bugmenot - 27 July 2009 07:35 PM

Vegas Trendline

That’s very interesting.  Look how big the crash was in Vegas, Reno, and Phoenix, compared to the almost complete lack of a crash in Albuquerque and Denver (they just went flat).

irvine_home_owner - 27 July 2009 07:51 PM

I was tempted to buy into one of those towers where they rent out your suite when you’re not there. It seemed like win-win since supposedly you would not be spending out of pocket each month as your share of the rent should pay for it and if you needed a place to stay in Vegas it would be cost-free.

Luckily we didn’t as it seems those places are always vacant and any income from guest stays would be zero.

USC: Do you have any info on these type of “timeshare” deals?

What you speak of are called “condotels” and they are one of the worst investing ideas ever for the investor.  The only that really makes out like a bandit is the hotel operator/property manager (one of the same).  Here’s how it works.  You buy one of these condotels and they go into the rental pool that the hotel operator/property manager uses.  The room gets rented out at whatever rate the hotel operator/property manager determines.  You split the room rental revenue 50-50 with the hotel operator/property manager.  On top of that you pay all of the property taxes, insurance, and an HOA monthly fee.  Basically the hotel operator gets the general public to finance the construction of the hotel instead of the hotel operator.  One of the current properties with these properties is that they are considered highly risky investment properties by lenders which means that as a buyer you’ll have to come up to a 40%+ downpayment to get the loan.  Sure everything is taken care of for you, but there is so much out of your control that the numbers still don’t pencil even with the current prices.

A better bet would be to pick up a SFR as a rental and have a property management manage it for you.  You can get a property rented out fairly quickly to a decent renter so long as your rent is at or slightly before rental comps.

usctrojanman29 - 27 July 2009 11:07 PM

A better bet would be to pick up a SFR as a rental and have a property management manage it for you.  You can get a property rented out fairly quickly to a decent renter so long as your rent is at or slightly before rental comps.

Yeah… but then we don’t have a place to stay on the odd weekends we go there. I’m sure the money you making on renting out an SFR in LV probably pays for a nice hotel for those mini-vacations (especially how cheap rooms are now) but the allure of owning something on the strip kind of hypnotizes you.

We knew there was problems with the model (which is why we never did it) but I was wondering if there was anyone who did and how has it been through this downturn.

irvine_home_owner - 28 July 2009 05:15 PM

usctrojanman29 - 27 July 2009 11:07 PM

A better bet would be to pick up a SFR as a rental and have a property management manage it for you.  You can get a property rented out fairly quickly to a decent renter so long as your rent is at or slightly before rental comps.

Yeah… but then we don’t have a place to stay on the odd weekends we go there. I’m sure the money you making on renting out an SFR in LV probably pays for a nice hotel for those mini-vacations (especially how cheap rooms are now) but the allure of owning something on the strip kind of hypnotizes you.

We knew there was problems with the model (which is why we never did it) but I was wondering if there was anyone who did and how has it been through this downturn.

True, depends on what you are looking for…an investment or a second home to potentially establish residency in a state that has no state income tax.  Owning something on the strip is a “sexy” idea but it’ll never pencil…kinda like owning something by the beach. 

Unfortunately, I know someone who drank the kool-aid…my cousin and her husband.  The bought a condotel unit over at the Trump Towers.  They had to plunk down 20% as their deposit but can’t close on the unit because no lender will finance them unless they put 40%+ down.  The Trump Towers sold out in a matter of a month but to-date only about 30% of the units closed.  They are caught between a rock and a hard place…either walk away from the 20% deposit ($120k+) or pony up another 20% and be cash flow negative each month and basically be down 30% from their contract price.  I’m upside down on my 4plex in Vegas but at least it is generating positive cash flow before the tax benefit.

usctrojanman29 - 28 July 2009 05:55 PM

Unfortunately, I know someone who drank the kool-aid…my cousin and her husband.  The bought a condotel unit over at the Trump Towers.  They had to plunk down 20% as their deposit but can’t close on the unit because no lender will finance them unless they put 40%+ down.  The Trump Towers sold out in a matter of a month but to-date only about 30% of the units closed.  They are caught between a rock and a hard place…either walk away from the 20% deposit ($120k+) or pony up another 20% and be cash flow negative each month and basically be down 30% from their contract price.  I’m upside down on my 4plex in Vegas but at least it is generating positive cash flow before the tax benefit.

Wow, that sucks.  Have they really been in this limbo for over a year (looks like Trump Hotel Las Vegas opened March 31st, 2008)?  There’s no recourse for them getting their deposit back?

Geotpf - 28 July 2009 09:29 PM

usctrojanman29 - 28 July 2009 05:55 PM

Unfortunately, I know someone who drank the kool-aid…my cousin and her husband.  The bought a condotel unit over at the Trump Towers.  They had to plunk down 20% as their deposit but can’t close on the unit because no lender will finance them unless they put 40%+ down.  The Trump Towers sold out in a matter of a month but to-date only about 30% of the units closed.  They are caught between a rock and a hard place…either walk away from the 20% deposit ($120k+) or pony up another 20% and be cash flow negative each month and basically be down 30% from their contract price.  I’m upside down on my 4plex in Vegas but at least it is generating positive cash flow before the tax benefit.

Wow, that sucks.  Have they really been in this limbo for over a year (looks like Trump Hotel Las Vegas opened March 31st, 2008)?  There’s no recourse for them getting their deposit back?

Yeah, I think they were scheduled to close in April or May of 2008 but couldn’t due to the issue of getting a loan.  There is a class action lawsuit concerning the refund of those deposits but I’m not sure if they are involved…kinda a touchy subject.

Fellow Trojan, I see that some condo units in Lake Las Vegas are teetering in the $100K range.  Records show they were on sale in the $400’s 18 months ago.  1500+ sf, luxury amenities, sounds pretty good at that price despite nearly $400/mo in HOA.  What’s your opinions on these?  I’ve been to Lake LV a few times and really like it there, so am thinking of possibly buying that for posterity.  My thinking is it won’t return much from the rental front, but at that price might be a decent investment that I could eventually retire into.  Any thoughts?  Fight On!

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

no_vaseline - 06 August 2009 05:00 PM

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

And he hasn’t stopped paying on the loan himself?  He’s overdrawn and still paying the mortgage on his silly Vegas place?  Or maybe he stopped paying months ago and the bank hasn’t gotten around to foreclosing.

In any case, $800 a month for a 2,400 sq ft golf course house is stupid cheap.  In Riverside(!!!), something like that would rent for more than twice that.  That can’t be right-rents in Vegas are less than half that of those in Riverside?  Really?

Geotpf - 06 August 2009 05:54 PM

no_vaseline - 06 August 2009 05:00 PM

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

And he hasn’t stopped paying on the loan himself?  He’s overdrawn and still paying the mortgage on his silly Vegas place?  Or maybe he stopped paying months ago and the bank hasn’t gotten around to foreclosing.

In any case, $800 a month for a 2,400 sq ft golf course house is stupid cheap.  In Riverside(!!!), something like that would rent for more than twice that.  That can’t be right-rents in Vegas are less than half that of those in Riverside?  Really?

He hasn’t stopped paying on it yet.  He said if he couldn’t get the tennant out and somebody else in in the next 60 days he was going to.

I trust him/ believe his story.  He’s a no b*s* kind of guy.  He owes me money and has never not paid me before this week.  I’m pretty good at smelling out trolls and people who are lying to me who owe me money.

usctrojanman29 - 29 July 2009 04:09 AM

Geotpf - 28 July 2009 09:29 PM

usctrojanman29 - 28 July 2009 05:55 PM

Unfortunately, I know someone who drank the kool-aid…my cousin and her husband.  The bought a condotel unit over at the Trump Towers.  They had to plunk down 20% as their deposit but can’t close on the unit because no lender will finance them unless they put 40%+ down.  The Trump Towers sold out in a matter of a month but to-date only about 30% of the units closed.  They are caught between a rock and a hard place…either walk away from the 20% deposit ($120k+) or pony up another 20% and be cash flow negative each month and basically be down 30% from their contract price.  I’m upside down on my 4plex in Vegas but at least it is generating positive cash flow before the tax benefit.

Wow, that sucks.  Have they really been in this limbo for over a year (looks like Trump Hotel Las Vegas opened March 31st, 2008)?  There’s no recourse for them getting their deposit back?

Yeah, I think they were scheduled to close in April or May of 2008 but couldn’t due to the issue of getting a loan.  There is a class action lawsuit concerning the refund of those deposits but I’m not sure if they are involved…kinda a touchy subject.

Having just been there recently… it’s interesting that Trump Tower is the cheapest of the 5-star hotels. They were charging $200 per night weekend rate.

gepetoh - 31 July 2009 02:33 PM

Fellow Trojan, I see that some condo units in Lake Las Vegas are teetering in the $100K range.  Records show they were on sale in the $400’s 18 months ago.  1500+ sf, luxury amenities, sounds pretty good at that price despite nearly $400/mo in HOA.  What’s your opinions on these?  I’ve been to Lake LV a few times and really like it there, so am thinking of possibly buying that for posterity.  My thinking is it won’t return much from the rental front, but at that price might be a decent investment that I could eventually retire into.  Any thoughts?  Fight On!

Not too familiar with the Lake Las Vegas sub-market but I can tell you from being there that it’s a very, very nice area.  Most of the properties over there are secondary/vacation homes.  It’s a very laidback kind of place where you don’t have to deal with the crowds around the Strip.  I think the area is a good one for folks looking to retire and live there for an extended period of time during the year, plus it’s within a 20-30 minute drive of being back at the Airport or at the Strip.  Let me know if you want to take a peek at some listings and/or closed comps both for sales and rental to see where things are at today.  FIGHT ON!

Geotpf - 06 August 2009 05:54 PM

no_vaseline - 06 August 2009 05:00 PM

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

And he hasn’t stopped paying on the loan himself?  He’s overdrawn and still paying the mortgage on his silly Vegas place?  Or maybe he stopped paying months ago and the bank hasn’t gotten around to foreclosing.

In any case, $800 a month for a 2,400 sq ft golf course house is stupid cheap.  In Riverside(!!!), something like that would rent for more than twice that.  That can’t be right-rents in Vegas are less than half that of those in Riverside?  Really?

Unless that’s in Pahrump or Mesquite, that property should be renting out for about $1,550-$1,800 per month ($.65 to $.75/sf).  If No_Vas PMs me the address, I can run rental MLS leased comps on the properties in that area to verify.

no_vaseline - 06 August 2009 06:12 PM

Geotpf - 06 August 2009 05:54 PM

no_vaseline - 06 August 2009 05:00 PM

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

And he hasn’t stopped paying on the loan himself?  He’s overdrawn and still paying the mortgage on his silly Vegas place?  Or maybe he stopped paying months ago and the bank hasn’t gotten around to foreclosing.

In any case, $800 a month for a 2,400 sq ft golf course house is stupid cheap.  In Riverside(!!!), something like that would rent for more than twice that.  That can’t be right-rents in Vegas are less than half that of those in Riverside?  Really?

He hasn’t stopped paying on it yet.  He said if he couldn’t get the tennant out and somebody else in in the next 60 days he was going to.

I trust him/ believe his story.  He’s a no b*s* kind of guy.  He owes me money and has never not paid me before this week.  I’m pretty good at smelling out trolls and people who are lying to me who owe me money.

I dunno, seems kinda weird because Nevada is a very landlord friendly state.  It takes all of about 2-3 weeks to kick out a tenant who isn’t paying their rent.  Although, you do have to be there in person having some going to court filling all the required court paperwork for you so have things move along quickly.

irvine_home_owner - 06 August 2009 07:29 PM

usctrojanman29 - 29 July 2009 04:09 AM

Geotpf - 28 July 2009 09:29 PM

usctrojanman29 - 28 July 2009 05:55 PM

Unfortunately, I know someone who drank the kool-aid…my cousin and her husband.  The bought a condotel unit over at the Trump Towers.  They had to plunk down 20% as their deposit but can’t close on the unit because no lender will finance them unless they put 40%+ down.  The Trump Towers sold out in a matter of a month but to-date only about 30% of the units closed.  They are caught between a rock and a hard place…either walk away from the 20% deposit ($120k+) or pony up another 20% and be cash flow negative each month and basically be down 30% from their contract price.  I’m upside down on my 4plex in Vegas but at least it is generating positive cash flow before the tax benefit.

Wow, that sucks.  Have they really been in this limbo for over a year (looks like Trump Hotel Las Vegas opened March 31st, 2008)?  There’s no recourse for them getting their deposit back?

Yeah, I think they were scheduled to close in April or May of 2008 but couldn’t due to the issue of getting a loan.  There is a class action lawsuit concerning the refund of those deposits but I’m not sure if they are involved…kinda a touchy subject.

Having just been there recently… it’s interesting that Trump Tower is the cheapest of the 5-star hotels. They were charging $200 per night weekend rate.

Yeah, it’s definitely a nice place and I’d probably stay there if my dad didnt own a home out in the suburbs out there (btw, he’s got a 3-car car garage…I’ll snap a picture for you of the home this weekend).  The problem that my counsin and her husband had was they believed the hype and didn’t crunch the numbers to analyze the investment.  He was trying to use an average rental rate of $300+/night along with occupancy of 95% (which were the peak figures during the bubble days).  Even at those lofty numbers, the investment would still be slightly cash flow negative.  When I pulled in some more realistic numbers like $150/night and 75% occupancy the numbers looked SUPER FUGLY and indicated that the property was 50%+ overpriced.  Well, my analysis fell on deaf ears.  I bought a 4plex out in Vegas which I’m underwater on but at least I’m cash flow positive before taxes (when you take in the tax benefit it puts me that much more ahead cash flow wise) which allows me to wait out the downturn.

usctrojanman29 - 06 August 2009 07:32 PM

gepetoh - 31 July 2009 02:33 PM

Fellow Trojan, I see that some condo units in Lake Las Vegas are teetering in the $100K range.  Records show they were on sale in the $400’s 18 months ago.  1500+ sf, luxury amenities, sounds pretty good at that price despite nearly $400/mo in HOA.  What’s your opinions on these?  I’ve been to Lake LV a few times and really like it there, so am thinking of possibly buying that for posterity.  My thinking is it won’t return much from the rental front, but at that price might be a decent investment that I could eventually retire into.  Any thoughts?  Fight On!

Not too familiar with the Lake Las Vegas sub-market but I can tell you from being there that it’s a very, very nice area.  Most of the properties over there are secondary/vacation homes.  It’s a very laidback kind of place where you don’t have to deal with the crowds around the Strip.  I think the area is a good one for folks looking to retire and live there for an extended period of time during the year, plus it’s within a 20-30 minute drive of being back at the Airport or at the Strip.  Let me know if you want to take a peek at some listings and/or closed comps both for sales and rental to see where things are at today.  FIGHT ON!

I am heading out to Vegas in September and my wife and I are now seriously considering.  I’ll take you up on the comps offer if you’d be so kind.  We would buy as our second home, but we’d have to buy as an investment property since it will be our 3rd property.  Thanks.  Fight On!  Can’t believe we’re only 3rd/4th in the rankings!

gepetoh - 19 August 2009 05:18 AM

usctrojanman29 - 06 August 2009 07:32 PM

gepetoh - 31 July 2009 02:33 PM

Fellow Trojan, I see that some condo units in Lake Las Vegas are teetering in the $100K range.  Records show they were on sale in the $400’s 18 months ago.  1500+ sf, luxury amenities, sounds pretty good at that price despite nearly $400/mo in HOA.  What’s your opinions on these?  I’ve been to Lake LV a few times and really like it there, so am thinking of possibly buying that for posterity.  My thinking is it won’t return much from the rental front, but at that price might be a decent investment that I could eventually retire into.  Any thoughts?  Fight On!

Not too familiar with the Lake Las Vegas sub-market but I can tell you from being there that it’s a very, very nice area.  Most of the properties over there are secondary/vacation homes.  It’s a very laidback kind of place where you don’t have to deal with the crowds around the Strip.  I think the area is a good one for folks looking to retire and live there for an extended period of time during the year, plus it’s within a 20-30 minute drive of being back at the Airport or at the Strip.  Let me know if you want to take a peek at some listings and/or closed comps both for sales and rental to see where things are at today.  FIGHT ON!

I am heading out to Vegas in September and my wife and I are now seriously considering.  I’ll take you up on the comps offer if you’d be so kind.  We would buy as our second home, but we’d have to buy as an investment property since it will be our 3rd property.  Thanks.  Fight On!  Can’t believe we’re only 3rd/4th in the rankings!

Shot me a PM with your e-mail address and first name along with your search parameters and I’ll send you both active listings and closed sale comps so you can get an idea of where the market is.  Let me know when you guys will be out there and if I can make it then I’ll have access to check out the active listings. 

Don’t get me started on the whole ranking…it’s BS.  Everyone is so in love with Timmy T at Florida and yeah he is a good QB and they have a great team but I think SC will pleasantly surprise some people this year.  I would argue that we are deep at the QB position and the defense will be strong this year as that’s where Pete’s strength is.  Can’t wait for the season to start…the OSU game will be insane!

usctrojanman29 - 19 August 2009 05:34 AM

Shot me a PM with your e-mail address and first name along with your search parameters and I’ll send you both active listings and closed sale comps so you can get an idea of where the market is.  Let me know when you guys will be out there and if I can make it then I’ll have access to check out the active listings. 

Don’t get me started on the whole ranking…it’s BS.  Everyone is so in love with Timmy T at Florida and yeah he is a good QB and they have a great team but I think SC will pleasantly surprise some people this year.  I would argue that we are deep at the QB position and the defense will be strong this year as that’s where Pete’s strength is.  Can’t wait for the season to start…the OSU game will be insane!

My email is gepetohong@yahoo.com.  Thanks for the help.  I will be there the week of 9/7 for the whole week, but will only be available part of the time. 

I think if Corp doesn’t work out they’ll throw Mustain in there.  I think Corp will be pretty effective given that practically their entire offense is back.  Since he’s a low mistake QB, if he can get the ball down the field only decently I think we’ll have an awesome offense.  He might be the perfect guy to keep our offense on the field and keep the inexperienced defense off it.  Coach knows what he’s doing.  Fight On!

no_vaseline - 06 August 2009 05:00 PM

A juicy story from one of my customers, who can’t pay me today becasue he’s overdrawn.

Apparently he has a home in Vegas he purchased in 1999/2000 as an “investment”.  It’s a SFR, on a golf course, maybe 2400 sf.  He’s renting it for $800.  Or, I should say, was.  The renter bounced last months check and this months check didn’t even show up.  It costs him $1500 a month.

If I had an “investment” that was costing me $700 a month, I would consider that a habit, as in an addiction.  Somebody call NA or GA or something.  Is there a “Negative Cash Flow Investor Anonomous” out there?  Jeez.

Not sure where he bought, but if he’s paying $1500/mo for a 2400 sf home he bought in 1999/2000, he’s paying too much.  He should probably be paying $1100-1200 total unless he bought in the NICER parts of the Lakes, Summerlin, or Seven Hills.  I bought a 2500sf in 2001 with 5% down and was paying $1350 including HOA & escrow.  He’s got a 2nd on that. 

Having said that, LV is a bad market for rental properties unless it’s an apartment complex.  They have so many multi-building complexes that it’s pretty tough to rent out individual residences.  Not impossible, but pretty tough.  Still, $800 for a 2400sf is too low.  A typical 2bd/2bt goes for $800-850 these days.

Anyone following the high rise condo market in LV?  Prices finally are starting to look “reasonable” but I bet another 10%-20% will come off current prices.

norcaljeff - 06 October 2009 03:45 AM

Anyone following the high rise condo market in LV?  Prices finally are starting to look “reasonable” but I bet another 10%-20% will come off current prices.

I’ve been taking a peak here and there at them and you are probably right.  The only bad part is that you still have to shell out around $500/mo for HOA fees.  You might want to wait even after we hit bottom for the HOA mess to settle out.

Are you looking on or off strip?  Is $500/mo pretty much the ave for HOAs there?  In SD prices for condos are 3-7x and these Vegas condos are actually gorgeous inside instead of the plane Jane stuff in SD.

Did you guys see the Las Vegas RE story.  Priceless.

http://www.cnbc.com/id/33310096

those who are interested in vegas condos, if it’s for a 2nd home, i’m just curious how often/long you’d expect to be there?  i ask because 5-star accomodations there are relatively dirt cheap.  even if condos were free, you could easily spend every other wkend at the wynn for less than the cost of maintaining the property.

acpme - 14 October 2009 11:00 PM

those who are interested in vegas condos, if it’s for a 2nd home, i’m just curious how often/long you’d expect to be there?  i ask because 5-star accomodations there are relatively dirt cheap.  even if condos were free, you could easily spend every other wkend at the wynn for less than the cost of maintaining the property.

Many expect to “live” there 6 months + 1 day out of the year.