All Forum Posts by: Tom Kastorff

Lot of very good responses. I recently moved to 89138 and love it, PM me if you have any specific questions. But would I buy here and turn it into a rental to live in down the line? Unsure. I have no clue how many renters there are in my hood, but I doubt there are many. I'm also doubtful that $70k saved will get you very much. With closing costs and fees you're looking at under $350k since you'll need 20% down being an investment / non-owner-occupied. 

If looking purely at "what zips are best as rentals" obviously that is a very different question and answer from where is the best place for you to buy and live in a couple years. I would rethink your plan IMO. Drive out, stay at a bunch of hotels - Marriott has various properties all around LV / Summerlin / Henderson you can try out and drive the hoods, get a feel for what you like. That's what we did. 

Good luck. 

I think mom (and/or you) might be thinking a bit aggressively - you state cash flow AND live for free? That's a tall order, anywhere.

As @Spencer Cornelia notes, most MF in LV are not in desirable areas, mostly C. I have never had a search show me a MF in a B+ neighborhood, although I am new to the area. Maybe they do happen, but probably unlikely and or uncommon. I think you'll need to reset expectations here. If you want B+ neighborhoods you will have to creep very close to Summerlin / Henderson areas, and those are mostly nice condos or large SFH. Not a lot of MF living, which are typically in abundance near the strip, but not where mom will want to park every night.

As Spencer also notes, most condos here are in strict HOA environments, which adds rules and complexity to renting rooms. You would have to call each listing and talk to the HOA before bidding, to be safe. I have no idea how common or in-demand room renting is here, but I can't think it is too common in B+/A hoods. Might be a small tenant market, which could add vacancy risk to your plan.

The SFH home with casita option might actually be the best play, but your acquisition cost would be higher.

Then you mention transition to a PM. Why would she need that if living in the MF or condo? So now you want a real unicorn - cash flow + live for free + pay for a PM to manage.

Hmm ...

 +1 also interested.. just moved here. 

Originally posted by @Mary Jay:

Originally posted by @Eric Fernwood:

Today we sent our investors a special update on the impact of Coronavirus to the Las Vegas market. I thought it would be helpful to share it here.

There are multiple canceled events and conferences. Hotel occupancy is defiantly down. When I drive by the casinos on my way to places, the parking lots are not as full as I would expect. Also, for some strange reason, toilet paper is in short supply in the stores, but Kleenex is readily available. So, we are seeing the same panic we read about in other cities.

As to the impact to our segment of the Las Vegas real estate market, we have seen NO (zero) changes. If anything at all, we are seeing an increase in activity. More about this later.

Good properties are still going under contract in 1 to 5 days. Inventory levels continue to fall. Below are some charts for single-family homes from the MLS as of yesterday.

As you can see, demand has not decreased, prices are increasing and inventory continues to decline. However, if the panic caused by the Corona Virus continues for an extended period, I believe it will impact every real estate market. But we are not seeing any impact at this time.

For example, we listed a property for sale yesterday (2020-03-12) morning and had six showings for the day, including three in the first 4 hours after it hit the market. We received a full price cash offer in the evening. We made offers on two properties in the last two days and both are competing with multiple offers (one property had 9 offers and the other an unknown number of offers.) The Las Vegas real estate market today seems to be unaffected by the general panic over the Coronavirus.

On rents and such, we are seeing increases, not decreases. We had a single family home listed 4 days ago and received two rental applications yesterday. And, while the stock market is going crazy, we are not seeing any rent turbulence. Tenants sign one year leases, and they have to have a place to live. Even during the 2008 crash, our clients saw no decrease in rent or vacancies. We target a tenant pool that remains employed in good times and bad.

I think the fear is summarized on the chart below.

As always, the disadvantage of real estate is the lack of liquidity. The advantage is a very stable and reliable income stream with tax advantages and inflation protection combined with appreciation (assuming you buy in a good location). What we are seeing is more interest in a stable and reliable income stream by potential clients. So, if anything, the stock market turmoil is increasing the sales of investment real estate. We think that now is actually a great time to buy investment real estate in a growing market to add stability to your investment portfolio.

Agents, please share what you have been seeing.

Is it true that there are lots of homeless and drug dealers these days all over Vegas? Basically the whole strip now is as bad as  North Las Vegas blvd used to be...

 No. "Las Vegas" is a very large city. The strip is not the whole city. Are there more homeless/druggies near the strip than usual, yes probably due to covid and joblessness and evictions and people having nothing to do but loot and riot. But it is not "all over Vegas" to be clear. 

+1 ... have a place in upper village near Westin .. 

Here you go ladies... list of all complexes, each links to all the details of each (HOA fees, what it includes, etc..)(not my site, found this a few years ago when I started my mammoth condo search, it is very handy)

:) 

http://www.mammoth1.com/condos...

I was very clear in my posts that you can be profitable if you self manage, but that is tough to do for most people without a big network and trusted team. You don't just show up to a new town and have a trusted team in an hour, it takes time. If you have to use a typical PM with standard 25-35% fees, that is where you walk the fine line of no ROI. Investors just need to do their homework and run numbers, as usual.

@Alex Sabio I am mainly responding to the OP's post, it looks like mid-thread you injected your own topic and questions. Highly recommend you start your own thread, to get specific recommendations but also to respect her post. 

I just purchased a new primary residence, so my investment prop searches have slowed, and I plan to wait out the rest of the year to see how the pandemic plays into more or less inventory. Most desirable locations are too frothy right now because of low rates and bored and hungry investors trying to land a deal. The 2 or 3 locations I am still following lightly are just overpriced compared to likely returns for an STR. That's what I have seen in big bear, too many biggerpockets type investors trying to buy-in, and I just don't see how most of the current price levels can be profitable rentals unless you purely self manage. I am still following one CA ski town that I already own in, otherwise I am going to concentrate out of state going forward.

Define what "We don't want to overspend money since our mainly interest is to gain high ROI." means to you? Cash flow? Appreciation?

I have looked very closely at 2 of the locations you are interested in, earlier this year - big bear and PS. I did not find "high ROI" with either unless willing to self-manage. Both locations have very high property manager (PM) costs that wipe out nearly all profit.

Also neither city is all that "friendly towards STR" unfortunately, as others have pointed out. PS bills itself as the most difficult town in the US for STR (the local Town admin for rentals told me that on the phone)- they have a nearly $1000 a year permit cost, capped number of nights you can rent (34 or 35 rental instances), someone has to be there to check-in guests, etc. Arduous, and that means a costly PM. There are several folks on this site that do well in the area, but typically outside PS, in palm desert or la quinta or elsewhere, and usually with bigger party/executive homes that can rent for big groups and big dollars, but then your up front costs are higher. I could not make the numbers work, I bid on a few properties in Feb, and glad I did not get into escrow before the pandemic. There are only a couple condo complexes that allow STR (most are monthly minimum), and one during the pandemic changed its HOA rules from 3-4 night minimums to 14 day minimums. The rules can always change, and often for the worse. I love PS but doubt I will ever consider an STR there anytime soon again.

BB is similar - yes STR are popular, yes the town is somewhat friendlier, but after doing research, including talking to a couple guys I met on this site, again I could not find a PM that was lower than 30-35% monthly fees, which eradicated all profit. I have no desire to self manage. Finding super reliable housekeeping and a local handyman (for weekly check-in/wellness visits, changing bulbs, replacing lost or stolen items, housekeepers do NOT do that stuff) is too risky unless you know a lot of people very well, built a team you trust. A first timer in the area likely needs to hire a real PM unless you live very close by. I was also looking in Moonridge, found a couple cute homes, decent priced (300-400k), but they would not gross enough to cover all the PM costs and make much profit to be worth while.

I am looking at other vacation areas instead of these.

@James M.  

I own in Mammoth, and have spent extensive hours the last ~8 months looking into both PS and Big Bear. Not as familiar with Palm Desert, Jon D has posted often on that, and friends tell me it is better/more chill on that side vs. PS. Also far less restrictions. I would start there. If I revisit that region, I will go PD instead of PS. 

The STR restrictions, as you have noted, are many in PS, in fact the Town itself admits possibly worst in the nation. I recommend spending some time reading through this page and all associated, all the info you need is there, including the $995 annual permit etc. If you PM me I will give you the main guy's info, any time I saw a prop I was eyeing, I emailed him to ask for clearance, any past issues or permit concerns, etc. He was very helpful. https://www.palmspringsca.gov/...

Big Bear I would abandon. I did. I called several PM's and could not find any under 30-35%, so unless you are super familiar with the town rules and regulations, have a rock solid trustworthy housekeeping crew and local handyman to fix things (most HK's won't even change a light bulb for you, or batteries, so you need a handyman or PM type person), I don't see how you can make a profit unless you self manage. Several BP'ers have posted they are profitable, but only self manage. I ran numbers on several prime location and size properties, and with PM costs, could not come close to profitable.

If you buy right in Mammoth, you can do well, but again PM fees eat 30%+. Self Managing can be profitable, but likely you live 200-400 miles away, cannot stop by on drop of a dime, so you must have rock solid team in the area to SM. I use a PM and eke out a profit most years and my family uses it a bit, but never on key high-dollar holidays or weekends. I have also been eyeballing another property here for almost a year, and IMO prices are super inflated and have not dropped much since onset of COVID. TONS of properties are hitting the market, just in my super specific MLS parameters alone I got an email with 5 new props today. But prices are holding high, I don't see any that I could make a profit on unless I get an accepted lowball or you simply wait and see how next ski season does. Owners are already hurting from the last 5 months of no-profit, if the ski season is drastically cut on lodging and availability, folks will really rush to sell. I spent the last few weeks walking a friend of a friend through his buying parameters and looking at properties up there, and for what he wants - 2-3br under 400k - there is almost nothing, especially if you want anything near turnkey, or walkable to canyon or village. Upside is Alterra/Ikon will be investing multi-millions into mammoth in the upcoming years, so if you can get in now, it will continue to pay off.