Las vegas Flippers and Rental Investors

[Jordan Goulet]

For those that are in the vegas market Flipping or having Rentals what are your full opinion on the vegas market ?

In question, is it really a good market to even invest in regarding Rental ROI?

For flippers what is your success rate in good, medium, and bad areas in terms of flipping in Vegas?

For an overall question is this a good market overall?

[Eric Fernwood]

Hello @Jordan Goulet,

There are investment properties with excellent cash flow available but, as always, you have to pick good properties that target the right tenant pool. We currently have 7 such properties under contract.

As always, the tenant pool is critical, especially in turbulent times like today. Based on what I am hearing, owners of C class and most B class properties are hurting because of the COVID eviction moratorium in addition to the normal high turn-over rate. In contrast, out of a population of +160 A Class properties our clients purchased from us, 5 tenants that are delinquent on the rent will be evicted if they do not catch up. This is worse than the 2008 crash. At that time we had zero reduction in rent, zero vacancies and no evictions.

Below is what we are consistently seeing, and we do 5 to 10 such properties each month.

• Single family price range: $250,000 to $350,000
• Townhouse price range: $200,000 to $260,000
• Return: 4% to 8% with 25% down financing including debt service, taxes, insurance, management, and reasonable maintenance and vacancy provisions.
• Average tenant stay is 5 years and the average turn cost is about $500. Time to turn a property, about one month, sometimes less.
• To date, we have had 6 evictions in the last 14 years from our single family and townhome properties. (For C Class (we have very few), on average there are 3 to 5 evictions/skips a month.)
• Time to rent after renovation: 5 to 14 days

I am working on our annual Las Vegas 2021 Investor Outlook and below are a couple of stats that you may find interesting. The full report will be out mid January.

• Rents increased about 9% YoY.
• $/SF increased about 7.9% YoY.

So, if you buy the right properties that target the right tenant pool, now is a fantastic time to invest in Las Vegas real estate. Especially so with the low interest rates. The challenge is finding these properties. Good Class A investment properties represent about 0.4% of the total available properties. We can only find them because we developed our own data mining software. Manually, it would be difficult since not only are good properties few and far between, they go under contract within days. So, there is little time to act.