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Old 04-17-2012, 11:36 AM
 
Location: Sputnik Planitia
7,832 posts, read 11,871,403 times
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Looking for an investment opportunity in the Las Vegas real estate market and had a few questions, hopefully I can get some good opinions

I have never before invested in real estate or even bought a home or had a mortgage so this will be my first foray into the whole thing. I currently live in Los Angeles area so will not be living local to Las Vegas.

I wanted to buy a condo all cash - perhaps 2 1 bedrooms (around $40k each) or 1 2 bedroom for around $50-60k or perhaps 1 2bd and 1 1bd for a total of $90k - with the current state of the market is it possible to get a positive cash flow after all expenses are taken into account? How is the rental market like in Vegas right now? Is it possible to have a management co. find renters and take care of day to day management?

Finally, what are the tax implications of having a rental property? Is rental income supposed to be declared to the IRS? I know a few people who had investment properties in Vegas and none of them ever declared their rent to the IRS so i'm fairly sure nobody cares.

Initially was thinking of buying a property for personal use here in Southern California but I FIRMLY believe SoCal is still in a HUGE bubble that is going to crash again since prices are still sky high so I am NOT going to touch this market with a 10 foot pole.
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Old 04-17-2012, 11:40 AM
 
Location: ( ͡° ͜ʖ ͡°) (╯°□°)╯︵ ┻━┻ ̡
7,112 posts, read 13,227,372 times
Reputation: 3900
Quote:
Originally Posted by k374 View Post
Looking for an investment opportunity in the Las Vegas real estate market and had a few questions, hopefully I can get some good opinions

I have never before invested in real estate or even bought a home or had a mortgage so this will be my first foray into the whole thing. I currently live in Los Angeles area so will not be living local to Las Vegas.

I wanted to buy a condo all cash - perhaps 2 1 bedrooms (around $40k each) or 1 2 bedroom for around $50-60k - with the current state of the market is it possible to get a positive cash flow after all expenses are taken into account? How is the rental market like in Vegas right now? Is it possible to have a management co. find renters and take care of day to day management?

Finally, what are the tax implications of having a rental property? Is rental income supposed to be declared to the IRS? I know a few people who had investment properties in Vegas and none of them ever declared their rent to the IRS so i'm fairly sure nobody cares.
YES!!!!!

But only if you are a hands on "investor" that lives in Vegas to personally watch over your "investment". If you live out of town you will have to hire a property manager to take care of the property which will eat up any positive cash flow.
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Old 04-17-2012, 11:58 AM
 
Location: Undisclosed location in the American desert Southwest
188 posts, read 485,458 times
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I would wait 3-6 months. The market for low priced houses/condos is very slim as the new foreclosure mediation law has reduced NTS's by about 90-95%, wait for these to normalize. It went from around 50000 NTS per month in Nevada prior to October to averaging around 300/month now. A ridiculous law that will only prolong the pain in Nevada. I would like to buy a home now while rates are low but there is very little inventory out there, especially less than $200k and even less quality inventory. The state legislature really screwed up on this one.
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Old 04-17-2012, 12:41 PM
 
Location: Austin, Tx.
18 posts, read 56,434 times
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Quote:
Originally Posted by nevadaned View Post
I would wait 3-6 months. The market for low priced houses/condos is very slim as the new foreclosure mediation law has reduced NTS's by about 90-95%, wait for these to normalize. It went from around 50000 NTS per month in Nevada prior to October to averaging around 300/month now. A ridiculous law that will only prolong the pain in Nevada. I would like to buy a home now while rates are low but there is very little inventory out there, especially less than $200k and even less quality inventory. The state legislature really screwed up on this one.
So are you saying you think the NTS's will increase again?

Thanks.
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Old 04-17-2012, 01:37 PM
 
2,076 posts, read 4,100,558 times
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They have to eventually increase again, unless fannie/freddie agree to widespread loan mods or demand picks up considerably. If that will happen in 3-6 months is anyone's guess.

I believe the overall best entry point for rental properties in terms of availability and ROI has passed and I believe we probably won't return to that level, but I think it will get better than it is right now.
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Old 04-17-2012, 04:12 PM
 
Location: Undisclosed location in the American desert Southwest
188 posts, read 485,458 times
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I politely disagree Jeff. I believe we are still bottoming, banks are learning how to expedite the 'mediation' process and these NTS's have already started to increase, albeit slowly. I think it will start to be noticeable in 3-6 months and after that the amount of inventory should pick up to what it was prior. I am referring to BofA, WFC, JPM/Chase, and Citi not fannie or freddie. If rates start creeping up anymore things certainly won't get any better. Too bad Nevada messed this up. Arizona and Florida are going through their inventory very quickly and will see a bottom much sooner than we will because of it. Nevada messed up and the timing couldn't have been worse for us real citizens who would like to buy a foreclosure and lock in a 30 year rate.
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Old 04-17-2012, 07:44 PM
 
2,723 posts, read 4,789,551 times
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Prior to Oct about half of the notices of default were cleared up, that will be impossible now as people stopped paying over 6 months(or more) ago. That fact alone doubles the number. Then you have the banks struggling to secure (invent) a notarized affidavit of authority which will consume even more time and energy. Also, the homeowners now have the ability to review recorded documents and halt or at the very least slow the process by questioning the authority.
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Old 04-17-2012, 09:36 PM
 
2,076 posts, read 4,100,558 times
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You could be right, but I don't see the market relapsing into a downward spiral again. The banks have little to no pressure to unload properties, as we have seen. If prices start to increase, that will just give them more incentive to hold back and release inventory in a trickle. At the same time, demand is increasing and as new buyers find they can't easily find a home, there will be more hype and more aggression to offer higher. This could create it's own mini-bubble, not saying it will, but it could. Also you have all the strategic defaulters starting to re-enter the market since their credit will soon be able to get a mortgage again, creating additional demand.

Also, BofA, WFC, JPM, Citi, etc. are mostly servicing Fannie/Freddie loans backed loans, so whatever Fannie/Freddie decides to do, BofA, WFC, etc. are merely following their instructions. Only a small percentage of loans they service are their own portfolio loans.

I agree they need to get the foreclosure pipeline running again, it's not good to have all these outside forces acting on the market. Creates lots of unintended consequences.

Personally I hope it does return to a downward spiral so I can pickup another property, but I don't expect that to happen.

Quote:
Originally Posted by nevadaned View Post
I politely disagree Jeff. I believe we are still bottoming, banks are learning how to expedite the 'mediation' process and these NTS's have already started to increase, albeit slowly. I think it will start to be noticeable in 3-6 months and after that the amount of inventory should pick up to what it was prior. I am referring to BofA, WFC, JPM/Chase, and Citi not fannie or freddie. If rates start creeping up anymore things certainly won't get any better. Too bad Nevada messed this up. Arizona and Florida are going through their inventory very quickly and will see a bottom much sooner than we will because of it. Nevada messed up and the timing couldn't have been worse for us real citizens who would like to buy a foreclosure and lock in a 30 year rate.
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Old 04-18-2012, 02:52 AM
 
2,723 posts, read 4,789,551 times
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Quote:
Originally Posted by WestieJeff View Post
Also you have all the strategic defaulters starting to re-enter the market since their credit will soon be able to get a mortgage again, creating additional demand.
Highly doubtful considering real wages are declining and credit oh-so-tight.

(this according to a knowledgeable local mortgage broker)
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Old 04-18-2012, 10:29 AM
 
2,076 posts, read 4,100,558 times
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My view is given prices and interest rates right now, if you can afford rent, you can probably afford to buy if you can scrape together a down payment.

Everyone I personally know who has had issues getting a loan is related to appraisal, not credit. If you were subprime before, yeah, you're not getting a loan.

Quote:
Originally Posted by eventusstultorummagister View Post
Highly doubtful considering real wages are declining and credit oh-so-tight.

(this according to a knowledgeable local mortgage broker)
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