All Forum Posts by: John M.

Great post.

I own a property in an urban area of Las Vegas that even local investors stay away from because they think it's the hood.  If you look on a crime heat map it looks like a war zone so that scares away out of state investors also.  But the reality the area is a gold mine.  The location is absolutely amazing and high demand for quality renters, and there are plans for future development that will drive up the demand even more.  But unless you study the market or and walk the area yourself you wouldn't know that.  I have spent time there myself and would live there full time without any problem.  

I guess the good thing for people like us that do their homework is that's how you find deals is looking where there's little competition.

Yes that's why I think a person needs to physically check the area out, not just depend on crime heat maps.   I have seen the opposite affect also, you'll see an area that looks ok in a crime map but then you see the area in person and realize there's abandoned falling down properties and trash filled empty lots and maybe there's no crime reported because people are too afraid to go there, lol.

I think there could be a long period of growing inventory all over the US because with appreciation of the past 7 years many of the cyclical investors who bought from the bottom have a much bigger portion of their assets in RE, so basic investing rules would say diversify or move some to cash.  And I don't think it's a stretch to assume that probably the vast majority of the buying at the bottom was investors not homeowners, since it was being reported cash purchases were at all time highs.  So there could be a lot of potential inventory increases in certain markets, especially if those markets had a flood of cyclical investors who where buying at the bottom. 

That said I think Las Vegas has one of the better long term stories in the US for population growth, job growth, etc. so I can see homeowner and buy and hold investor demand stepping in and taking those properties off their hands.  I am personally saving up cash to buy more, so i'll be looking for some deals over the next couple years.

@Jason Baldwin My personal experience with Neighborhood Scout is that it is completely misleading and it is useless for trying to gauge crime.  For example my own neighborhood where I live says "safer than 22% of US cities", which is ridiculous.  Newport Beach, CA also 22%, lol are you kidding me?  What a joke! I live in an upper income suburb where nothing ever happens.  I'll let my neighbors know that we're all hood rats and we just didn't realize it, lol.

Seriously I would check out the area yourself in person and see what kind of vibe it gives off.  If you wouldn't feel unsafe living there yourself, then that's pretty much my own personal barometer as to whether anyone else would either. 

 If you're making $71,000 in real estate why are you in a corporate job?  Are you still supplementing your rental income with your corporate job?

@Will Hanner I know what you mean I am there also.

I have a plan though, which I call my 5 year plan.  I have a high paying job and no debt (I don't own a home but I do have small mortgages on my rental properties). so I live way below my means, save as much as I can to further invest in real estate, and save to build a good chunk of cash in the bank as a cushion.  

In 5 years although I won't be what I call "financially free" I will be what I call "financially flexible" and that's good enough for me.  My goal isn't to "retire" since I like to work (and honestly I don't have much in a 401k so I couldn't anyway).  But what I really want is the freedom to be able to take risk like start my own business, get into a startup, etc. but have a basic safety net or backstop in place in case things don't work out.  

Although my job is depressing for me some days because the environment is so opposite my personality (risk taker stuck in a very rigid political corporate environment), I just have to remember it's a means to an end.  And although I could quit and go somewhere else, it really comes down to "better the devil you know than the devil you don't".  

Formulate a plan, start to take action and work towards it.  Just doing that little bit can be very liberating.

@Jay Hinrichs  Gotcha.  It sounds like probably a bit more risk than I would be willing to take, but if I couldn't qualify for a loan I might risk it.  I guess as with everything it's all a balance of risk and reward...

@Jay Hinrichs Thanks I guess you learn something new every day in this business.  So is there not much risk to the buyer then other than if they accelerate the loan and the buyer couldn't get alternative financing?

If the loan isn't assumable then how can title transfer if the property is collateral for the loan?  Doesn't this put a cloud on the title in addition to put the seller in breach of contract?  This seems like it could create all types of problems, but maybe I am just unsophisticated.

If you own a condotel in Palms Place you can do short term rentals but then you are competing directly with the hotel.  What other type of building is zoned resort hotel?  None that I know of.

Condotels are not investor friendly, at least none that I have seen.  Between the high monthly fees, non-warrantable status of the building and competition with the hotel what kind of return can you really expect to get?