Las Vegas Homes, Condos, Land and Commercial Real Estate Blog

Las Vegas real estate Investors are asking me to e-mail them listings for Las Vegas homes or condos for sale listings that would return the highest possible cash flow for their investment and I don’t have an answer, and am not afraid to admit it. This goes for my investors that think I have forgotten about them, I haven’t, I am working on it.

To me the best way to evaluate an investment opportunity is to figure out the income from the investment first, then evaluate the risk and then arrive at a price. Needless to say the higher the risk, the higher the reward, lottery tickets are good example.

So I have researched many of the condo communities in the Summerlin area which is located at West and North West Las Vegas to see how much the net income will be without taking account any expense other than tax and HOA fees, that is

RENTAL INCOME FROM A SUMMERLIN AREA CONDO-(HOA+TAX)= PRELIMINARY INCOME

I am not going to provide detailed information, those are proprietary and for my clients only, but I will discuss them in general terms.

HOA fees for these condo communities in Summerlin take a big chunk of the rental income. These HOA fees range from $290 in Red Hills at Pueblo that is located at Vegas Drive and Cielo Vista to $100 for Angel Point Condos. Monthly taxes run from $174 per month at Pacific Crest to $80 at Indian Wells condos.

The rent minus HOA fees and taxes in these Northwest Las Vegas condo communities can provide the investor with as much as $700 to as little as $350 per month.

Now be careful, as I haven’t discussed vacancy or expenses that are required to maintain the condominium. The good thing about investing in these Summerlin area condos is that all that you have to worry about is the inside of the condo and everything else is common area and is maintained by the Home Owner Association so these condos may be cheaper and easier to maintain. The reason that HOA fees are high for these condo communities are amenities. These condo communities come with multiple pools and spa, clubhouse, onsite HOA office, some have additional tennis or basketball courts and most are maintained in meticulous condition.

As to the vacancy rate, some of these condos rent in less than a week and some can take many weeks. One has to take into account that many condos are put on the rental market 30 days prior to the tenant vacating the condo unit.

The cheapest asking prices for these West Las Vegas Condos for sale are foreclosures and short sales however foreclosures provide the best buying opportunities since they don’t have several weeks wait time that are required to get a response from a short sale seller. So I have only picked the lowest priced foreclosures in each community and for each model.

These foreclosed (REO) condos are priced from $144,900 to $69,900, as you can see one is just about half of the price of the other, but the same ratio doesn’t exist in the rental price the rental income-(Tax+ HOA fees) are close, so in theory one condo returns a much better cash flow than the other.

As you can see, in order to give Las Vegas real estate investors who contact me the best cash flow for an investment I need to analyze different types of properties such as single family homes, condos, high rise condominiums or lofts in a homogeneous area such as Summerlin, figure out how much preliminary income each can generate and by that I mean rental income – (HOA fees and property tax).

Now once an investor knows how much preliminary income generates, he/she can look at the property, figure what, if any, costs are needed to bring it up to a good condition so it can be rented and how much does it take to maintain it. Then the investor can figure out how much he/she is willing to pay to earn that income.

Sunday a very nice and enthusiastic lady called and informed me that she is looking to invest in a Las Vegas home or condo and is looking to finance it by borrowing hard money first and then refinancing her property with a conventional loan. I told her don’t do it as hard money is expensive and the net income from her Las Vegas investment condo or home may not be enough to pay the origination fees that can run 4% plus and 8%-10% interest rates. I brought up one question also: If you can’t finance with a conventional loan now, what makes you think you can do it after buying the property? By the way look at what time I installed this blog, I am trying while my health is uncooperative.

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