All Forum Posts by: Justin Ignacio

Ooooo all great feedback, thanks everyone.

@Kurt Brauner, the HOA fees for the condo are accounted for in the "periodic fees" of the cash flow calculation.

@Bill B., the students are currently paying $1300/mon actually but looking at comps, I thought $1200 was a more realistic, conservative estimate. Regarding having them renew the lease, my financing requires owner occupancy so I'd have to live in the unit. I'd love to purchase SFH instead of a condo but my whole intent is to downsize and reduce my monthly expenses. 3 bd/2 ba SFH are now in the neighborhood of the $270k that I paid for my current house so it really wouldn't save me much. But I do think you have a good point about avoiding neighbor on neighbor conflict. Lastly, I don't know the garage/parking situation and the condo is actually further from my work but I'll only have to deal with the longer drive for about 8 months.

@Omar Merced, anything in particular that you don't think looks good about the house as a rental?

Thanks again everyone, it's so awesome to actually get feedback from people that are actively investing and not just the internet peanut gallery.

Hey Las Vegas Investors,

I'm a real estate newbie looking to learn.  I'm transitioning career fields in about a year and anticipate a significant pay cut.  I currently own and househack a 4 br/3 ba in the Centennial area.  Prior to leaving my current job, I plan to rent out my current home and downsize to a condo. My intent is to reduce my monthly expenses while simultaneously getting started as a rental property owner. Here are the numbers if I rent my current house (thanks @eric fernwood , I'm borrowing the equations you've used on your posts): 

Purchase Price: $275,000
Comps: $320,000 (house with exact same floorplan/landscaping across the street sold for $337k on 3/13/20)
SqFt: 2,200
Beds: 4
Baths: 3
Stories: 2
Financing: 30 yr fixed at 3.25% ($0 down and closing costs were covered by seller)

Cash Flow = (Income - DebtService - ManagementFee - Insurance - RETax - PeriodicFees)

Cash Flow = ($1700*12 - $1150*12 - $1700*12*8% - $528 - $2985 - $49*12) = $867/yr or $72/month
Note: this formula doesn't account for occupancy or maintenance however the house is 5 yrs old, in good shape and I have a contingency fund dedicated to these expenses.

Now here's the info on the potential condo purchase:

Location: Southwest Las Vegas, near 215 and Buffalo
List Price: $175,000
Comps: $185k-$195k
SqFt: 1,167
Beds: 3
Baths: 2
Financing: Pre-approved for conventional 30 yr fixed at ~3.7% with 5% down

The seller currently has tenants with a lease that ends in June.  The tenants are students at UNLV.  With all the COVID uncertainty, I put in an offer at $160k with contingencies that allow me to back out for any of a multitude of reasons.  I anticipate about ~$10k in basic repairs and maintenance when I move in. Here's what the potential rental revenue would be if I decide to rent it out in the future (calculated using a sales price of $165k):

ROI = (Income - DebtService - ManagementFee - Insurance - RETax - PeriodicFees) / ( DownPayment + ClosingCosts + RepairCosts)

ROI = ($1200*12 - $770*12 - $1200*12*8% - $480 - $850 - $170*12) / ($8250 + $2000 + $10000) = 3.1% ROI

Cash Flow = (Income - DebtService - ManagementFee - Insurance - RETax - PeriodicFees)

Cash Flow = ($1200*12 - $770*12 - $1200*12*8% - $480 - $850 - $170*12) = $638/yr or $53/month

I can cash flow positive for both (not accounting for occupancy and maintenance) and downsizing would help to reduce my monthly expenses.  It would take about $20k to buy/fix the condo.  I have $$$ saved up to cover the acquisition costs and also unplanned expenses.

Am I missing anything?  Thoughts on the overall gameplan?  Looking forward to input from the interwebs.  @Bill B. I'm sure you've got some thoughts. Thanks in advance!

Justin

Sounds good!  Feel free to let me know if you're still looking for people to assist.

What's the latest on the REIA? How do we continue to get this off the ground? I'm still interested in assisting if there are ways to help.

Hey Christian,

Where exactly are you located? I'm in a similar situation where I'm house hacking and looking to BRRR my next property. Seems to be that finding deals is the hardest part.

Thanks for the input @Casey Powers and @Bill B.!  All good things for me to consider.

I don't have $250K "lying around" but the intent would be to find a private investor or hard money lender for a short term loan while I secure long term financing.

I'm not tied to this specific neighborhood but I am looking for something with easy access to the US95.  This just happened to be the first property I've found in the area with a motivated seller.

Thanks for the advice @Bill B..  I don't have the plans/cost of the 3rd bedroom "locked down" yet.  Maybe I'll do more research into what a contractor would cost.

Going back to the numbers, it seems like the overall market is cooling off here in Vegas.  Maybe it's just the holidays/end of year but I guess time will tell.  Also I should have clarified, the comps were for 3 BR, ~1500 sq ft.  So I'd have to add the bedroom to make a fair comparison.

It's not a friend or relative, it's an out of state investor who was renting the property and now is looking to sell sooner rather than later.  Not sure on the details of why the rush but talking to the listing agent, a cash offer would go a long way to reducing the price.

Hi Casey,

Current house is 4 BR, 2.5 BA, 2200 sq ft, built in 2016. HOA is $50/month and PITI is $1460. Comps are renting for around $1600. Doesn't leave much room for management, occupancy or maintenance but I've got a 30 yr fixed at 3.25% so I figure I can hold on to it even if I cashflow slightly negative and maintain a long term outlook.

Hey Las Vegas Investors,

I'm looking to get my start with real estate here in Vegas!  I currently own a 4-bedroom house in the Northwest that I bought at retail price 3 years ago.  I'll be traveling for 3-4 months at a time for work starting in May 2019 and therefore I'm looking to downsize to something smaller and more practical since I'll be gone so much.  I'm currently house hacking and have a roommate who's willing to move to the smaller home.  I plan to rent out my 4-BR after I move out.

I'm currently looking at 2-3 BR homes and need some advice about what's a good deal here in Vegas.  I'm looking at a property with the following stats:

2-BR, 2 Bath, 1500 Sq Ft

Cash offer price: $245K,

Comps: $295K

Built in 1995

Zip Code: 89128, close to summerlin parkway/95

There is a den that can easily be converted to a 3rd bedroom and the house is in good condition but the bathrooms/cabinets are original to the home.  Seller is looking to expedite sale hence the lower cash offer.  I'd need to find a cash lender but I know I can secure long term financing.

My gameplan would be to convert the den and update the bathrooms sometime while I'm living in the home.  I'll continue to house hack so that about half the mortgage is paid for.  Eventually I plan to rent out the house once I move out after a few years.

Am I crazy? Is this a good idea or will I lose my shorts? Just looking to get some input from people with more experience.  Thanks in advance!

Justin