Hello from Las Vegas, NV

[Mike Holland]

Hello all,

My name is Michael Holland and I wondered across the Biggerpockets pod cast on YouTube and decided to join the forum.    I am 33 years old  and a 14 year Air Force veteran.    I was recently separated because of some torn muscles in my shoulder so time to start the civilian life.   I work full time as a DoD contracted security manager and going to school full time getting my MBA. 

I decided to start a business a few years back purchasing small multifamily properties rehabbing them and holding the property and providing a variety of services to improve the quality of product I offer to my customers.   With being in the military for many years I was a long term apartment tenant and saw how the majority of investment and multifamily property tenants have been treated; as a source of income.     I plan on changing that one property at a time.  It has only been recently that I started moving forward on the business plans seeing I will not be collecting a retirement at 38 as planned previously.  I'm in the middle of trying to close my first multifamily deal in the Las Vegas area so wish me luck.

I am new to the multifamily property business personally but it's been in my family for decades.  My father has been doing buy and holds in Dallas, Texas since 1956 and my father-in-law does build and sale property in Peru.  So I have several touch stones to go to for advice at both ends but I am never afraid to reach out and ask questions when I don't know something.  My ear is always open for unsolicited advice as well and I'm looking forward to digging into the site and getting as much information as possible to improve my understanding and positioning in this market.

[Tiger M.]

Mike,

Welcome to BP.

Couple rules of thumb experienced 4 plex buyers use in Vegas that might help you crunch some numbers and analyze the deal.

1-projected expenses plugged into the APOD annually run 40-45%

2-vacancy needs to include rental loss which will run +/-15% minimum combined.

3-you can have the nicest, cleanest, hippest property but how do the neighboring landlords run their properties? You can change your slice of the world, but if the guy next door rents to pit bulls and allows cars on blocks in the driveway, your good tenants get fed up and bail. This is all thanks to cluster zoning of multifamily by thoughtless city planners over the past 50 years. Notice there are no 4 plex's in Summerlin or Anthem. 

4-Never buy a Vegas 4 plex based on what you do with it to increase rents. It rarely works out that way in this market. Look at all the hype from Tony Hsieh going downtown revitalizing and then where vacancy rates are in the multi fam in the area. Little has changed as far as tenant quality and effective rents.

5-The best money made in 4 plexs's are the ones in the path of progress where they are bought up by developers and torn down.

6-Be very wary of any property that is on a street named after a major US city.

7- Its great to have a dream, however nightmares prevail and I have seen it in the eyes of people walking in our office every year begging to help them get out of a building.

8-in this market where a great return is hard fought to obtain, why would a seller walk away from a 25% ROI cash cow? Hmmm...

9-Buy it only if you can steal it. 

Yep, I'm a pessimist on the vegas 4 plex market. Thats after owning and managing for 20 years though. I don't want to burst your bubble but at the same time I hope you investigate before signing loan docs. They say happiest day of owning a boat is the day you buy and the day you sell, insert 4 plex for boat. Whatever you do, I wish you the very best and that everything works out to your benefit!