Are investors interested in flipping condos in Las Vegas?

Question

I moved to US from Europe a year ago. I'm renting an apartment now and thinking to buy a condo in Henderson, NV, rehab it and live in it myself untill the time comes to move on and sell it. I'm not thinking to hold it forever, it would be temporary solution for my housing while I live in Las Vegas area (probably a couple more years). I'm a wholesaler so it will not be a big challenge for me to locate a condo for less then a retail value. Concerns - 1. HOA DUES (heard a lot of bad stories!) When I move out and decide to rent it, it may kill the cash flow. 2.how hard would it be to sell a condo after 2-3 years? I see a lot of condos on Zillow that has been there for 150 days or more... 3. If you have funds available would you rather use it to purchase a condo, rehab it and save money (I'm renting now) OR get a first time home buyers mortgage (5% down) and use the cash to do a SFR flip with borrowing 20%-40% hard money on the investment? 4.Are there investors that focus mainly on condos? I see freshly rehabbed condos on Zillow once in a while going for 130-150k in Henderson. ***GOAL is to make the biggest ROI (and solve my housing issue) either it comes on saving by not paying rent to somebody else or by flipping a SFR. Looking for advices from investors, considering the facts that I have a full time job (which I like and not planning to quit, like most newbie investors) and renting an apartment now. Thanks

Louis Davis · Answer

@Lukas Vanagaitis Being a fellow wholesaler I would say you know the answer to your question already. Our whole business is based on numbers and locking the deal up at a discounted price. The difference is now you will be looking for yourself and not just your buyer. Choose a nice area and see what you like. Purchase is it AT A DISCOUNT so that you know you will make money when your ready to sell (barring a huge real estate market crash). Hope this helps

Robert Adams · Answer

Here is my advice.Stick with townhome or single family home. There are less financing restrictions and this factor will bring you more buyers when you go to sell.HOA's are in most communities. If you only look for non HOA communities you will filter out a lot of good properties. Find one with lower monthly fees and be sure to ask what restrictions they have as this could affect the resale.Look into the home is possible grant program and other down payment assistance programs since you will be living in the unit. This should cover majority of your down payment if not all of it. Most of the DPA programs you do not have to pay back. Free money.Also have your agent draft the contracts for the seller to pay your closing costs. This will keep more money in your pocket for other invesrments, rehabbing this unit, etc.Don't use zillow that site is a joke if you are looking for accurate data, values, and available listings. If you want to be setup on a direct feed from the mls contact an agent or if you are going after off market deals you will have to put in some leg work or $$ or both.Best of luck.

Phillip Dwyer · Answer

As Robert Adams mentioned, you will have more financing options with town houses than condos both when you buy and when you go to sell (your buyers will likely need financing). Thoroughly read through the financials in the HOA resale package to ensure the reserves are funded properly and no hidden assessments are lingering. You'll also want to check on any rental restrictions. Some HOAs don't allow any rentals, some have caps on the number of rentals with waiting periods for everyone else, and some have lease-length restrictions. I think the FHA 203k loan program would be perfect for your situation if you can find a good deal on a fixer.

Tami Russell · Answer

In Las Vegas' defense, there are hundreds of HOA's in our valley, and almost anything built in the last 20-25 years, including single family, belong to an HOA (or two). Laws were changed in response to the wrongdoing in the early 2000's, and there is more transparency than there has ever been.Caution is always advisable, but I think the bigger challenge for condos is finding buyers in the future.

Lukas Vanagaitis · Answer

Thank you for answers

Dani Sung · Answer

The Las Vegas market is interesting. My opinion is that you would only buy for cash flow and not for equality. The graphs I've seen have not shown appreciation over 10-20 years period. Just my 2 cents.

John P. · Answer

I saw some nice looking condos in Summerlin for around $100k. I think those would make nice places to live for a while and then turn them into a rental in the future. HOAs can be a problem but I think the stories are overblown and devalue condos unfairly. However, it is what it is and it can be harder to sell condos. That's true. I like it as an inexpensive rental property though.