking for an opportunity so I looked at the deal. It was an REO (foreclosure) in a blue-collar section of Las Vegas. It was an area that had reasonable demand and there was enough of a profit margin in the deal to make it attractive. I was in and we moved ahead with the plan.
As the Investors’ Realtor, the success of my business hinges on continually finding new prospects that are interested in purchasing residential real estate. One of the avenues that I have found extremely effective in this regard is the real estate club that I founded 2 ½ years ago. The Real Estate Insiders Club of Las Vegas has provided me, through bad markets and good markets, with a consistent venue in which to place myself in front of investors in the Las Vegas area. Whether you are a real estate agent working to grow your client base, an investor looking to share ideas with other investors in your area, or another professional in a real estate related trade, starting a real estate networking club can provide a valuable resource for the growth of your business.
Here’s how I did it:
As with any new project, the first step to success is creating a mission statement or a list of goals…what do you expect to achieve by starting a real estate related club?
I started the Real Estate Insiders Club with five goals in mind. The first was to network with other like minded investors. The second was to educate investors on the ever changing real estate environment through a rotating cast of speakers delivering talks on a wide range of topics. The third goal was for the club to provide a platform for presenting real estate opportunities to interested investors. The fourth was to turn a profit and add a stream of income for myself, and the last goal was to be able to put myself in the spotlight and use the platform for my own marketing purposes.
After establishing your goals you need to form a list of questions that must be answered in order for you to move forward. These questions should include things like: How often do you plan on meeting? Will you meet weekly or monthly or some other time frame? Where will you meet? What time of day? What types of attendees will you be targeting? How many people do you hope will attend? How many people need to attend in order to make the event profitable? How much money you can realistically afford to invest in the event? With a budget in mind it will be easy to decide on where you can allocate your expenses toward the club. If you have speakers pitching products or services, you will need to decide if you will be co-oping with them or charging them to speak. Will you be paying to bring in featured speakers? Will you offer monthly membership only or add annual memberships as well? Will you do other sponsored events and co-op with other seminar groups? Will you be providing food and drink as part of the event? Will you be filming the event and using the clips on Youtube and other marketing venues? Pay careful attention to all of these considerations…I lost money the first year of the club and afterwards had to make several changes in order to move forward and create a profitable meeting.
Last week, in my first post on the BiggerPockets Blog, I wrote about how I became the investors’ Realtor by being an investor myself, thinking like an investor, having marketing materials designed for investors, and being in the hottest spots for investor real estate purchases. This week I would like to expand on the idea of traveling to the investment hot spots. Being in the places where people actually want to buy, and are buying, will enhance your chances of becoming a leader in your field. Specializing in a niche within a niche will also help establish your reputation as a leader in your area of expertise.
As you recall from our last article, I was heavily involved in several real estate markets over the 2003 to 2006 period. Where ever the hottest market… I was there. I was in Las Vegas, Phoenix, Albuquerque, and North Carolina just to name a few. I stayed tuned-in to where investors were heading, as I was one of them, and invested in all of these markets myself. Since the summer of 2008 I have specialized once again in the Las Vegas valley, but this time it has been foreclosures and REO properties… not new construction homes. I knew it was time to gear myself back up for sales in the Las Vegas area as I watched the prices of single family homes and condos drop rapidly due to the glut of foreclosures flooding the market. These lower prices created homes that could be purchased and rented for very good cash flow… better than Vegas has seen in decades. I took the opportunity to begin educating myself about this niche in this market, develop my marketing materials, and get ready to welcome the investors that I knew would soon come running into the Las Vegas housing market once again.
Becoming An Expert
I cannot stress enough how important it is to identify a niche and establish yourself as an expert in that particular area.