[ScoopLV]

Originally Posted by jbov

That brings up another anomaly about this property... it has a "casita" which does not factor into the square footage (but must be at least 500 sq ft). Before renovations the property had two rental units attached to the main house (there is still a separate electric meter).

Those two units were renovated into the casita and a two car garage. So the flipper put considerable renovation money into a part of the house that won't even show up in the price per square foot. This seems to be a big part of the mistake they made.

The thing is the casita and garage are very appealing to me as a work studio so it does have value for me. But I understand that the value won't show up in the appraisal.

Just make sure all that extra square footage was properly permitted and executed. Otherwise, you're in for a lot of headaches.

[jbov]

Originally Posted by ScoopLV

Just make sure all that extra square footage was properly permitted and executed. Otherwise, you're in for a lot of headaches.

Sound advice. How can I find that info and what sort of problems would I have?

[ScoopLV]

Originally Posted by jbov

Sound advice. How can I find that info and what sort of problems would I have?

With luck, the seller can produce all the permits and inspector sign offs. If not, I'd immediately consider the property suspect. I would check whatever copies the seller gives you with the Planning and Development Dept. and Building and Safety Dept. Certificates of Occupancy should be available for all the units. If not, be very, very cautious.

Worst-case scenario? You have to demolish the casita and rental units and start from scratch. Best case scenario, you apply for and receive a variance. Then you're in the clear.

http://www.lasvegasnevada.gov/files/...rebrochure.pdf

[WestieJeff]

The value will show up in the appraisal, but not in the living sq footage.

I have a casita as well, so I saw how they treated it on the appraisal. They did have to find a comp with a casita, which was over six months old, five miles away, and not comparable in any other way. Ultimately they gave me $30/sf for the casita, which is the same as the main living area sq footage adjustment rate.

Same with the garage, they will bracket it against other homes with and without garages (in your area, if they are available) to determine its worth.

That said, it would be an unusual choice to dump money into a casita and garage. Flipper money is usually spent on items as cosmetic as possible (paint, flooring, countertops usually).

Originally Posted by jbov

That brings up another anomaly about this property... it has a "casita" which does not factor into the square footage (but must be at least 500 sq ft). Before renovations the property had two rental units attached to the main house (there is still a separate electric meter).

Those two units were renovated into the casita and a two car garage. So the flipper put considerable renovation money into a part of the house that won't even show up in the price per square foot. This seems to be a big part of the mistake they made.

The thing is the casita and garage are very appealing to me as a work studio so it does have value for me. But I understand that the value won't show up in the appraisal.

[lv122]

So it looks like you decided not to buy a condo. (Saw your post in my North vs South facing condo thread- ty for the info btw). I'm guessing you didn't run into any issues in the highrise life style? In any case, it looks like you're getting lots of good advice in this thread- good luck!

[jbov]

Originally Posted by ScoopLV

With luck, the seller can produce all the permits and inspector sign offs. If not, I'd immediately consider the property suspect. I would check whatever copies the seller gives you with the Planning and Development Dept. and Building and Safety Dept. Certificates of Occupancy should be available for all the units. If not, be very, very cautious.

Worst-case scenario? You have to demolish the casita and rental units and start from scratch. Best case scenario, you apply for and receive a variance. Then you're in the clear.

http://www.lasvegasnevada.gov/files/...rebrochure.pdf

My offer at $135k (66/sqft) was accepted! Both my agent and I expected at least one more counter offer, so I am pretty happy.

For clarification, there are no rental units anymore (those were converted into a the garage and casita). I spoke with the realtor and he said the garage and casita are officially listed as additional square footage. Also that portion of the house has its own electric meter so it must have been signed off by the city at some point. The inspection is on Thursday morning so I will know more then. But it looks to be an above board renovation.

Originally Posted by WestieJeff

The value will show up in the appraisal, but not in the living sq footage.

I have a casita as well, so I saw how they treated it on the appraisal. They did have to find a comp with a casita, which was over six months old, five miles away, and not comparable in any other way. Ultimately they gave me $30/sf for the casita, which is the same as the main living area sq footage adjustment rate.

Same with the garage, they will bracket it against other homes with and without garages (in your area, if they are available) to determine its worth.

That said, it would be an unusual choice to dump money into a casita and garage. Flipper money is usually spent on items as cosmetic as possible (paint, flooring, countertops usually).

Its good to hear that there are some contingencies for valuing the casita and garage space because I am a bit worried about the appraisal coming in low.

It certainly seems to me that the flipper made some serious mistakes. I have a friend in California involved in flipping distressed properties and he says they stay away from extra spaces like that (basements, converted garages, casitas, etc) because they are harder to squeeze value out of.

Originally Posted by lv122

So it looks like you decided not to buy a condo. (Saw your post in my North vs South facing condo thread- ty for the info btw). I'm guessing you didn't run into any issues in the highrise life style? In any case, it looks like you're getting lots of good advice in this thread- good luck!

I really enjoyed the highrise lifestyle. But in the end if I was going to buy I needed/wanted more space. And I am not a fan of HOAs in general. Also the type of work that I do (video production) is not very prevalent here in Las Vegas. If something happened and I lost my job in a couple of years and had to move back to LA, I would hope to rent the place out. The high HOA payments in the high rises make them a less appealing investment in those regards.

[yellowsnow]

Originally Posted by bayview6

Eventually, the Vegas housing market is going to swing back to being a sellers market (hard to believe, isn't it?) and then all those renovations will recoup some of their cost. Folks who buy at today's low prices can break-even on their renovations if they live in the house for 10 or 15 years since inflation will continue to push replacement value higher.

You are absolutely right. The pendulum always swings. It's just hard to know when it will swing.

I think the turning point will be when the shorts and repos are all gone. Then it will be another 5 years, at least, of an improving economy.

[yellowsnow]

I think you are fortunate to have gotten a casita. It was on my shopping list but no luck. The casita is great for a studio or living space for guests. I also like the older homes here and the casitas are a bonus.

[jbov]

Originally Posted by yellowsnow

I think you are fortunate to have gotten a casita. It was on my shopping list but no luck. The casita is great for a studio or living space for guests. I also like the older homes here and the casitas are a bonus.

Thanks, I agree the space is very useful. I plan to use it as an office and set up a green screen in the adjacent garage. It is a great space for a home based business because it is separated from the main house by the garage.

This was the only older home I found that had all 3 of the things on my wish list: a pool, casita, and garage. I will post some pics after the deal gets a little further along. I don't want to to jinx the deal by parading photos all over the internet I've already bragged about the property enough to friends and family...

[ScoopLV]

Originally Posted by jbov

For clarification, there are no rental units anymore (those were converted into a the garage and casita). I spoke with the realtor and he said the garage and casita are officially listed as additional square footage. Also that portion of the house has its own electric meter so it must have been signed off by the city at some point. The inspection is on Thursday morning so I will know more then. But it looks to be an above board renovation.

I don't believe in "must have been signed off" or "looks to be above board."

Too many people here have a brother in law or cousin "who's a great carpenter" perform a cheap hack-job improvement, either hoping they can sneak one by the city, or not knowing the possible consequences of putting a casita one foot away from the property line.

I'd double check everything. I hope all is correct with the property, no defects and it's all systems go. But I'm not a particularly trusting soul by nature.