Where to buy in Las Vegas?

[quote author="usctrojanman29" date=1232206863]

I'm sure there's still some downside left as long as the local economy is sucking wind, but many homes in Summerlin are getting down to $100/sf which make them begin to pencil out for investors. Rents typically run about .70-.80/sf for homes in Summerlin. So a 2,000sf house probably sells for $200k and will rent out for $1,400-$1,600. The other nice thing is that Summerlin has a Mello Roos called SID but the cost of it run probably about $600-$700/yr for a 2,000sf house. The Summerlin main HOA runs about $45/month. If you want to check out some listings off MLS, PM me your e-mail address and name.</blockquote>


How in the world does that pencil out for an investor? what kind of CAP?



I would be very curious to see your numbers on this, maybe I'm missing something (like an oilwell?)
 
[quote author="freedomCM" date=1232354537][quote author="usctrojanman29" date=1232206863]

I'm sure there's still some downside left as long as the local economy is sucking wind, but many homes in Summerlin are getting down to $100/sf which make them begin to pencil out for investors. Rents typically run about .70-.80/sf for homes in Summerlin. So a 2,000sf house probably sells for $200k and will rent out for $1,400-$1,600. The other nice thing is that Summerlin has a Mello Roos called SID but the cost of it run probably about $600-$700/yr for a 2,000sf house. The Summerlin main HOA runs about $45/month. If you want to check out some listings off MLS, PM me your e-mail address and name.</blockquote>


How in the world does that pencil out for an investor? what kind of CAP?



I would be very curious to see your numbers on this, maybe I'm missing something (like an oilwell?)</blockquote>
Ok let's look at the numbers....



Sales price of $200,000 with a rental rate of $1,500/month



Rent - $1,500

Mortage - $859 (assuming a 5% 30-year fixed with 20% down)

Property Tax - $200 (using 1.2% of purchase price)

SID - $51 (estimate based upon what my dad pays)

HOA - $45



Net Monthly Cash Flow before vacancy - $345

assuming a 1-month vacancy net monthly cash flow would be - $220



So your Cap Rate would be approx. 6.5% with one month vacancy
 
[quote author="Oscar" date=1232216609][quote author="usctrojanman29" date=1232206863][quote author="jriosdds" date=1232173768]usctrojanman -



Do you think Vegas is near the bottom? Can an investor cash flow in some of these nicer areas like summerlin?</blockquote>
I'm sure there's still some downside left as long as the local economy is sucking wind, but many homes in Summerlin are getting down to $100/sf which make them begin to pencil out for investors. Rents typically run about .70-.80/sf for homes in Summerlin. So a 2,000sf house probably sells for $200k and will rent out for $1,400-$1,600. The other nice thing is that Summerlin has a Mello Roos called SID but the cost of it run probably about $600-$700/yr for a 2,000sf house. The Summerlin main HOA runs about $45/month. If you want to check out some listings off MLS, PM me your e-mail address and name.</blockquote>
It a wasteland. Despite the county's best efforts to induce employers to move there for tax reasons, Vegas still has very high turnover in it's residency rates. With the hotels cutting back, and layoffs in the off-strip corporate sector, Clark County is ridiculously overbuilt. Anyone who lived there prior to the 90's boom, when Summerlin was still powerline roads and mesquite bushes, knows there are just too many homes that were built for people who won't end up staying there. Unless you plan to live there and make regular inspections of your rentals, I'd find another place to invest.</blockquote>
Bakersfield is a wasteland not Vegas. I lived and worked there for 2+ years so I know that for a fact. I'm not going to say that Vegas is like Orange County because it's not, but Vegas does have a few very nice areas like Summerlin that are a lot like Irvine Ranch. Vegas will suffer just like a lot of other places until the economy picks up, but don't think it's going to die and disappear.
 
[quote author="Woodbridge" date=1228436967]I was also thinking of purchasing in LV for a 2nd home/investment for tax reasons. Does anyone one have any information on the requirements for declaring Nevada as your filing state. The tax savings alone would make the investment worthwhile.



The extra 8-9% I'm paying in CA state tax is especially obscene considering that the money is wasted on paying for $85k/year salaries for correctional officers.</blockquote>


If you are earning money by working in California, then the state is going to want their money regardless of whether or not you claim Nevada residency. But at least your plan will give you the opportunity to tell those prison guards just how overpaid they are in person.
 
[quote author="usctrojanman29" date=1232357105][quote author="freedomCM" date=1232354537][quote author="usctrojanman29" date=1232206863]

I'm sure there's still some downside left as long as the local economy is sucking wind, but many homes in Summerlin are getting down to $100/sf which make them begin to pencil out for investors. Rents typically run about .70-.80/sf for homes in Summerlin. So a 2,000sf house probably sells for $200k and will rent out for $1,400-$1,600. The other nice thing is that Summerlin has a Mello Roos called SID but the cost of it run probably about $600-$700/yr for a 2,000sf house. The Summerlin main HOA runs about $45/month. If you want to check out some listings off MLS, PM me your e-mail address and name.</blockquote>


How in the world does that pencil out for an investor? what kind of CAP?



I would be very curious to see your numbers on this, maybe I'm missing something (like an oilwell?)</blockquote>
Ok let's look at the numbers....



Sales price of $200,000 with a rental rate of $1,500/month



Rent - $1,500

Mortage - $859 (assuming a 5% 30-year fixed with 20% down)

Property Tax - $200 (using 1.2% of purchase price)

SID - $51 (estimate based upon what my dad pays)

HOA - $45



Net Monthly Cash Flow before vacancy - $345

<em><strong>assuming a 1-month vacancy</strong></em> net monthly cash flow would be - $220



So your Cap Rate would be approx. 6.5% with one month vacancy</blockquote>
That assumption is wildly optimistic. I lived in Vegas for more than a decade and you'd be hard pressed to find any rentals with vacancy rates that low, much less a home. I'm not claiming Vegas is going to disappear, but it's growth in jobs/housing was fueled almost entirely by the credit expansion and exceeded sustainable levels a decade ago. Even in the higher-end areas of Summerlin, I expect prices to drop another 50% before a bottom forms.
 
[quote author="Oscar" date=1232358860][quote author="usctrojanman29" date=1232357105][quote author="freedomCM" date=1232354537][quote author="usctrojanman29" date=1232206863]

I'm sure there's still some downside left as long as the local economy is sucking wind, but many homes in Summerlin are getting down to $100/sf which make them begin to pencil out for investors. Rents typically run about .70-.80/sf for homes in Summerlin. So a 2,000sf house probably sells for $200k and will rent out for $1,400-$1,600. The other nice thing is that Summerlin has a Mello Roos called SID but the cost of it run probably about $600-$700/yr for a 2,000sf house. The Summerlin main HOA runs about $45/month. If you want to check out some listings off MLS, PM me your e-mail address and name.</blockquote>


How in the world does that pencil out for an investor? what kind of CAP?



I would be very curious to see your numbers on this, maybe I'm missing something (like an oilwell?)</blockquote>
Ok let's look at the numbers....



Sales price of $200,000 with a rental rate of $1,500/month



Rent - $1,500

Mortage - $859 (assuming a 5% 30-year fixed with 20% down)

Property Tax - $200 (using 1.2% of purchase price)

SID - $51 (estimate based upon what my dad pays)

HOA - $45



Net Monthly Cash Flow before vacancy - $345

<em><strong>assuming a 1-month vacancy</strong></em> net monthly cash flow would be - $220



So your Cap Rate would be approx. 6.5% with one month vacancy</blockquote>
That assumption is wildly optimistic. I lived in Vegas for more than a decade and you'd be hard pressed to find any rentals with vacancy rates that low, much less a home. I'm not claiming Vegas is going to disappear, but it's growth in jobs/housing was fueled almost entirely by the credit expansion and exceeded sustainable levels a decade ago. Even in the higher-end areas of Summerlin, I expect prices to drop another 50% before a bottom forms.</blockquote>
Oscar, get out of that garbage can because I think the fumes are getting to you. An 8.3% vacancy rate (1-month vacancy) is wildly optimistic even if the current vacancy rate in Vegas is 7.5%???? See the following link I got from No Vas...



http://lansner.freedomblogging.com/...ters-at-6th-fastest-rate/11922/#comment-95776



I've owned rental properties in Vegas for over 4 years now and never had a problem in filling any vacancies with a week or two. The key is to have a competitive rental rate. The only way that I see Summerlin prices coming down 50% or more is if So Cal prices come down another 50% and/or we are in a prolonged and deep recession (which is possible).
 
[quote author="jriosdds" date=1232363649]Summerlin going down to $50-60/SF is hard to believe.</blockquote>
Ditto, maybe some of the other more ghetto parts of Vegas but I'd bet that the bottom is probably around $80/sf +/- in Summerlin.
 
usc, I'm not trying to pick a fight. But the last 4 years are hardly what I would deem as "normal" for Vegas and I would be careful about basing assumptions on those years, even if Summerlin is the "Irvine" of Clark County. Summerlin was made possible by the influx of companies escaping California's high business costs in the late 80's and early 90's. It was the credit boom that made the development of the Green Valley area and the rest of Henderson possible, it was not driven by real demand. From 1990 until now, the number of dwellings has roughly doubled in Clark County. As housing prices continue to fall and credit tightens up, the average casino employee is not going to qualify for a loan under the stricter guidelines, leading to further drop in demand. When shows like Comdex are suffering 30% drops in attendance, it doesn't bode well for the rest of the trade shows that the hotels depend on for YoY income. Discretionary gambling went away with MEW, and there are not enough snowbirds left to snap up the cheap homes, if they even still have the money to do so. And what happens when the coming wave of non-casino business bankruptcies washes over Nevada? Do you think unemployment, currently ~7.9%, could rise another 3 or 4%... or more?



Look at the trend here and maybe you'll see why I hold my opinion:



<a href="http://www.accessclarkcounty.com/depts/comprehensive_planning/demographics/Documents/2008CCAverageHousingVacancyRateTrends.pdf">Clark County Vacancy Rates 2000-2008</a>
 
<a href="http://www.lvrj.com/news/breaking_news/37844824.html">Vegas office vacancy @ 17.3%</a>



<blockquote>It?s the highest level of vacancy on record, Voit Senior Vice President Kevin Higgins said. The rate has climbed 3.7 percentage points from 2007 and was below 10 percent as recently as 2005.



Absorption, or demand for space, retreated to 637,800 square feet in 2008, down 68.9 percent from 2.05 million square feet the previous year. Higgins said it would take two or three years of that kind of historical absorption to get vacancy back to 10 percent.



?There?s tremendous supply and some believe vacancy is going to increase further,? he said. ?That?s why you won?t see much new office product coming online in 2009.?



Office space under construction fell to 1.4 million square feet in the fourth quarter, down slightly from 1.5 million square feet in the same quarter a year ago, Colliers International reported.



Planned construction dropped dramatically to 340,800 square feet, compared with 3.8 million square feet a year ago.



Vacancy rates are expected to rise this year because of the ?dire? employment situation and the large amount of space under construction, said John Restrepo of Restrepo Consulting Group, who compiles quarterly market reports for Colliers.



</blockquote>
 
vegas has grown tremendously in the past 10 years. in the short run, it has experienced a bubble like anywhere else. in the long run, it will remain a well established community. i have heard of many health professionals (with good incomes) moving to Vegas for work. i'm pretty sure they're the ones capable of buying.
 
[quote author="hs_teacher" date=1232446603]vegas has grown tremendously in the past 10 years. in the short run, it has experienced a bubble like anywhere else. in the long run, it will remain a well established community. i have heard of many health professionals (with good incomes) moving to Vegas for work. i'm pretty sure they're the ones capable of buying.</blockquote>
So your position is that there is going to be a diaspora of health care professionals snapping up SFR's in the Las Vegas MSA, thereby propping up home prices?



I have my doubts, considering the plans Tom Daschle has for healthcare. But let's table that for a moment and look at numbers, specifically a roughly 300% increase in foreclosures resulting in 31k homes becoming REO in 2008. Not coincidentally, there was also a rise of 4% in vacancy rates over the last 18 months. Meanwhile, casino profits were down 69% in the fiscal year that ended last June... what do you think they looked like over the last 7 months? Last November, the unemployment rate in Las Vegas was 7.9%, up from 5.2% a year earlier. And attendance at the first big convention of the year, CES, was down 23% from last year. I sourced these numbers from the Las Vegas Review-Journal's website, as well as the BLS.



I suppose it is possible that Harry Reid strikes a deal with Tom Daschle to spend a few billion building a center that transcribes all the medical records into a national data base, providing employment for your anecdotal migration of health care professionals. I just don't know if its going to reinflate a local economy that was created on the back of cheap credit, MEW, and I/O ARM loans. But who knows, maybe we'll see a "Real Housewives of Spanish Trails" this time next year. But the above numbers, combined with a historical understanding of what fueled the latest Vegas boom in the first place, tells me that it's going to languish for a decade or more.
 
<blockquote>I suppose it is possible that Harry Reid strikes a deal with Tom Daschle to spend a few billion building a center that transcribes all the medical records into a national data base, providing employment for your anecdotal migration of health care professionals. I just don?t know if its going to reinflate a local economy that was created on the back of cheap credit, MEW, and I/O ARM loans. But who knows, maybe we?ll see a ?Real Housewives of Spanish Trails? this time next year. But the above numbers, combined with a historical understanding of what fueled the latest Vegas boom in the first place, tells me that it?s going to languish for a decade or more.</blockquote>


From what I am aware (and I lived in Vegas half of my life) Vegas was/is/and probably will be built predominantly on the gaming industry for the foreseeable future. So the boom that was created was probably artificial to a large degree. At the same time, 50% decline from current levels in Summerlin pricing is probably just as artificial if it does happen. To wit, the average $/sf around the turn of the decade was $70-80. That was just prior to the boom, and Vegas has never had a serious price fluctuation in either direction prior to that. It is now back down to $100-110 (for foreclosures anyway) so it probably has a bit more to go, but I would expect $85-95 is probably the fair price at this point. There's a chance that it would swing below that in the short term, but from a fair price standpoint that's probably a good benchmark.



My personal experience bear this out pretty closely. I bought back in early 2001, just as the boom was beginning, in the Silverado Ranch area for ~$75/sf. I sold that and moved out in late 2004, and stayed out until I purchased a 2nd home in late 2008. I bought at ~$110/sf in Rhodes Ranch, although for a much smaller house (I knew my purchase was premature, but what can you do with a mother who needs a house?). Right now, that has gone down to around $100/sf or even slightly less. The two areas are comparable so it's a reasonable compare. In a normal market, my $75/sf purchase in 2001 should probably be in the $90's by now. So, it's feasible to say the market is approaching normal at this point, sans market psychology factors. As for that, I think it will cause the market to languish for a number of years.
 
Just wanted to say 'thanks' for creating this topic. There are desirable neighborhoods all over the country and discussing them here would be helpful to many.. I remember reading an interesting thread about the Denver area a few months ago..
 
<a href="http://www.forbes.com/2009/02/12/cities-ten-top-lifestyle-real-estate_0212_cities.html">Ouch</a>



<blockquote>Still, empty neighborhoods are becoming an increasingly daunting problem across the country. The national rental vacancy rate now stands at 10.1%, up from 9.6% a year ago; homeowner vacancy has edged up from 2.8% to 2.9%. Richmond, Va.'s rental vacancy rate of 23.7% is the worst in America, while Orlando's 7.4% rate is lousiest on the homeowner side. <strong>Detroit and Las Vegas are among the worst offenders by both measures--the Motor City sports vacancy rates of 19.9% for rentals and 4% for homes; Sin City has rates of 16% and 4.7%, respectively.</strong> </blockquote>
 
[quote author="Oscar" date=1235380656]<a href="http://www.forbes.com/2009/02/12/cities-ten-top-lifestyle-real-estate_0212_cities.html">Ouch</a>



<blockquote>Still, empty neighborhoods are becoming an increasingly daunting problem across the country. The national rental vacancy rate now stands at 10.1%, up from 9.6% a year ago; homeowner vacancy has edged up from 2.8% to 2.9%. Richmond, Va.'s rental vacancy rate of 23.7% is the worst in America, while Orlando's 7.4% rate is lousiest on the homeowner side. <strong>Detroit and Las Vegas are among the worst offenders by both measures--the Motor City sports vacancy rates of 19.9% for rentals and 4% for homes; Sin City has rates of 16% and 4.7%, respectively.</strong> </blockquote></blockquote>
What is the source of their data? I call BS because my friend who works for BofA in Las Vegas has some appraisals (CRBE and Grubb & Ellis appraisals) dated in mid-late Jan. 09 and the apartment vacancy rate is a little more than 8% (up from over 4% and change back in 2006).
 
[quote author="usctrojanman29" date=1235474697][quote author="Oscar" date=1235380656]<a href="http://www.forbes.com/2009/02/12/cities-ten-top-lifestyle-real-estate_0212_cities.html">Ouch</a>



<blockquote>Still, empty neighborhoods are becoming an increasingly daunting problem across the country. The national rental vacancy rate now stands at 10.1%, up from 9.6% a year ago; homeowner vacancy has edged up from 2.8% to 2.9%. Richmond, Va.'s rental vacancy rate of 23.7% is the worst in America, while Orlando's 7.4% rate is lousiest on the homeowner side. <strong>Detroit and Las Vegas are among the worst offenders by both measures--the Motor City sports vacancy rates of 19.9% for rentals and 4% for homes; Sin City has rates of 16% and 4.7%, respectively.</strong> </blockquote></blockquote>
What is the source of their data? I call BS because my friend who works for BofA in Las Vegas has some appraisals (CRBE and Grubb & Ellis appraisals) dated in mid-late Jan. 09 and the apartment vacancy rate is a little more than 8% (up from over 4% and change back in 2006).</blockquote>
According to the article and slide show, the source is the U.S. Census Bureau. That might explain the discrepancy in the numbers as one uses the Las Vegas MSA while the other probably ignores North Las Vegas altogether.
 
What are the best golf course communities in Las Vegas? If I were looking for a townhome on a golf course with some views, and a public golf course to play on weekends, which ones are good? There are so many golf courses in Vegas that its hard to narrow down on one from afar. Google searches just give very vague descriptions.
 
[quote author="Goofy" date=1235615497]What are the best golf course communities in Las Vegas? If I were looking for a townhome on a golf course with some views, and a public golf course to play on weekends, which ones are good? There are so many golf courses in Vegas that its hard to narrow down on one from afar. Google searches just give very vague descriptions.</blockquote>
Red Rock CC is a nice one (not public) as is Bear's Best (also not public) and both in Summerlin. Angel Park near the JW Marriott and SunCoast Casino is a very nice public course in Summerlin. Summerlin also has the TPC course where the pros come out to play (not public). Badlands is another nice course (Queensridge golf course community).
 
[quote author="usctrojanman29" date=1235619420][quote author="Goofy" date=1235615497]What are the best golf course communities in Las Vegas? If I were looking for a townhome on a golf course with some views, and a public golf course to play on weekends, which ones are good? There are so many golf courses in Vegas that its hard to narrow down on one from afar. Google searches just give very vague descriptions.</blockquote>
Red Rock CC is a nice one (not public) as is Bear's Best (also not public) and both in Summerlin. Angel Park near the JW Marriott and SunCoast Casino is a very nice public course in Summerlin. Summerlin also has the TPC course where the pros come out to play (not public). Badlands is another nice course (Queensridge golf course community).</blockquote>


Thank you for the info. From the homes I saw while playing Bear's Best, I don't think I"ll be buying a home there anytime soon unless the CA lottery comes my way or a nice progressive slot payout.



For a course-front townhome somewhat near the city, would summerlin still be the choice? Looks like summerlin is the community of choice based on what i've seen on this thread.



Since redfin doesn't work which home website is good for vegas? trulia and homeseekers are also weak in LV.
 
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