Investing in Las Vegas? Where do I start?

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NoSoup4U

New member
I wanted to get your thoughts on the LV market right now.  Not sure if anyone here has delved into that yet.  If it is true that you can get a decent 3BR SFR for $60k and receive positive cashflow then it almost sounds too good to be true.  Are there some good sites that talk about what one would need to know before investing in LV?

How healthy the rental market is?
Which areas in LV are the best for investors?
Cost of paying someone to manage property?
Cash purchase vs Loan for such a small amount?
 
You should read the IHB (irvinehousingblog.com), IrvineRenter is big into cash-flow properties in Vegas.

I'm not so bullish on that market... it just doesn't seem like it has enough of a stable economy to support the huge glut of real estate that's been built out there in the last decade.
 
I'm wondering where we could find stats on where all the people in LV that lost their homes are now living?  Are they still living in LV and renting?  I wonder what apartment vacancy rates look like right now?
 
I like IHB, but I don't think Las Vegas is a great place to invest right now. I could see Las Vegas population having negative growth in the next decade. Where are the jobs? The affordability seems to be there, but the job growth isn't.

Too risky, not enough upside on the surface. Maybe IHB sees something I don't.
 
Not to get too off topic here but I was also considering Merced and Stockton as investment choices but my research is still in its infancy so any input would be appreciated.
 
NoSoup4U said:
I wanted to get your thoughts on the LV market right now.  Not sure if anyone here has delved into that yet.  If it is true that you can get a decent 3BR SFR for $60k and receive positive cashflow then it almost sounds too good to be true.  Are there some good sites that talk about what one would need to know before investing in LV?

How healthy the rental market is?
Which areas in LV are the best for investors?
Cost of paying someone to manage property?
Cash purchase vs Loan for such a small amount?
Click to expand...

I also agree that you should contact Larry for info on the Las Vegas market.  I believe that is what he is deeply involved with right now, and he will give you an honest perspective. 

One thing that I warn "cash flow" investors that I speak with, is that although Rich Dad Poor Dad is a great read and and contains good starting concepts, if you are only focusing on positive cash flow you are missing a critical part of the equation... namely TAV, (total asset valuation).

For example, if the property is purchased at $100K and you make $500/month profit after all costs, it is still a losing proposition to hold if comparable property values are dropping at anything >0.5% per month.  Note the Case-Shiller histogram link on my www.IrvineRealtorSite.com ...in all areas that I track there was a decline in value through March (notable exception of Seattle, WA). 

Here is the graph for just Las Vegas.  Your results may vary, but I'm not buying in Vegas until I start to see some sustained gains behind me.  Best wishes, -IR2
VegasCS03-2011.JPG
 
I know the Vegas market pretty well and my father has lived out there since 2002 so I go out there on a regular basis to see him.  I also used to live out there and had an active real estate license out there until I let it expire last year since I was focusing on Irvine/Orange County.  I have 2 rental properties out there (yes, I purchased them too early and am underwater on them but I am cash flow positive every month not taking the depreciation deduction into account).  I am fortunate that my dad takes care of both rentals for me, but I would recommend finding a good property management company before you go down the road of buying a home out there. 

You want to stay away from condos at all cost and only focus on the nicer areas of Las Vegas because that's where you'll tend to find more stable renters.  Areas like Summerlin and Anthem are at the top of the list (if you PM me I can provide you the zip codes).  Properties in these areas range from $80-$100/sf depending on the home (single or two story) and upgrades while rents will be around $.75-$.80/sf per month.  I would budget at least a 1-month vacancy factor and even use 2 months to be conservative.  $60k will not buy you a home in a nice area, that I am sure of. 

Redfin actually started doing business out in the Las Vegas market back in Oct/Nov 2010 so you can use that to track properties and check comps.  Pretty much 80%+ of the active listings are short sales or REOs.  If you need a realtor, I can email you my cousin's husband contact info...he's been a realtor out there for years and has been successful in the past 2-3 years so he must be doing something right.
 
Since I got a few PMs about the zip codes, I'll just list them here...

Summerlin (large masterplan community....I call it the Irvine of Las Vegas....www.summerlin.com) - 89138 (newest area), 89135, 89144, and 89134 (oldest area and one I woulnd't buy in). 

Anthem (smaller masterplan community) - 89044 and 89052

Since a good number of seniors move out to Las Vegas to retire, a single-story home with a nice floor plan with be a plus when it comes to renting it out (hence why these homes will sell for $100-$120/sf in Summerlin and Anthem).  There's a Mello Roos called SIDs in both areas but it is a faction of what we see in Irvine (around $600-$900/year) and only lasts for 10-12 years.  There's a wesbite where you can check the balance of the SIDs but I need to find it.  Property taxes are due 4 times a year in Vegas and are around 1% of the purchase price.  Nevada implemented their version of property 13 years ago where property taxes increases are capped at 3% per year if the home is a primary residence (8% per year for rentals).
 
USCTrojanCPA said:
Since I got a few PMs about the zip codes, I'll just list them here...

Summerlin (large masterplan community....I call it the Irvine of Las Vegas....www.summerlin.com) - 89138 (newest area), 89135, 89144, and 89134 (oldest area and one I woulnd't buy in). 

Anthem (smaller masterplan community) - 89044 and 89052

Since a good number of seniors move out to Las Vegas to retire, a single-story home with a nice floor plan with be a plus when it comes to renting it out (hence why these homes will sell for $100-$120/sf in Summerlin and Anthem).  There's a Mello Roos called SIDs in both areas but it is a faction of what we see in Irvine (around $600-$900/year) and only lasts for 10-12 years.  There's a wesbite where you can check the balance of the SIDs but I need to find it.  Property taxes are due 4 times a year in Vegas and are around 1% of the purchase price.  Nevada implemented their version of property 13 years ago where property taxes increases are capped at 3% per year if the home is a primary residence (8% per year for rentals).
Click to expand...

What is your opinion of zip 89148 in Vegas?
 
davenlei said:
USCTrojanCPA said:
Since I got a few PMs about the zip codes, I'll just list them here...

Summerlin (large masterplan community....I call it the Irvine of Las Vegas....www.summerlin.com) - 89138 (newest area), 89135, 89144, and 89134 (oldest area and one I woulnd't buy in). 

Anthem (smaller masterplan community) - 89044 and 89052

Since a good number of seniors move out to Las Vegas to retire, a single-story home with a nice floor plan with be a plus when it comes to renting it out (hence why these homes will sell for $100-$120/sf in Summerlin and Anthem).  There's a Mello Roos called SIDs in both areas but it is a faction of what we see in Irvine (around $600-$900/year) and only lasts for 10-12 years.  There's a wesbite where you can check the balance of the SIDs but I need to find it.  Property taxes are due 4 times a year in Vegas and are around 1% of the purchase price.  Nevada implemented their version of property 13 years ago where property taxes increases are capped at 3% per year if the home is a primary residence (8% per year for rentals).
Click to expand...

What is your opinion of zip 89148 in Vegas?
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That's a decent area just south of Summerlin, especially Rhodes Ranch (small masterplan community) which is South of the 215 Beltway/Warm Springs between Fort Apache and Durango.  You should be able to pick up a home in that zip code for $65/sf to $90/sf. 
 
homer_simpson said:
I am going to travel out to Summerlin and Spring Valley this weekend to check out some homes.
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Would love to hear what you think after your visit.  I'm interested in the same and yes, the schools in these areas look pretty good (based upon what I see on Redfin).
 
homer_simpson said:
Any activity with this recently?

I am going to travel out to Summerlin and Spring Valley this weekend to check out some homes.
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The most desirable parts of Summerlin are those West of the 215 in the 89138 and 89135 zip codes.  You'll find that single story homes trade and rent at a premium to their two story counterparts. 
 
irvinehomeowner said:
Are the schools good? Do they have a good Korea Town? And how is the weather?

I've been told those are indicators of a great investment area.
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The schools do leave a lot to be desired out there.  That being said, there are a few very good prviate schools out there (my cousin sends all her kids to the privates schools...K-12).
 
No good Korea town near by? No good investment :)

irvinehomeowner said:
Are the schools good? Do they have a good Korea Town? And how is the weather?

I've been told those are indicators of a great investment area.
panda-emoticon-48.gif
Click to expand...
 
There's a Chinatown but there is no Korea town.
Baby Irvine said:
No good Korea town near by? No good investment :)

irvinehomeowner said:
Are the schools good? Do they have a good Korea Town? And how is the weather?

I've been told those are indicators of a great investment area.
panda-emoticon-48.gif
Click to expand...
Click to expand...
 
I am a big advocate of investing in your back yard. Have you guys all considered Moreno Valley, Rancho Cucumunga, IE before venturing out into Vegas?

 
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