Looking to start in Las Vegas

[Brian Hansen]

Want to start investing in real estate and hear to invest where you know and live first. Then i see other rules for rent based on price and cash flow and none of the properties in Las Vegas seem to come close to being cash flow positive unless I’m 40-50% down. Is this just the wrong market to be investing in?

[Young Yim]

On "invest where you know and live first" - I think that's great and it depends. For instance, I own and live in the Seattle area but none of the houses here would work as a cash-flow investment for me without creative financing or significant work. So I invested in Vegas where home prices are more reasonable (relative to Seattle) and where I grew up (familiarity with the area). If you are starting off and want to house hack or have more favorable rates by living in the home first, then I think investing where you live is must but it doesn't sound like that's what you're doing.

For Vegas, for me to be cash flow positive, I had to put down 30% and another $18k in renovations. I think it's becoming a hot market and it's clear that many people are moving to Vegas, and home prices reflect that. I still moved forward because that deal worked for me and I'm looking at Vegas as an appreciating market. More people and less supply of SFH. Cash flow positive is nice in that it pays for the mortgage and property management with some left over for future issues, but the upside is in the appreciation on the home and favorable landlord laws in Vegas (relative to Seattle). It can move up or down but the past year alone had very nice appreciation while other markets (like Seattle) had prices go down.

I think you can probably find better deals in other states or cities if you want to put down less. Just depends on what you're looking for and the amount of effort you want to put in. I've heard Ohio is a good place to consider BTW and may be looking there for my next property if the numbers work out.