Investing in Las Vegas
Las Vegas Real Estate – 9th Island of Opportunity
Okay, if I had to choose between other mainland cities or Las Vegas, I’d bet my stack of chips on Vegas. It really does feel like home, only hotter, colder, drier, and busier. My favorite airline goes there non-stop and since I have their VISA card, I use my Hawaiian Miles to upgrade to first class whenever I can – THAT is truly the way to fly!
In Vegas, the California Hotel is like a class reunion – more people I know and bump into there than at Ala Moana Center! There might be better real estate markets out there such as Indiana, Texas, Ohio, Florida, Memphis, etc., but Vegas [*! see update at bottom of page] is my favorite market to shop and buy. Yes, Paul and Co. (Realestate-Extreme), it is emotion not primarily the numbers dictating that strategy, but women are supposed to be emotional. And Uncle doesn’t mind.
I believe in picking the best strategy for our situation, and go for it. Believe me, there are different paths to take, different markets to seek, and more advice than I would like about not doing what we are doing. We aren’t going in blind and deaf – we do listen to advice and continue to learn. However, I believe one of the most important hallmarks of success is commitment. We are not letting other people’s beliefs stop us in our tracks or veer us from our chosen path, as long as our plan is working.
Our strategy is to buy the bargains in Vegas, rent and hold for a few years, then sell and buy closer to home using 1031 exchanges (or not) – in Hawaii, cash flowing all the while. This is banking on a few things – that we could rent for positive rental income in Vegas, prices in Vegas appreciate in a few years, and prices in Hawaii remain the same or come down a couple years out from now. We will also keep our options open. For now, we are getting decent rental income from the properties we do have in Vegas, and if that is how it remains, we will be fine.
Buying in Vegas is not a problem. It is on sale. Houses that were $400,000 or more a few years ago can be purchased for under $200,000 today. Formerly $240,000 4 bedroom 3 bath homes are now available for $80,000 to $100,000 in some areas – fee simple, 5 years old, central heating and air conditioning, nice looking, 2 car garage, with or without pool, etc.! Million dollar homes, gorgeous million dollar homes are $400,000! [note update: as of May 2013, prices in Vegas have risen – the market is heated up with a lot more cash buyer investors and less properties on the market. As a result of this, rental rates have gone down because there are now more investor owned rental units available.]
Homeowners association fees are rather low, property taxes are similar to Hawaii, and insurance is very low since they don’t have hurricanes there. If you run your rental business as a Nevada entity (see BOSS Business Services for info and support), open a business checking/savings account in Nevada (I use Wells Fargo), and use a Nevada property management company to manage your rentals, you can take advantage of Nevada’s business friendly laws. Use a Nevada LLC if you are conducting real estate business in Nevada. (Use a Hawaii LLC if you are conducting business in Hawaii. It is possible to file as an alien, but for me it is not worth the hassle.) I
currently used BOSS to file my corporate taxes in the past, and now use Diane Sandlin for our business and personal taxes that have flow throw LLCs. Diane is an excellent CPA and tax advisor knowledgeable in real estate investing and the reason we switched was because of the time difference communication lag that was occurring between Vegas and us here in Hawaii.
One of the advantages of investing in Vegas is that I am able to write off the expenses (air, hotel, car, food) to Vegas because I am doing business transactions in Vegas as long as I spend at least 4 hours in a day transacting business, i.e. looking at properties, meeting with our property manager, etc. Sweet!
If you have some time, please read a piece on commitment. Once we committed to building up our nest chicken, things started falling into place. After stumbling through a couple of counter productive Nevada real estate agents, we found the best real estate agent in the world (or at least in Vegas) for our strategy, Martin Fajardo. Young, energetic, honest, hard working, smart, and a great family man. Investment minded, pushy when necessary, attention to detail, and totally knowledgeable about Las Vegas, its market, and its pitfalls.
The first house I fell in love with was a 4bedroom/3bath house on the MLS on Bella Camrosa Drive. OMG, it had a drop dead gorgeous kitchen and an asking price of $191,900. We offered $175,000 and were rejected – twice. I was so sad. This was in August 2009. My first love and first rejection.
That was a year ago from the time I have begun this info site. Since then, we have acquired and rehabbed 7 properties in Vegas, and sold 1. Within 3 weeks or less from rehab completion, properties have been put under lease contract with qualified tenants. There is a rental market in Vegas – many of our tenants are former homeowners who lost their homes in foreclosure proceedings. Rent prices are a bit soft, but prices are so low, and it cash flows nicely. To me, it is an ideal time to be buying in this fast flashy city. There is even a seller’s market, just not as good as a buyer’s one.
Here’s a audio file from a very astute investor/trainer talking about Vegas investing. I don’t know how long this file will be available so please listen to it if you are even just thinking about investing. Thank you dear friend for sending this to me!
I couldn’t have done this without Martin. I wouldn’t have taken my first step without Rich Dad. I continue to learn from people like Paul, JT, Michael & Gavin and talking story with new found investor friends. Having Uncle in step and supporting this new venture of taking charge of our financial future makes it just fine and most important to success. The combination of all these blessings gives me great odds, far better than betting my favorite numbers of 6 and hard 8’s.
Speaking of 6’s and 8’s, here’s a page on my theory of craps and real estate. Thank you to my craps mentor, Chang, for putting up with all my questions and allowing me to tag along.
I just bought ANOTHER program, lol. But really, this one I had to get because I was dying of curiosity about the Las Vegas market. It is Ken Wade’s Housing Alert program. He is a graph/numbers/trend cruncher, and a master reader of the candlestick chart theory. He uses red dots for bad, yellow for neutral, and green for good, using almost the same kind of parameters as stock market indicators (MACDs, pricing, etc.) to determine an upward or downward move/trend in specific cities. Well, I can’t legally show you the picture, but currently as of March 2011, Las Vegas is moving from previous quarters of all red to the current quarter of 4 greens (2 each in the short and intermediate terms) and 2 reds (in the long term). The long term rating will be much slower to change because it is still accounting for that rapid downward slide in prices and stability over the last few years. It always lags the current and intermediate market because of the time frame it measures. Check out Aunty’s review of Ken Wades’s Housing Alert program.
What this means is that Aunty is happy. The bad stage is turning into a good stage. Buying is smart, and when the market’s indicators start to turn yellow, it will be time to sell.
Click < here > for a more detailed page on the steps involved in buying real estate in Vegas.