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You need 6 more percent plus if you count the costs of realtors plus concessions. So ten years out current buyers will be ahead? Maybe.
Put another way folks, I believe that Olecapt has inadvertently advised that you not buy a house in Las Vegas unless you intend on living there at LEAST ten years. Anyone hoping for undeserved financial gain....think again. Place to live, not an investment.
No Five or six. The first few years after the REOs end will restore to replacement value. That is an up of more than 20%. I figure about 9% increase for an owner to get even.
Actually you also have to do the home buy versus rent calculation. That will begin to show a net return in only a couple of years. You can't sell it yet but you can go on with a positive return by renting it out.
I would not suggest one buy here unless you will be in the house more than 5 years or can use it as a rental if you move before then. You might squeeze out in 4 or so if you count your gain by owning and not renting.
King Futs, LLC (and various other LLC's with the same name) is owned by Kirk Montez...who has a law office on West Sahara.
Like so many others, is a house flipper...
You are WRONG (again, I might add but at least you're consistent!)
Kirk Montez is the attorney for the LLC
The person(s) behind "King Futts" (BTW, they have several LLC's) has totally hidden their identity which makes one wonder... WHY?
And Cappy is right, they're NOT flippers and appear to have access to an endless supply of cash. Look at the aggregate value of their Turnberry purchases. Only a few people I know of with that kind of cash.
You need 6 more percent plus if you count the costs of realtors plus concessions. So ten years out current buyers will be ahead? Maybe.
Put another way folks, I believe that Olecapt has inadvertently advised that you not buy a house in Las Vegas unless you intend on living there at LEAST ten years. Anyone hoping for undeserved financial gain....think again. Place to live, not an investment.
Will there be enough water to support life in Vegas in 10 years?
As I continue to note, lower priced homes have stabilized and have seen some decent appreciation in the last 2 years or so for those who purchased correctly at the right prices. Cash has been king and will continue to be so. Just the way it is for these positive income returning properties. With that said, anyone who really believes they will see a profit on any middle or upper priced property in Vegas, purchased with financed monies, is just delusional. I continue to note regardless of the nonsense being spewed about a recovery in America we will NOT see that until the average American is working along with NOT spending larger parts of their income on staples such as Petroleum based products and food. Smart monies are NOT purchasing expensive homes as can be seen by entities like Futts. Rather they are looking for Value driven rental properties which will produce a positive cash flow. Regardless of who they are or what they are Futts is making some very smart choices. Again, sorry folks, just the way it is. Anyone in this economy who is not fully stable financially should be looking to reduce their expenses NOT increase them with the purchase of a devaluing asset like middle and upper range Vegas real estate. Sure some folks want to live and raise their families in L.V. but those folks are not in the majority any more. I know this is Vegas but why would anyone risk their life fortune on still expensive real estate.
5 years to make a profit, 10 years on anything other than positive cash flow properties?? I doubt it UNLESS you buy right and below the market values established by those who must finance their properties. Do you really believe the Futts out there are buying at the same Market prices as those financing.... Paaa leeeese. I have noted for years I am an individual investor who NEVER pays those market prices and is continuing to kick some serious real estate butt. I am by no means a doom sayer rather I am noting there is unprecedented monies being made in real estate by those who are informed and financially viable.
History lessons are not going to make this economy or the real estate market for those who do not understand today's conditions and cannot afford to play the cash game any better. Heck forget history and look at the present. Anyone look at todays employment and hiring figures?? Once again the experts had to lower their estimates from previous months in response to the realities of the present. How about net income levels as they relate to a families ability to pay for utilities, maintenance, home owners insurance along with the mortgage. How about the concept of lesser savings from deductions of mortgage interest as an individuals income goes down.
I revert back to what I have been saying on this board and other boards for many years now. Forget the experts and their silly predictions. Use your head. Read and learn about real estate. Once you have the tools there is a ton of monies to be made in this lousy economy through the purchase and sales of real estate. Just make sure you understand the nature of value and do not rely on the so called experts for advice. You do not need to look much past this site to see the damage caused by so called experts.
Most everyone thought it was a great idea to buy homes when prices were at record highs, now the same people think its a terrible idea to buy when prices are near decade lows. Interesting.
FOD, the folks buying the expensive homes are buying them to live in them, not to flip them or with the expectation of getting a HELOC. That said, buying an expensive house for 2/3 of replacement cost seems to be a good business decision since one is getting the land for free. The baby boomers with money are going to be retiring regardless of the Great Bush Recession and one of their top retirement destinations is going to be Las Vegas. Eventually, supply and demand will swing back to the other side.
This article address's the increase volume of home sales in and around Las Vegas for the month of June, however prices are still being kept down on lower priced properties some even going lower. Keep in mind when they are talking about condo prices those are not highrise condo prices.
I wonder what the percent of investors are foreigners?
You were wondering who is making all the offers on properties causing multiple offers it's cash buyers for the most part only 3% of them are foreign buyers.
Take note that they are buying the low end properties from $120,000 or less so if you thinking of purchasing in that price range be prepared for multiple offers.
And these are cash offers so if you need to have a loan to purchase you could be out bid even if the cash offer is less due to sellers preferring a quick close and no appraisals. I don't tell you this to discourage you but to help you be and informed buyer. Also when they mention prices of condo's that doesn't mean highrise condo's.
FOD, the folks buying the expensive homes are buying them to live in them, not to flip them or with the expectation of getting a HELOC. That said, buying an expensive house for 2/3 of replacement cost seems to be a good business decision since one is getting the land for free. The baby boomers with money are going to be retiring regardless of the Great Bush Recession and one of their top retirement destinations is going to be Las Vegas. Eventually, supply and demand will swing back to the other side.
Yo BV,
In today's real estate world replacement cost is a meaningless number. Free land?? Heck there is tons of it around the country and few if anyone are buying it. There are big properties around the Nation selling for 25 cents on the replacement cost. Want a mansion go to Detroit. You can have one for a few thousand dollars. How about the Las Vegas Strip Condo Market?? You can still buy these Waaaay under replacement cost. In my world this in no way makes them a good investment.
Real Estate values between 1995 and 2006 were driven by perception and expectation. Just like the stock market it was not value driven rather it was primed by a pyramid scheme where everyone and their sister wanted to get in and make some cash. 2006 thru 2009 we watched and listened to experts tell us the Real Estate Market and the economy was in a temporary decline. Don't worry be happy. 2009 thru 2010 Reality is beginning to set in but Don't worry the bottom has arrived....Yeah Right. However the smart money is realizing rentals are the new housing purchase as we are seeing double digit returns on our investments as rental prices Vs Cost of owning the rental increases. Pay attention to this board as the discussion of Futts is exactly what I have been talking about.
Value driven purchases held, by choice, to yield great returns for their investors. I am not familiar with Futts but you may see they will make incredible returns should they begin to refinance their real estate purchases at the appropriate times, where each of the investors no longer has skin in the game as they pull back out their investment capitol and watch as the rentals still provide a positive cash flow with no out of pocket cash by the investors. In essence an infinite return on investment. This model has been the same one used in every down real estate market for generations.
2010-2011 now every one is a knowledgeable investor... Aren't they??? NO. The vast majority still have no idea what value is. I am still hearing great numbers of folks from out of state looking to get into the Vegas R.E. market going so far as to hire and agent and purchase the properties sight unseen. BAAAAD idea. As time goes on the number of these foolhardy buyers will decrease as reality hits them right in the jaw. Additionally, buyers, including those in the mid and high end markets are getting much more savvy and are willing to offer very, very low prices. These prices have nothing to do with replacement cost rather many of these folks are just looking to get into a big home cheap. These folks are realizing they are in the minority and thus we have a very real buyers market. Just as importantly we have financially strapped sellers, many times lender owned or short situations, who are also being driven hard to sell again driving down prices.
As far as those who very much wish to live in Vegas that is great and a wonderful idea however for the retiring Baby Boomers do not be fooled.
Many of these folks got the fear of Gawwd placed in them when their retirement portfolios of Stocks and Real Estate suddenly were worth half or less of what they expected. Though Stocks have rebounded a portion the fear is heavily instilled. If you ever met a person who went through the great depression that experience never went away for those who lost everything. Just remember, even in the great depression huge monies were made by those who understood value.
For those who stayed in cash with expected returns of 5 - 8 % interest well the reality is they are not making it on the .1 - .5% returns being realized today. These folks have obtained a very costly lesson in value and investing. The good news for these folks is they are cash rich but revenue poor and thus the influx into value driven purchases of rentals. I do believe these folks are not looking to buy higher end homes (Yes, some will but very few) without getting severe discounts. Those with cash will parlay their position into purchasing what once was a 2 or 3 million dollar Vegas home and purchase it for 600 - 800 thousand dollars or less. Sounds great and no problem for those who can afford it but to do so with any sort of expectation of a profit is just ludicrous. These Baby Boomers are getting smarter and the new generation does not have the income nor the ability to qualify for large loans to drive the prices of middle and higher end homes up.
Big and small businesses can hire employees for less monies again creating a lower income situation for the working man or woman.
Even two income families are not going to see an increase in family income as high paying jobs are just not readily available.
We just lost America's last great American creation, The Space Shuttle program. Do not believe for a moment the domino effect from this will not be felt. Please do not forget America's Debt. Even if this whacky government, republicans and democrats, ever figures out how to balance our budget this still will not buy down the debt. The only way that can happen is to raise taxes not just on income but businesses, sales, life styles such as electricity and gas, cars, etc. There will have to be creative means of hidden taxes in regular purchases. All of this will create a lower net income for America's middle and upper classes where the majority of folks will hold on to their dollars just a bit tighter.
The American dream of owning the big home and raising your family is a myth and a dream buster. Debt is the devil in the woodshed but Value is the king. I still ask why would someone risk their families financial well being, saddled with a 30 year mortgage or worse an adjustable mortgage on at best a stable mid or upper price home which is more likely a depreciating asset, when there are very nice neighborhoods at much lower costs?? If your income is not super high then the value of your homeowners deductions goes way down.
Many times you can rent a beautiful place at far less than the risk and cost of owning your own home. Those who have followed this advice have saved small fortunes as they watched the homes they though they wanted see additional price deductions. Sure, the immediate gratification of purchasing the home is delayed but lets face it this need for I.G. has helped destroy a section of our society. Forget the impulse buy and stick with value. Value could mean renting for a period of time and calculating your value of not losing monies in the devaluation of a home as part of your value calculation. I have been suggesting this for those looking to buy Stay away from perception and stick with reality. This should be the lesson learned from the past 15 years.
I am giving the real examples and reasoning why mid and high end properties will wallow for a very long period of time. I look forward to a concrete reason why they will stabilize and then yield a potential for profit. In this case a history lesson will not do it as those who used history to purchased mid and high end homes over the last 5 -7 years have lost their fannies and will not be recovering. As a note, these same folks have been taken out of the home purchasing pool as they entered foreclosures or short sale proceedings. Getting a new home loan with that on your record makes things more than a bit tough to qualify.
FOD
Last edited by fishordie; 07-09-2011 at 10:20 AM..
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Inventory rose as well...
