Las Vegas buy and hold strategy?

Question

I live in Las Vegas and I am new to investing. My strategy was to buy properties that rent with positive cashflow. Appreciation is a plus but as long as the properties rent consistently if the market goes up or down I should be ok.

I've been thinking of going the fourplex route because of the higher cashflow and multiple units under one roof. My concern here is most fourplexs in Las Vegas are not in the greatest neighborhood.  I'm worried they might not be the best tenants and expenses and vacancies will be higher because of this.

I've stayed away from SFR because the average house is 300-350k and they dont bring in close to the same rents as a similar prices fourplex.

I've pondered the condo route too because they are cheap and it looks like the rents to purchase price are closer to the multifamily units. The HOA eats up a huge chunk of the cashflow on these but the hoa also covers a lot of the typical expense.

What do you find is working best for you? What's typical ccr for your strategy?

Bill B. · Answer

Your reasons are the reason I only went with SFR.

No tenant on tenant drama, and they tend to stay much longer than apartment or condo renters. (I’m at 2.5 years without a vacancy and 4.8 average stay today with no leases ending before March of next year.) low to no HOA fees and I would say more pride in their “home”

When a condo or fourplex renter finds out for a “few hundred more” they can have a yard, a garage, their own laundry, twice as many beds and no shared walls they move in to a rental home.

Today’s increased prices (I don’t think you have to spend 300-350k YET) cashflow is harder but I didn’t buy for that. I’m lucky enough to be in a position where if the property cashflowed positive or negative $200/mo it would make zero difference in my life. My aim was always to have paid off properties with more than $1000/mo cashflow. I didn’t need/want to be the big guy, I bought 12 and stopped. (Then I bought a couple lake homes in MN but they cashflow negative $800/mo as if to prove my point.)

Using just tenant’s rent I’ve paid off 8 of them (I used 15 year loans for lower rates and net interest.) I was comfortable in 5 years and “retired” in 7.

That’s a lot of rambling, But the point is more...

imagine the difference just one or two rentals will make in your retirement plan 15 years from now. If you get 10 or 20 awesome, but 2 will make a huge difference. Nobody expects cashflow from their Roth or 401k, just the opposite, they expect it to be negative “cashflow” until they need the money later in life, treat the real estate like that.

Move to a new primary and rent your current primary out if you have to, just get started.

John P. · Answer

Very well said Bill.  I totally agree with this.  A lot of people on BP see real estate as a job replacement and it can be but if just look to improve your future you are ahead of the game!  Great words "but 2 will make a huge difference."  So true!

I have three properties in Summerlin.  Had them over 3 years and just had my first tenant move out.   Only had about 2 weeks without rent coming in.  They don't make a killing every month but they are steady, taxes are low, insurance is low, and maintenance is pretty reasonable.   Oh ya, and as a total bonus we had some nice appreciation the last 3 years but that is just an unintended consequence of being in the game!

Bill B. · Answer

@Jim Owens

90% of my properties are north and east of 95, south of 215 and west of MLK. (89129/130/131/084)

As others on BP will attest it’s easy to get an hour or two of real estate rambling, (I mean info) from me. Just say you want to meet somewhere in the N/NW valley for pizza or a burger.

I’m happy to share addresses with real expenses and income instead of projections or proformas.

I might “threaten” to sell you a property to get you started but I haven’t sold anything yet. :-)

Ps. I saw rest of your questions after I hit post.

Most of my properties are pry worth $250-$300k, around 2000sf less than 20 years old 3/4 bedroom, 2-3 car garage, no grass, nice appliances.

Josh Edelman · Answer

Hey everyone, I am following this post. Great insight, I am moving to Vegas in March '20 and I am in the exact same as @Jim Owens almost word for word. I hope I can find a good deal. It sounds like SFR is the way to go then correct? I plan to househack it. I am currently deployed and moving in March so I am studying the area now (plan to move North west vegas). Thanks!

Chris Anderson · Answer

@Jim Owens

Hey Jim, the geographic higher areas of North Las Vegas I think are the best.  Homes are the same as anywhere in Vegas and 20-40k less in price. Great rental community as well. We buy our buy and holds there. You can find great prices in the mid 200's and a little less. Just remember that the higher you go in price, the rents do not reflect that. Meaning as prices go higher, rents do you not follow that pattern. Benefits of SFR is provided you do get good tenant search and find the right tenant, SFR tenants love to nest and stay for a really long time, especially if you are a good landlord.  You should be getting anywhere from 1350-1600 comfortably depending on bedroom, newness of things like appliances, and square footage.

Jim Owens · Answer

Thank you Bill and John.

Bill I will definately reach out to you for dinner or drinks to chat more about real estate.

John. What were your summerlin purchases like? 20-30% down? What type of rents to purchase price ratio?

Jim Owens · Answer

@ Bill Brandt. Thank you for the great response. Is there a target area you find the best? I know you said you don't need to spend 300-350 to get properties but what is the ideal property values to go after currently? What kind of rent are you getting for these properties?

Las Vegas buy and hold strategy?

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