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Old 10-13-2008, 09:53 AM
 
27 posts, read 31,987 times
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Smile Real Estate investment in Vegas?

Where will be the best place in Las Vegas to puechase a house as an investment?

Will it be better to stay close to the Strip? or running away from it?

Thanks in Advance?
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Old 10-13-2008, 11:24 AM
 
Location: NW Las Vegas - Lone Mountain
15,757 posts, read 20,291,968 times
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It is possible at the moment to find homes in Las Vegas that will actually show positive cash flow. That requires a combination of low price...under 200K and low cost per SF...under $90 per SF.

NW is the best area I know of.

I suspect you can do reasonably well on small condos though I do not recommend that unless you are local and can do hands on management.

The strip area is an appreciation play in general. I would think the possiblity at this point of doing something reasonable varies between zilch and nada. There may well be good buys on and near strip but it is probably a ways in the future.
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Old 10-13-2008, 03:20 PM
 
27 posts, read 31,987 times
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Is it hard to rent a place at a price range of 200K?

What rent price i can ask for on a house worth of 200K

Thank you,

Ron
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Old 10-13-2008, 03:44 PM
 
Location: Here and there, you decide.
9,487 posts, read 14,553,830 times
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around 1000-1200 depending on the size of the house and location
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Old 10-13-2008, 08:59 PM
 
Location: NW Las Vegas - Lone Mountain
15,757 posts, read 20,291,968 times
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Quote:
Originally Posted by airics View Post
around 1000-1200 depending on the size of the house and location

Watch out for the SF costs Airic. If you are buying at $85 per SF. a 200K house is 2400SF. And for a 2400 SF house I would be trying to get under $80. Maybe 75.

But for a rental I would avoid getting that big. Maybe 1800SF. or even less. At 1800SF and $85 PSF you are talking about $153K.

Rentals in that area go for about .5 times the SF plus 450. So 1800 should get you 900+450 or 1350. With 20% down you got a 745 a month P&I, 120 for taxes, 40 for insurance, 25 for HOA...$930 Total. $420 provides ample reserves and a nice return. Tax advantages and appreciation would be on top of that. At right around $100 PSF you will run out of room. Still might pay based on tax advantages etc but you are not going to make any real money on your ivestment.

The deal looks better at even bigger houses but note that they bigger houses can be hard to rent. So as you get to 2500SF note that you may well take months to rent them out. I have a client who does that by renting to a fraternity of MP from Nellis. But not the neatest renters in the world.
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Old 10-13-2008, 09:55 PM
 
Location: Las Vegas, Centennial Hills
2,013 posts, read 4,515,645 times
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Quote:
Originally Posted by olecapt View Post
Watch out for the SF costs Airic. If you are buying at $85 per SF. a 200K house is 2400SF. And for a 2400 SF house I would be trying to get under $80. Maybe 75.

But for a rental I would avoid getting that big. Maybe 1800SF. or even less. At 1800SF and $85 PSF you are talking about $153K.

Rentals in that area go for about .5 times the SF plus 450. So 1800 should get you 900+450 or 1350. With 20% down you got a 745 a month P&I, 120 for taxes, 40 for insurance, 25 for HOA...$930 Total. $420 provides ample reserves and a nice return. Tax advantages and appreciation would be on top of that. At right around $100 PSF you will run out of room. Still might pay based on tax advantages etc but you are not going to make any real money on your ivestment.

The deal looks better at even bigger houses but note that they bigger houses can be hard to rent. So as you get to 2500SF note that you may well take months to rent them out. I have a client who does that by renting to a fraternity of MP from Nellis. But not the neatest renters in the world.
With all due respect Jim, I think that your mortgage numbers are a bit off. Of course I don't know what rate you are basing those numbers on. What I am coming up with is a rate in the mid 7's on a 30 year fixed with 20% down on a non-owner occupied property and a credit score of 720+ (of course other factors will apply). This is, of course, without any buydown points. Based on a purchase price of $150,000 and a loan amount of $120,000, the principal and interest payment would be more like $840 a month. At 75% loan to value which would be a loan amount of $112,500, the rate gets much closer to 7% even, perhaps 7.125% with no discount points, and the P&I payment would be at 7.125% would be about $758 a month. These figures are based on a 12 day lock. Just wanted to give some more accurate numbers.
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Old 10-13-2008, 10:24 PM
 
Location: NW Las Vegas - Lone Mountain
15,757 posts, read 20,291,968 times
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Quote:
Originally Posted by Daddys///M3 View Post
With all due respect Jim, I think that your mortgage numbers are a bit off. Of course I don't know what rate you are basing those numbers on. What I am coming up with is a rate in the mid 7's on a 30 year fixed with 20% down on a non-owner occupied property and a credit score of 720+ (of course other factors will apply). This is, of course, without any buydown points. Based on a purchase price of $150,000 and a loan amount of $120,000, the principal and interest payment would be more like $840 a month. At 75% loan to value which would be a loan amount of $112,500, the rate gets much closer to 7% even, perhaps 7.125% with no discount points, and the P&I payment would be at 7.125% would be about $758 a month. These figures are based on a 12 day lock. Just wanted to give some more accurate numbers.
I was using 6.5% with one point. I was not really thinking about it though so you are probably right.

I would also however point out that I strongly expect softening at least 1/2 a point...maybe a whole point. The boys are gonna try to dig the RE market out and I think low interest will be part of that. May not flow directly to investors though. So who knows.

Still points out the benefit of $85 PSF.
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Old 10-13-2008, 10:50 PM
 
Location: Las Vegas, Centennial Hills
2,013 posts, read 4,515,645 times
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Quote:
Originally Posted by olecapt View Post
I was using 6.5% with one point. I was not really thinking about it though so you are probably right.

I would also however point out that I strongly expect softening at least 1/2 a point...maybe a whole point. The boys are gonna try to dig the RE market out and I think low interest will be part of that. May not flow directly to investors though. So who knows.

Still points out the benefit of $85 PSF.
I don't disagree but the bond market is it's own animal unfortunately, as the last week has shown us with rates jumping by nearly a point (or pricing on rates as it where) even though the stock market "crash" should have seen money en masse flow to said bond markets. I do expect some softening though with the news of unlimited liquidity coming from the G7 meeting (we will just have to deal with the ramifications down the road I suppose).

I also agree that even at 7.5%, $85 a sq ft will cash flow and is a good benchmark (nevermind the obvious tax benefits of depreciation, interest, property tax, etc.).
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Old 10-14-2008, 03:00 AM
 
77 posts, read 115,571 times
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For those of us who do not live in LV, is it difficult to find a reliable rental manager to manage our investment property (screening potential tenants, collecting rent, fixing property problems, etc.)? And what is the going rate for a rental manager?

In california where I have a rental property (I live overseas), I pay $450 one time fee to the rental manager for finding a tenant plus 8% of monthly rent for him to manager my property. Cost for property maintenance is extra.

I have been thinking about investing in LV real estate. A main reason why I have not made the move is that I do not know where to look for a reliable rental manager in LV. It was much easier for me in california since I used to live there, but I do not know anyone in LV. A good rental manager will be critical in my case since I now live overseas permanently.

Does anyone have some suggestions about where or how to find a reliable rental manager in LV?
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Old 10-14-2008, 05:08 AM
 
Location: South Strip, NV --> Philly (Fall 2009)
2,404 posts, read 7,361,411 times
Reputation: 578
maybe you should just go with a management company...
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