Any suggestions for buying a multi family in the Las Vegas area?

Question

Hey guys, I’m Interested in investing in a multi family property in Las Vegas or Nevada… Just wanted to get suggestions or advice. Thanks!

Jay Hinrichs · Answer

good luck with it. just like anything be cognizant of the quality of the tenant base.. if your talking 4 plex's in this area they can be pretty rough around the edges.

Terry Lao · Answer

@Joseph Linares

Welcome, looks like you are a newbie to Bigger Pockets. Not sure if you noticed, but the two people who replied to you question are local, experienced, and highly knowledgeable. Hello Jay and Bill.

Now historically, the Las Vegas market is #1 in the nation in when it comes to appreciation by percentage. Followed by #2 Seattle, and #3 San Jose/Bay area. This is over period of past 2-3 years. The top spot was occupied by Seattle until about last June. See Case-Schiller top 20 city index.

https://tradingeconomics.com/united-states/case-sh...

For 2019, inventory has risen 100%, to about 3% available , while 6% is considered balanced market between buyers and sellers. If you look at Redfin, a search will reveal available listings for SFR is 4576, condo/townhome 1986, and multi's (2-4 units) is 126.  Just based on percentages, this means that for every 100 SFR, there is about 3 multi's. (4576/126=2.7). Thus, multi's more rare than SFR. Interest rates started going up in Nov/December, which put downward pressure on sales. However, interest rates have been going down in Feb/Mar, so much so that applications have increase 2-3% on a weekly basis. This means sales in Spring should be very good.

Now, with all that said. The 4plex is the best choice due to economies of scale and treated like a SFR when It comes to financing. When you reach 5 units, it all changes and treated like commercial.

Now, what is your goal?

Terry

Casey Powers · Answer

If you don’t know how to manage rentals, you will cost yourself a lot of money trying to do it on your own. A good PM is cheaper.

If a PM is managing multifamilies at 8%, they’re either doing it as a loss leader to get the listing when you want to sell, or are flat out too cheap and won’t be able to do a good job. Cheap and good never seem to come together with property management. Margins are super thin.

For all the people saying it’s ok to self manage rentals from out of state: FYI, Nevada state law requires that you have someone reliable within 60 miles of the property, that tenants can call when needed. That’s usually going to be a property manager, not some handyman or friend or relative (all of whom will likely be unreliable when needed). Of course some people get away with it - until they get caught with their pants down.

Bill B. · Answer

Nicest fourplex area I’ve seen in Vegas is the gated community @ hacienda and Maryland. If you’re young and single or your partner is up for the adventure, house hack one of those first. Be wary, the prices vary a lot depending on how fast they want to sell.

Sergio Vega · Answer

Most Properties in Las Vegas Will Cash flow but the question is what is your goal? What cash on cash return are you looking for? You can get into a Multifamily using an FHA loan, but you would be required to live in the property a year, the downpayment would be 3.5%. Or you could do conventional and do 20%. I would do the FHA because it has a lower barrier of entry.

Joe Linares · Answer

Hey Maurice, thanks for reaching out to me. Wow amazing job! Good price on the property as well. That’s my goal! I want to put 100k down. I just need to find the right property. Like you said God is good!

Maurice Smith · Answer

actually just closed on a 4plex in las vegas back in feb. check out my recent post ( https://www.biggerpockets.com/forums/850/topics/685999-las-vegas-investment)

Maurice Smith · Answer

Yes I have property management in place... you can message me for reference if you like

Terry Lao · Answer

@Joseph Linares

What city are you in? Sounds like Southern Cal or Bay area, because as an out of state investor, are you going to manage yourself or obtain a property manager? If property manager, will eat into your profits about 8%. I had situations with both, and I can say that it can be done by yourself. Are you looking at 4plexs with HOA or not? This expense range from 550 to 800 per month. One of my HOA's includes water, sewer, and another excludes water, sewer, and trash. This expense is about $175-$250 per month.

Terry

Any suggestions for buying a multi family in the Las Vegas area?

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