Took the leap and got lucky with crazy fast appreciation.

[Joseph Heinen]

Investment Info:

Single-family residence buy & hold investment in Las Vegas.

Purchase price: $355,000
Cash invested: $30,000

How did you add value to the deal?

LVP Floors across entire house and new paint.

[Account Closed]

Post some of your numbers including your mortgage, property insurance, property tax, rental income, sewer use fees, trash removal, vacancy rate, cleaning between rentals, air conditioner repair, etc.. Las Vegas is so hot the air conditioners constantly break down. I am guessing your mortgage is about $1500 per month and with insurance, property taxes, trash removal and sewer use fees you will be paying about $2100 per month. I still have 2700 sq ft homes in Las Vegas where I'm collecting only $1800 per month for rent and my management company keeps telling me that is the maximum rent I can get.

Just today, I had a house in Las Vegas in escrow and when the buyer saw his inspection report he backed out of the purchase because the air conditioner motor was making a lot of noise, because the previous tenant's dog urinated on every baseboard in the house and there was bubbles in the wood molding. I didn't think anyone would notice the bubbles, but the inspector did. The water heater won't light and there are few more minor problems. Now, I have to go to las Vegas to replace every floor molding in the house and I will have to hire an HVAC contractor to repair the AC and hire a welder to repair or rebuild an iron gate and fence. My point is; I just paid $6,000 to clean, paint and carpet this house and I am guessing that if I had to hire contractors for the remaining work I will be spending an easy $4,000 to $5,000 making my total cost about $11,000. These scenarios have to be built into your projections and I think your cost of about $2100 per month is not so good a deal unless you get major appreciation.

When you rent homes in Las Vegas you need to make sure your tenants pay the sewer use fee and trash removal fees because the costs for those dig into your profits. If properties continue to appreciate, then you have have made a good purchase. But, the problem with Las Vegas is the rents are far too low and the cost to clean and paint between tenants eats up your profits Big Time. For every house I sold the cost to clean and make repairs was $6,000 to $12,000 and that was with doing the work myself with two of my employees.