Monday, November 10, 2008
LAS VEGAS MARKET
LAS VEGAS MARKET PLACE -
We had breakfast with Keith our contact from Las Vegas this morning. He provided a lot of very useful information about that market which we will now move forwards on and look more closely at the numbers.
The Las Vegas market is in quite a different place to the rest of the States for a number of reasons.
* The forclosure process is a lot less, in other states over 12 months, and now they are backloged with 2 years of foreclosures to deal with in some cases. Las Vegas the foreclosure process only takes 90 days.
* Las Vegas was the first market to be hit, so will be the first market to fully recover
* Las Vegas still has a growing job market, 750 families (I think) per month moving to Las Vegas to work
* There is inventory of 25,000 homes to be sold. There is 15,000 Realtors in Nevada, so if each Realtor only sold 1 home the oversupply would be gone immediately
* There is a shortage of land on which to build homes
* Las Vegas is an international market place
* Las Vegas has a better tax rates
* A lot of the foreclosures do not require any rehab
I will be working with Keith in the coming weeks to look at some specific examples and will share this information to you when it comes to hand.
My final thought - a tax deductibe trip to Vegas to look at ones rental property each year - not that sound like fun!
We had breakfast with Keith our contact from Las Vegas this morning. He provided a lot of very useful information about that market which we will now move forwards on and look more closely at the numbers.
The Las Vegas market is in quite a different place to the rest of the States for a number of reasons.
* The forclosure process is a lot less, in other states over 12 months, and now they are backloged with 2 years of foreclosures to deal with in some cases. Las Vegas the foreclosure process only takes 90 days.
* Las Vegas was the first market to be hit, so will be the first market to fully recover
* Las Vegas still has a growing job market, 750 families (I think) per month moving to Las Vegas to work
* There is inventory of 25,000 homes to be sold. There is 15,000 Realtors in Nevada, so if each Realtor only sold 1 home the oversupply would be gone immediately
* There is a shortage of land on which to build homes
* Las Vegas is an international market place
* Las Vegas has a better tax rates
* A lot of the foreclosures do not require any rehab
I will be working with Keith in the coming weeks to look at some specific examples and will share this information to you when it comes to hand.
My final thought - a tax deductibe trip to Vegas to look at ones rental property each year - not that sound like fun!
AMERICA TODAY - PART 2 - Additional comment`
A couple of addiontal points I forgot to cover
It is possible the Government will move tax rates.
One additonal sector in decline - Manufacturing.
It is possible the Government will move tax rates.
One additonal sector in decline - Manufacturing.
RESIDENTIAL MARKET
THE RESIDENTIAL MARKET is where the opportunites are right now -
I see these opportunities falling into two distinct categories -
* Those properties that are at give away pricing that need rehab and deliver good yield. Where between now and when the value comes into the property there is excellent cash flow.
* Properties that have pricing that is not in the "giveaway" bracket, but are strategically located, and whose pricing may bounce back quite quickly.
The first scenario is what we have been talking about to date, purchase for US$10k, rehab and rent. No US bank lending available.
The second scenario has a different price point, I am still concluding my research on the price range - but it would definitely be US$150,000 plus. One can borrow from a US bank on these properties. Whilst interest rates are currently around 6% remember what was reported about interest rates in my previous blog, There is a strong expectation that these will reduce substantially as the recsue package kicks in. With these properties one would be buying at a discount to valuation of 40 - 60%.
I will keep positing information as it comes to hand.
Residential Real Estate is definitely where the opportunity is right now - no question.
So it is a matter of moving forwards and firming up the opportunities. This is a process.
I see these opportunities falling into two distinct categories -
* Those properties that are at give away pricing that need rehab and deliver good yield. Where between now and when the value comes into the property there is excellent cash flow.
* Properties that have pricing that is not in the "giveaway" bracket, but are strategically located, and whose pricing may bounce back quite quickly.
The first scenario is what we have been talking about to date, purchase for US$10k, rehab and rent. No US bank lending available.
The second scenario has a different price point, I am still concluding my research on the price range - but it would definitely be US$150,000 plus. One can borrow from a US bank on these properties. Whilst interest rates are currently around 6% remember what was reported about interest rates in my previous blog, There is a strong expectation that these will reduce substantially as the recsue package kicks in. With these properties one would be buying at a discount to valuation of 40 - 60%.
I will keep positing information as it comes to hand.
Residential Real Estate is definitely where the opportunity is right now - no question.
So it is a matter of moving forwards and firming up the opportunities. This is a process.
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