Multi Family investing in Las Vegas?

Question

There has been many postings and even a Pdcast on investing in Las Vegas specifically with SF deals,, but I haven't seen much discussion on Multi Family investing there.  I just spke with Rich Weese and he suggested starting a post on the pros and cons of the Las Vegas Multifamily market.  I'd love to hear from locals about their trials and tribulations.  Thanks for your input!

Phillip Dwyer · Answer

Vacancy will be high on most properties under A class mostly for the reasons Troy Fisher pointed out.

Troy Fisher · Answer

Ivan Gerrity, rental prices are low, and there's an abundance of rentals.  We have a vast inventory of SFH Rentals in the valley.

Why rent a $400 apartment in a bad part of time when you can find a room mate and rent a house for $800?

The Economy is still in the tanker here, and unemployment is still high.

There is still a shadow inventory of homes in foreclosure, people are living for free in their homes, why rent when the bank wont kick them out?

Robert Adams · Answer

It is pretty common for people from other parts of the country to come to Vegas and look for multifam in newer areas but most of them get discouraged when they see the older areas (as it is almost impossible to find MultiFam that are in newer areas in Vegas). Then they either make adjustments and proceed with the older areas or they go to a newer area and purchase condo/townhomes/or SFR.

As far as where are most people investing....There are investors for all types of RE I think it comes down to the buyer's comfort level as well as their investment strategy. I prefer smaller SFR 3 bd 2 bath or condos in newer areas with low crime rates and good schools. Reason being that if the market takes a down turn those areas will not depreciate as fast do to the fact more people still want to live in those areas. The other areas with higher crime and lower school ratings will take it on the chin harder should the market shift. With all of that being said if the numbers are right I will buy anything anywhere.

Chris Williams · Answer

I've been looking at quads as well. They seem like good deals till you realize they're mostly in an area of town I wouldn't want to be after dark. Where do most people in vegas seem to be investing ? Single family homes? Flipping? Ect?

Mike Holland · Answer

The reason I got into smaller multifamily properties in Las Vegas because there is a good size market for them, you can pick them up between 130K and 160K at 10% cap.  People in the working neighborhoods need a place to sleep too.  I've actually got an eye on 5 more fourplexes within the same area.  There is allot of potential in this area that many do not focus on.  A big chance to make a difference too.

Daniel Turkin · Answer

Ivan Gerrity we are seeing rents start to come back a bit on the Multifamily side as a result of home prices rising, as people are not able to compete with the investors flooding the market with cash, so apartments are starting to see vacancies drop.  Vacancies are a bit higher on the A product but we're seeing good positive movement on our sites (90 - 200 unit buildings, B to C+ product).  We have increased our rents and our occupancies are averaging 92% as a portfolio.

Phillip Dwyer · Answer

Single family home prices have gone up a ton.  Rents have not.  Rents were declining for much of 2012, but not a steep decline.  On the multifamily side, Daniel Turkin will be able to comment on the larger product trends (100 unit plus).  The C and D class stuff for the most part has high vacancy and depressed rents, but asking for sale prices have been climbing regardless.

Ivan Gerrity · Answer

My understanding was home prices/home rents had gone up significantly, but perhaps the prices are still dirt cheap.

Ivan Gerrity · Answer

Hello Phillip, I'm interested in larger properties than 4-plexes.  LoopNet shows a good number of properties several of which are listed as bank owned.  One other note of interest is almost all show occupancies in the 80% range, a far cry from the 95+% I see with my properties in the Denver Metro area.

Phillip Dwyer · Answer

Troy Fisher will likely have some input on this topic in regards to the 2-4 family segment.  Are you interested in this or larger properties?

Multi Family investing in Las Vegas?

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