All Forum Posts by: Joe O

Did you call @Tiger M. ?

Yeah, that's what I was worried about.  Of course you should take into account debt service, but there's no way you'll have 28.7% expenses not counting debt service.  It will likely be closer to 55-60% + debt service.  Where did you get 5% for estimated vacancy (and, as Tiger mentioned, what about collection loss?)

Sounds like you're way underestimating maintenance, vacancy, and don't have any management costs in there either (and if you manage, are basically doing it for free, the costs of management should still be counted in, even if you end up managing it).

GREAT advice by @Tiger M. 

I laughed out out loud at Tiger's number six (streets named after cities), and at your reply to it.   :D

Pretty much every experienced Vegas investor I know wouldn't touch the fourplexes here, due to location within the city.  Tiger gave some great reasons why.

Sounds like you have a handle on things though, @Mike Holland , and some good responses to Tiger.

Just to clarify for #1 - your expenses will be 40-45% and that should not be counting your debt service, and, as Tiger pointed out, your vacancy/collection loss will probably run in the 15% range (and that's if it's managed fairly well, otherwise it could be in the 50%+ range), so your total expenses before debt service is likely in the 55-60% range for the fourplexes here.

On #2, don't count too much on spreadsheets that look lovely on paper and then leave you stuck with a hot mess in real life.  Talk with some experienced investors as well.  Experience is a big benefit that spreadsheets just don't have.

I'm not sold on the idea yet, but it sounds like you're considering the right things before jumping in and getting over your head, so that's a good thing.

Ditto Tiger's advice to come to @Phillip Dwyer 's BiggerPockets meetup, next one is Tuesday evening July 29, would love to see you there and hear more details.

This doesn't even hit the 1% rule, so it's definitely not a deal, IMO.

Mandy, talk to @Phillip Dwyer about fourplexes here in Vegas.  The Vegas investors tend to stay away from them as they're all in fairly poor areas.  I'd love a fourplex in Summerlin, but it just doesn't happen, all of the areas they were built in (~30-40 years ago, generally) are subpar. So the tenants you get are the bottom of the barrel.

I sure wouldn't deal with the hassle of the tenants you'll have in that place for $100/mo./door (actually now that I think about it and recheck, you said only $130 total, not per door.. you should always shoot for at least $100/door).  In fact, you'll probably have trouble finding a good property manager for that type of investment, meaning you'll be doing a lot of that (not fun) work yourself.

You could snag these for just under 100k about 3 years ago, and a lot of us were passing back then (rents were maybe 2k/mo, so it just hit the 2% rule at the time).  Talk to @Troy Fisher  for someone who did buy 3 fourplexes back then (for around that price) and was happy with the appreciation (which you probably won't see now looking forward) but ask him about his tenants, property managers, etc... In fact, Troy may be happy to sell you a fourplex for cheaper than that price.  ;)

Overall it's not even worth a second look.   Start with the 1% rule and go from there.  :)

Definitely; thanks for the info!

The person interviewed in that Podcast, @Phillip Dwyer , also holds a monthly BiggerPockets real estate meetup in Henderson, you should come if you can come into town for it.

Latest reports are (I'm summarizing here) that we've been recovering for a few years, and it's picking up steam. 2014 should be even better economically for Vegas, and estimates are that we should be back to pre-recession levels by 2016.

More reading:

http://lasvegas.cbslocal.com/2014/06/17/report-economic-recovery-not-slowing/

http://www.8newsnow.com/story/25799311/report-employment-in-las-vegas-will-rebound-by-2016

http://www.lasvegassun.com/news/2014/jun/17/report-las-vegas-area-employment-will-rebound-2016/

That's good news long term for the stability of our housing recovery that's occurred.

I see what you did there.

Awesome. I'll be there, and try to let others know!

Sure, but that supply level was ridiculously low (three weeks or so?).

Right now we're at 2.5-3 months supply, maybe? That, to me (and historically), is still low.

I think we'll remain around there (maybe go to 4 months), but that (low) supply will be matched by low demand. Naturally we'll fluctuate somewhat, but I wouldn't be surprised if it hovers around there. Just my guess.

Completely agree with everything else you said, some stability in our market, and a positive year would both be great! :)