All Forum Posts by: Trevor Richardson

Uh, aside from your woke question these prompts won't return much accurate data. It should return basic economic and demographic data but rental data, SFR data per zip codes is a pretty niche area of the internet.

Big proptech data companies have some of that but it's sparse. An AI inquiry asking to find the location of SFR rental properties to population is not something any AI chatbot I've tested can do.

“What is a cap rate” is an easy inquiry. it’s the specific rent data questions you have that will likely not return anything accurate. 

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It is time for a new quarterly update on the Reno, NV multifamily market. The reno multifamily report dives into sales data, rental rates and trends, and market information. Message me for a link to the Reno Multifamily PDF Report.

This report contains information solely based on the small multifamily (3-10 units), large multifamily (11+ units) and duplexes (2 units) within the Reno area. The report covers neighborhoods all over the Reno area. Below you can see the specific neighborhoods and their boundaries.

Below are the rental trends by unit type (*DATA PROVIDED BY JOHNSON PERKINS GRIFFIN APARTMENT SURVEY):

Below are the multifamily $/unit sales trends (*DATA PROVIDED BY WASHOE COUNTY ASSESSOR):

Small multifamily (3-10 units) had a simple average of $181k per unit. There were 24 units total sold during the fourth quarter and the total dollar amount of sales was $4.5m. Below you can see the percentage of the areas in which units were sold.

*data provided by Washoe county assessor

Large multifamily (11+ units) had a simple average of $174.5k per unit. There were 123 units total sold during the fourth quarter and the total dollar amount of sales was $23.4m. Below you can see the areas in which units were sold.

*data provided by Washoe county assessor

Duplex (2 units) had a simple average of $326k per unit. There were 6 units sold during the fourth quarter and the total dollar amount of sales was $1.9m. Below you can see the percentage of the areas in which units were sold.

*data provided by Washoe county assessor

The rental market in the Reno/Sparks area experienced a slight increase in rental rates in Q4 compared to the previous quarter, decreasing by $41 to $1,612. Seasonally, Q4 is usually a high point but this average is $13 less than in Q4 of 2022 showing leveling off of the market.

The overall vacancy rate increased to 3.09%, indicating there is still strong demand for rental properties in the area, but it is important to keep in mind the rent rate and vacancy data only include 80+ unit properties that are stabilized at 90% occupancy. There are several new projects taking a prolonged amount of time to reach stabilization and we believe underlying vacancy for the entire market, to include smaller buildings, is higher. Many new properties in the lease-up stage are offering concessions and we have noticed a higher than usual surplus of rental listings.

Below you will find the total new multifamily units:

*data provided by Johnson Perkins Griffin Apartments Survey

The number of units planned or under construction for multifamily properties decreased to 9,479 units. The most significant obstacles to new supply continue to be the limited availability of developable land, rising prices, and increasing construction costs.

*data provided by Johnson Perkins Griffin Apartments Survey

*data provided by Johnson Perkins Griffin Apartments Survey

Meanwhile, on the demand side, job growth remains robust as more corporations seek to expand or relocate to the area. Nevada has seen a high influx of inbound moves, which may be driving demand for housing. Furthermore, affordability concerns in the single-family housing market have further elevated the demand for multifamily properties.

Thank you for taking the time to read my post. Please feel free to reach out if you have questions or would like to discuss investing in the Reno, NV area.

In Reno, NV a good cap rate for stabilized multifamily is 5-5.5%. That means it’s new or a renovation was done.

We have seen some proforma cap rates hit high 7s or even 8s like a deal we just closed in Carson City (8units).

Basically since high interest rates northern Nevada has moved a full 1% up. 

Update 1/20/2024:

Tesla has broken ground on the Semi-Truck factory outisde Reno. This is going to be a major factor affecting Reno's housing in the coming years. For the first time in Reno's history the market will actually be manufacturing vehicles. This is a new phase for N. Nevada. 

I have spoke with some of the powers at Tesla here in Reno and this will have a dramatic affect on Reno's housing in the near future. If you are in the Bay Area, San Francisco, Oakland, San Jose, Sacramento areas and are fans of both Tesla and real estate investing. You need to be looking at Reno. This is very exciting as they are planning on 3k-5k-7k jobs for this first of it's kind electric semi-truck factory.

We will be monitoring and projecting how this will impact real estate investing for this critical and major regional development. 

Pic of the factory footprint on 1/19/2024

Here is the link to the Electrek article:
https://electrek.co/2024/01/19/tesla-finally-moves-forward-g...

BP Investors and Gamers,

I had an agent bring up an idea about hosting a online game lobby where you could invite serious real estate investors to discuss methods and share ideas. Think of it as inviting clients to a day of golf, but instead its virtual. You could organize a time to meet virtually and play something like a squad based game like a Call of Duty. Its like an investor meetup. Like Golf there is downtime during gaming.

Got me thinking and seems very "the future" where there are likley more and more serious investors that play video games for lesiure. Anyone think this is a good idea or that it could be fun?

I play some games when I have time and have a lot of real estate investing experience and guidence. I'm a BP investor friendly agent. You could link markets together, refer clients from market to market between investor friendly agents. Interesting possibilities.

Thoughts?

Quote from @Carlos Ptriawan:

in which zip code the employee of Tesla usually resides ??

They live all over the Reno/Sparks/Carson/Fernley areas. I think Sparks and Carson are major centers. But really there are Tesla employees all over the area. We get that question quite a bit.

Many are surprised to find out a lot of employees live in Carson City. Housing is more affordable there and with USA Pkwy and Hwy 50 there is access right to the factory. That corridor including Dayton are great spots to invest because there is very little housing. 

Update: We took a tour this week at Tesla’s Giga Nevada outside Reno on 1/4/24, my finger pointing next to the enormous Gigafactory ( currently 11k employees outside Reno) is where they are moving dirt for the pad for the Tesla Semi Truck factory line. Right now they are assembling the Tesla Semi Trucks in a warehouse below. This first of its kind electric semi truck factory will employ an estimated 5k or more, maybe up to 8k (!) more employees for the area. This new factory and job infusion to Reno’s economy is going to dramatically impact housing.

I predict that investors looking at buying Reno area single family and multifamily will be happy they did in 2024.

I don’t see why any California investor wouldn't consider or evaluate Reno and N. Nevada first before looking at other states. It’s the closest city outside California, Tesla is expanding the Gigafactory which is going to explode real estate in the Reno market. There are single family investments that cash flow positive. With the proximity and Silicon Valley backbone Cali investors should look here first.

Quote from @Summer Shelton:

Quote from @Trevor Richardson:

Welcome. Just a little terms cleanup, 5-10 is small multifamily. Large would be 50 or 100 units plus.

The challenge I see right now with small multifamily is the acquisition and getting a typical DSCR loan. These are a nightmare right now (depending on the market and properties cash flow). But I have been in battles and deals lately where the properties existing cash flow will require no less than 50% down. So if you have a $750k 6 plex opportunity (in my market) the buyer will need at least $375,000 to buy it. Interest rates and the conservative nature of lenders right now coupled with owners poor cash flow are making these hard to buy.

However because of all of that if you can get financing on a deal, the prices are good because 90% of consumers don’t want to put 50% down on SMF. So conversely I’ve seen spectacular deals lately primarily from cash or 1031ex buyers. 

Thank you for the feedback. I appreciate your insight on the current market. I'm really looking to find a deal that I can do seller financing with. I'm shopping in a bit more rural area of Missouri. The goal is to find an opportunity I can add value to from a mom and pop landlord. 

Seller financing will help a lot and yea Missouri is wildly different that my market for pricing and cash flow.