All Forum Posts by: Martin L.

Missed Terry’s post about 4 plexes in Vegas. I’ve been TRYING to find them, but all the ones I’ve seen have been built in the 60’s and early 70’s. I don’t want a building older than me! I already feel myself getting old and my doctor’s bills are getting higher. In an apartment building, those doctor’s bills are going to translate into big bucks. Terry, have you been looking at these old buildings or have you been finding newer? I’d love to buy a 4 unit townhouse complex, but I just can’t find any for sale.

There’s a lot of back and forth in this thread, but both sides really are correct for different purposes. I love the Vegas market, it’s done very well for me in terms of appreciation and my properties all cash flow. I’m just a small investor that happened upon the whole thing by chance, but Vegas has been good. However, it’s definitely a tough market to break into as a newbie investor without cash, but it’s not impossible. Parts of Spring Valley, Hender-tucky (Henderson), and parts of North Las Vegas all come to mind as areas that a new investor could still break into, but competition has also been fierce. As far as ‘pre-recession highs’, I see the market still about 25%-30% or so below the peaks in my area (Southwest) but with far far better market conditions than back then. I believe Vegas still has quite a lot of room to grow. Vegas didn’t recover as fast as the rest of the country, which is why it’s making such big improvements now. Too bad my wife’s risk tolerance prevented me from making more aggressive moves earlier on, but every property has cash flowed within a year and none have been negative. Appreciation has been fantastic and the rental market has been really good, especially the past year. It’s been a landlord’s market. If you do Section 8, then it’s seriously booming, probably 20-30 Sec 8 inquiries a month during the short periods that my properties have been open. Still, the recent booming growth has made me a little nervous. Since most of my eggs are in one basket. I have been looking to buy another property, but I’ve been reluctant to do it in Vegas again, despite my own predictions. This isn’t because I’m not confident about the future of Vegas, but that I don’t want a single bad event to potentially wipe me out. I think even a new investor could try their luck in Vegas, in the right neighborhoods. After all, tying your luck is what Vegas is all about.

I rented out my first house when I moved.  It's basically how I ended up in this line of investment.  You're talking about nearly $1300 cash flow, which is frankly awesome.  Having a rental property will also give you a tax deduction, so you'll get more taxes back.  Having a paid off house will not give you anything except a bigger target if someone wants to sue you.  I remember a long time ago in my business law class in college, we discussed the benefits of having a mortgaged home (tax deductions) and the liability of having your primary paid off (basically each state has an exemption value for your primary home.  If your home is worth less than the exemption value, you can't lose it in a lawsuit.  If it's worth more than the exemption, it can be included in a lawsuit against your net worth).  This was all a very long time ago, so laws may have changed or I may have remembered incorrectly, but my key takeaway from that class was to always make sure my house was worth less than the exemption value. 

Of course, playing the flip side... if you lived in your old house for at least 2 of the last 5 years, you can avoid some capital gains tax, use the money to invest in some other cheaper properties, and possibly generate more cash flow than just the single property.  That's more work, more risk, but more potential as well.

Plus... I would never rent to my own grandmother.  That's cold.  I'd get the family together to pay the rent for her, but @Brian Adzadi is right.  Senior homes are frankly much better.  My grandmother lived in one for years before she passed, and she loved it (we paid for it, she did not).  She had her group of friends and everything was much more convenient than if she lived on her own.  They usually have call buttons throughout the apartment in case she falls or has other issues, and professional (technically) staff that can help her in an emergency.  Don't mix business with family.  IF she really wants out of where she is, get the family to chip in together to take care of her.  She's your grandmother!  Then invest in something that will actually make money for you (to help pay for grandma's rent)

Just in case the previous posters didn't convince you... seriously... no condos. Generally try to avoid ANYTHING with an HOA/management fee, but the higher the HOA the harder it is to cash flow... and these things tend to increase over the years as well. With very few exceptions, condos are also more difficult to rent out.

All these posts sometimes make me feel like I must be doing something wrong.  I actually fell into the whole landlord thing by accident.  Upgraded during the downturn and held onto my first home because I figured it would be better to rent it out for a while and selling once the market returned.  The result was so good that I kept doing it.  However, I don't go to turnkey companies or buy ratholes.  I just look at houses that I think I would be willing to live in, in neigborhoods that I would be willing to live in, buy them (usually at market rate, sometimes direct from a builder), and rent them out.  I typically have a very minimal cashflow the first year or two, but appreciation has always been solid and cash flow has improved every year.  I haven't been doing this as a business, it's been an investment for me so my strategy is perhaps different, particularly since I have a wife with an extremely low risk tolerance, and i'm frankly lazy when it comes to this stuff and my strategy works since it doesn't require a ton of effort.

Sometimes I wonder if I should have jumped into a bunch of ratholes back then.  But of course... I didn't want rathole tenants and all the potential nightmares that come with them...  In the end, I just think there is no "wrong" strategy.  The people here who have bought ratholes have outlined their success, and more power to them.  I'm certainly envious.  However, you will also see posts about all the rehabs that ended up going horribly wrong or nightmare tenants, so bear in mind that ratholes are all about risk.  But as with most high risk investments, you also have a much higher potential reward.  Are you all about "Go Big or Go Home" or "Slow and Steady"? 

Oh, and not to say that a nicer property can't end up with a bad tenant or a hidden issue.  It's just less likely.  A "nice" property isn't NO risk, just less risk.  I bought my last property directly from the builder, assuming that this way I can at least have no major physical issues for at least the first ten years or so.  Wish me luck!

Jonathan Gonzalez I have done some investing in Asia and it’s not as easy as the US. Forget about mortgages in most places unless you’re a resident with local income. There are also complex rules in some places (China and Vietnam come to mind, but I’m sure there are others) where it could be challenging to move your money back OUT if you need to. It’s always easy to move it IN. That said I’ve had amazing appreciation on properties in Asia although rental income is generally extremely, extremely poor. If you can manage to get a mortgage, you will almost always have a negative cash flow, even with like 50% down. The market is extremely different here, and every country is also different. General statements about investing in Asia (the largest continent in the world with dozens of different countries with their own laws) is too broad to cover. You did mention Japan, which is pretty open so moving money in and out shouldn’t be an issue but unfortunately I don’t know much about that market. But as I mentioned earlier, I’ve had amazing appreciation on every property I’ve ever purchased in Asia. 20-30% a year isn’t unheard of and Ive seen some locations that have done that in a MONTH. These hot zones have mostly cooled off now, but there are still some out there. Parts of Manila have been seriously popping recently for instance. I’d suggest narrowing your focus and really learning everything about the laws for that country.

Welcome to BP, Danielle. I used to live in Vegas as well, and continue to invest there, although I’m used to a different segment of the market. You’re right about the competition, it’s been fierce for a while now, but I expect there are still a few hidden gems out there. I’d say parts of Spring Valley, N LV, and Henderson might still have some opportunities. Good luck with your search!

John Lingel I was really lucky. I had a friend was heavily investing in property who introduced me to her realtor. The realtor is a husband and wife team that also manages, with an extensive team of people who handle the repairs as well as contacts to just about every industry you will need. Insurance, financing, etc. while I continue to generally use my own financing (I have a company I prefer called Guild Mortgage because they don’t usually sell their loans) it’s still been useful to tap into their contacts to shop. We’ve become slightly more than business associates over our extended relationships and they help with and handle quite a bit of my affairs in the US. However, they only handle a very specific part of Las Vegas (Southwest). I admit that I don’t remember what the name of their company is because they were always more personal from the start, but they do have one. If you want to invest in Southwest Vegas specifically, just PM me and I can pass their information to you. Bearing in mind that they won’t be the ‘cheapest’ options you can find but I’ve found them reliable and the peace of mind has been worth the marginally increased outlay for me (since I’m not there to manage them directly).

I’m an expat in Asia as well, and I have to say that the key to being able to continue to invest from abroad lies entirely with your team. I do turnkey because it’s easy and I’m lazy. Being abroad is a little more work but at the end of the day, as long as you have a good realtor and property manager they can do most of the heavy lifting for you. Then Docusign your way to more wealth!