Irvine Housing Blog

The 5-series probably required more in raw materials and skilled labor…

Yes. “We don’t need to see Irvine decline identification. These aren’t the articles IHO is looking for. Move along.”

“These stories are actually more engaging than Irvine HELOC abuse ones… you should really consider starting an LVHB.”

I feel the same way when I am writing these stories. Real anecdotes are compelling.

I have been trying to keep the blog focused on Irvine, so I have resisted writing about Las Vegas during the week. I will start writing more about these properties and my experiences there during the week. Perhaps one day a week other than Saturday.

I am glad you enjoyed the post.

BTW, Asians are the fastest growing group of newcomers to Las Vegas. One of my biggest competitors at the auction site is Chinese.

vegas isn’t deeply impacted from the people who would go to local indian casino to gamble.

Their main clientele is the convention business (#1 in hotel rooms in country), whale gamblers and party revelers. I supposed Asian whales are in danger of going to local Macau or Singapore.

Since ‘99, non-gaming revenue has surpassed gaming revenue. It is becoming a foodie capital in its own right.

LV competitive advantage is that no other city is going to be able to easily challenge their dominance as a convention destination in terms of pure logistics nor their brand as a place go to for bachelor parties, boys/girls trip or other “fun weekenders”.

When the economy returns, LV will return.

I don’t know conclusively if the house is empty or not when I buy it, but I can make an educated guess.

Often times an occupied property will have evidence of occupation, a car is in the driveway, children’s toys are in the back yard, furniture and personal possessions are visible through windows.

Sometimes the properties are on the MLS as short sales, so there are recent interior pictures. Any short sale with people’s stuff in the pictures is likely still occupied.

The drivers who photograph the properties try to look in windows to determine occupancy, and they also examine the electric meter. If the property is not occupied, the meter will not move as there are no appliances inside using electricity and the power is usually turned off.

It’s not a foolproof method. One of the properties I bought on March 2 looked occupied. I got a better discount at auction because my competitors also thought it was occupied. Apparently, the occupants had just moved out and left trash in the front. I got lucky on that one.

Unemployment in Las Vegas is very high, but more than 80% of the workers are still working their same jobs making the same money they were when prices were 60% higher. I have sold one to a local investor, but the rest have been sold to local owner occupants.

If he rents out the properties, all the capitol will be tied up and the fund will no longer be able to operate as advertised.

Also, how will he pay out the investors at the end of the term?

i suspect that he has to flip quickly to earn the kind of rates of return he needs.

He isn’t setup as a buy and hold REIT in the traditional sense. I’m sure he is setup more like a hedge fund where he makes his money something like a 2/20 type structure. (I have no idea what his compensation structure actually looks like but I’m sure he isn’t doing all this work to earn a 5% management fee on rental income.)

He could rent it out very quickly for short periods of time but if his objective is to turn these in a week, no point in renting it out and certainly can’t rent out occupied crack houses.

“Why not rent out those properties that you will lose money on?  Or is the business model set up to not hold on to any of these properties?

What is the rent like for these and how easy is it find a renter?”

Walter’s observation is correct: if I tie up capital in a rental, I will only make 8% to 10% a year. If I flip and make 8% to 10% per property, and turn it over 3 or 4 times a year, my rate of return is much higher. My investors signed up for the higher returns of flipping rather than the more stable returns of rental income.

It is better to take a loss and free the money up to profit on the next deal. Even if I have a 10% loser, I can make it up in three or four months if I pick a 10% winner.

Finding renters is not difficult. Any property can be rented if you discount the rent. So far, that hasn’t been necessary as rents are holding firm. As the economy picks up, rents should go up with it.

My guess is HELOC money became a substantial portion of the local economy starting in 2004. Price in Las Vegas went up nearly 50% in an 18 month period. You have to imagine there was a great deal of mortgage equity withdrawal and some serious partying during 2004-2006.

It certainly takes longer than it used to.

I usually devote anywhere between 1.5 and 2.5 hours per post. Sometimes, if I am inspired I will go longer. The post today took about 3.5 hours to complete.

Basically, I don’t watch TV, and I write instead. I would do very poorly on a Trivial Pursuit TV edition.

I’m always amazed at IRs lack of understanding of Detroit.

Detroit has all the problems you point out, but it still has significant auto industry jobs.  These jobs include extremely high paying jobs at GM headquarters and many higher education engineering jobs at GM and ford.  These are high end jobs that will continue to be in Detroit and really do not exist in Vegas.  The premium areas of Detroit have held up very well, where the GM executives and engineers live.  Other areas are worthless.

Las Vegas is mostly lower education type jobs and hourly workers who make far less than the hourly auto workers whom still exist in Detroit.

If we did not have private middle men, we would have government middle men (cuba, etc where all the rich people are government employees). Thats way WORSE IMO.

You are free to bid at auctions just like everyone is in this country. Its equal opportunity! Its called capitalism, the public schools vilify it, but thats what we are supposed to be. Dont have cash? Get some investors like IR is! get off the couch!

IR is not even using government funds to flip!!!  The retail buyers he is flipping to are no doubt using FHA/Fannie/Fraudie loans.  So THOSE BUYERS are the problem (or rather the taxpayers are clueless retards willing to perpetually fund mortgages for dopes with no cash, thus enriching hard working middlemen).

Go Irvine Renter! I wish you the best! Some of those buyers of your homes might not end up in foreclosure!(glass is half full, right? half of them WILL foreclose when they get a job transfer,divorce, et then you can flip same house AGAIN to next 3.5% down payment buyer! yay capitalism! go go go!)