Las Vegas! Zip codes, 4plexes, 2020 and beyond.

[Manoj Li]

Hello World!

Hope you’re doing great and that everything is very well in what you do! :)

I’m looking forward to invest in the Las Vegas market and have a couple of questions and would appreciate if the BP family can throw some light on it

1. What’s your bold/weird/sensible prediction for the Las Vegas RE market? I’m interested to know any latest developments in the area and how it might look in 2020 and beyond.

2. Any good RE agents and local team that you can refer?

3. I’m looking at 4plexes in LV mainly for cash flow reasons. Is there any other strategy that would work out better in this market? I understand everyone’s case is different but I’d like to hear your story! :)

4. Finally, what are some zip codes you’d completely stay out of in this area? And are there any ‘good’ zips for 4plexes here?

PS: I believe the market bulls got more fuel in the tanks(sorry bears) and hence wanted to look at this market though it’s considered hot.

Many thanks in advance!

[Dan Mumm]

Hi Manoj, welcome to the forum. Here are my thoughts

1. What’s your bold/weird/sensible prediction for the Las Vegas RE market? I’m interested to know any latest developments in the area and how it might look in 2020 and beyond.

>> As previously pointed out, pricing has increased year of year every year since 2012. We saw a slowdown in the rate of increase in 2018 and 2019, but inventory levels still remain very low compared to national averages (2-3 months vs 6 average). Most people expect Las Vegas to outperform most other major metropolitan markets in the USA in the long term. Short term of course is volatile and difficult to predict, especially with an election year coming up. My guess would be for the market to remain relatively flat.

2. Any good RE agents and local team that you can refer?

>> I'd love to apply for the job. I'm one of the top agents in town and am very investor-friendly. As an investor myself, I understand the nuances and specifics of the game. I'm also connected with a few wholesalers in town which can be a rich source of deals. Since I am doing a lot of business (~100 transactions per year personally) I also have a good volume of pocket listings and probate sales which are not on the market yet.

3. I’m looking at 4plexes in LV mainly for cash flow reasons. Is there any other strategy that would work out better in this market? I understand everyone’s case is different but I’d like to hear your story! :)

>> Fourplexes here are almost exclusively in C/D (high crime) areas with poor tenant profiles, high turnover, high vacancy cost, and high eviction/late payment probability. Unless you are a seasoned investor who is familiar with this investment vehicle, I would highly recommend avoiding. Vegas is difficult to invest in currently due to the rent/price ratio so I understand why you would gravitate towards this to get decent cashflow, but going to a lower quality asset to salvage cashflow isn't the best idea for a new investor. You are better off spending the time/resources to find a somewhat decent cashflowing deal in at least a decent area. See point #2.

4. Finally, what are some zip codes you’d completely stay out of in this area? And are there any ‘good’ zips for 4plexes here?

>> It's illegal for me to answer this question as a licensed agent, but you will likely want to look at a crime map which I'm happy to furnish for you. A face-to-face meeting could be beneficial to review all of these questions in further detail. 

Many thanks in advance!