All Forum Posts by: Brendon Borrego

@Jake Sklanka I am not @Tim Farrell, but I believe the Mid Town area is still growing and will be growing quickly. We will see Midtown grow even further south as there is more building going in at Park Lane. Where I am amazed is the fact that some homes are selling for low 200's while a house across the street is selling for 400,000. I would think the conditions make for a great flip market.

Another area that I am interested in that has seen large growth, but not sparked the conversation that Midtown has is over off of Victorian by the Nugget. With a second luxury theater taking over the old Cinemark theater, huge amounts of apartments going in and a vacant building with potential to be a huge commerce center (Bourbon Square), I believe the area is destined to have a huge revitalization. 

I am looking forward to what the Reno/Sparks area has coming and would love to hear any opinions on what the market has to offer.

Brendon

Hello,

I am currently evaluating a property for a potential build out and was hoping to get some advice. The property is in Northern Nevada and is currently zoned SF40. The property is within close proximity to a major rode as well as about 5 minutes of a major freeway. The property is 1.3 aces which means it could hold roughly 52 units. The reason I want to convert from single family to multi is that the property does not make sense as a single family property due to the cost of building individual units as we would only be able to fit about 12 units on the sight. 

With all this being said, I was curious if anyone has gone through the rezoning process to switch to multi family. I am also interested to hear if anyone has dealt with a sight like this and has an idea of how to fit more units under the current zoning. eAny advice given is greatly appreciated!

Brendon Borrego

That also assumes that there is zero debt associated to the couple which isn't extremely likely but still doable. I received an article last week that the median home price within Reno just reached $305,000 and is still climbing. With that being said, we have already reached the limit of home values these jobs can afford. I don't think a collapse will be headed our way, but I do believe that we will see home prices begin to plateau until rent values come up and encourage investors to push towards SFR's instead of multi family.

@Michael S. Helton you are a much more sophisticated investor than I am so I really appreciate any information you share and look forward to hearing more from you and others on this topic! 

Michael S. Helton thanks for giving a place to talk about this topic. Reno and Fernley from what I have seen are going crazy for homes. The prices have sky rocketed with little sign of slowing. Homes are being built as quickly as the builders can pull permits for them. Land prices have shot through the rough for anything that is remotely buildable. What I am interested to see is how long we can continue this growth. We have huge amounts of jobs flowing to Reno and Fernley from the TRI Center, but a majority of these jobs are factory workers getting paid below 20/hour. With that being said, will home prices begin to taper and level as the prices get out of reach for the incoming employees or will they continue to see 5 and 6% growth for the next couple years? Either way, it's an exciting time in Northern Nevada! Brendon

Great job on that find. The quick payday of the 40K seems rewarding looking at what you have invested, but I am a big fan of the buy and hold game when it comes to the long term rewards. That being said, if you take the $778 of monthly cash flow and take that in to the $40k pay day, then you would have paid off that $40k in just over four years. That means in four years, you have a property that is still producing just over $9k a year that is still sitting in your portfolio. Yes you will have an extra cash outage that you will be sitting on in five years when the wall needs to be replaced, and  out another $10k in renovations to cover, but even then, you will be sitting  with $40k in equity in the property (without taking appreciation into account).

This deal seems like it would be a great buy and hold to me and seems ideal for continual revenue. Either way you have done a great job on this property with buying and your outlook. Thank you for sharing and I am excited to hear what you do with the duplex!

Originally posted by @David Affonso:

I don't have a lot to add but am very interested in Modesto, Reno, and generally Bay Area secondary markets + Nevada due to familiarity. I sometimes wonder about long term stability but I guess it's more just matter of checking the numbers.

My uncle bought a side SFR in Reno as both his kids went to UNR and got in state tuition plus rented out the extra 2-3 rooms. It was great considering the situation but he seems to think rent rates aren't so great to warrant buying more. He lives in Manteca and is an agent. He always talks highly about Modesto.

Reno could be a great market currently for the speculative investing. There are a lot of companies moving to Reno in a very short time. The only down side is that currently, all properties that are in a quality and rentable area with good school zones only offer 5-10% CAP rates. Most multifamily's I have seen are in a fairly similar boat. This makes the deals that much harder to find, but does offer the upside of the economic growth that is coming.