LAS VEGAS, AM I TOO LATE TO BUY?

[Mansoor Fazel]

Hey everyone,

So I would love to get some input from you regarding the market in the greater Las Vegas\Henderson area. I recently read in an article that they are experience great appreciation ( something like 9% year over year, and 30% in the past 3 years ) and know from friends that the housing market there is super cheap when compared to my hometown market, San Francisco Bay Area.

So I took a trip out there, and toured a half dozen properties, and have since been in touch with a realtor there who has sent me even more listings. The problem I am having is the properties are going up in value, but rents to seem to be keeping pace. Everything I have seen seems like I would be lucky to get a $100 cashflow per month, even without a property manager and minimal expenses. I have looked at Condos, SFRS, Condotels... nothing that great.

As a general rule of thumb I like to make around $400 or more in cash flow, this is so that I can split the investment with a partner and still make $200 a month on my investment. I have been able to keep this pattern for properties I have bought in California, Texas, and Missouri. But I cant seem to find those kinds of deals in LV. Is it even possible? am I shopping at the peak and therefore the wrong time?

What are your experiences ? Have any of you bough RECENTLY and are still getting a good cashflow?

[Christopher Brainard]

I hate to be the bearer of bad news, but if you're looking for cash flow on leveraged properties, yes you are too late. Additionally, in my opinion, the rise in housing prices was driven by lack of inventory, as most of the builders here were wiped out during the last downturn. There has been a ton of new builds in the last couple years and once building catches up with demand, housing prices are likely to level off and appreciation will return to more normalized rates. We haven't seen any huge rises in wages here, so the affordability of housing is still important to many renters, and if their wages don't go up, they simply can't afford higher rent.

We have still bought 4 units over the last year, but all were purchased at 80 or less of FMV, from distressed homeowners. If you want to find deals like that, you need to establish a marketing machine, as you won't find anythimg like that on the MLS.

-Christopher