Where to buy in Las Vegas?

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<a href="http://online.wsj.com/article/SB124804383363363397.html">It seems that even the "nice" parts of Vegas are suffering from the total economic disaster that is happening there</a>.



<blockquote>The big bet that fueled Las Vegas's growth for so long is the same one that's now going bad: tourism. Vegas expanded into the lucrative market for business meetings and conventions, building massive exhibition halls and new hotels and casinos. Construction jobs multiplied and the housing market bubbled over. Now that tourism and business travel have collapsed, Vegas has little else to cushion the blow.



Even some long-time Vegas stalwarts now believe the era of astounding growth is over.



"I don't see any opportunities for any development in Las Vegas," said Las Vegas Sands chief executive Sheldon Adelson in an interview. Mr. Adelson, who in 1999 opened the Venetian, a Vegas-style replica of Venice complete with indoor canals, rattled off a list of U.S. states he has his eye on now: Massachusetts, Florida, Kentucky, Ohio, Texas.



All along the Las Vegas Strip, massive, half-finished edifices may never see a grand opening. Last month, the $3.5 billion Fontainebleau Las Vegas hotel and casino declared bankruptcy, and 3,500 construction workers lost their jobs. Other projects, such as the $5 billion Echelon resort, a hotel tower at Caesar's Palace and a luxury condo tower at the Palazzo, also halted construction.

<strong>

"There won't be another [casino] property built in Las Vegas for a decade,</strong>" says Jim Murren, chief executive of MGM Mirage, Nevada's largest employer.</blockquote>


<blockquote>Las Vegas has experienced ups and downs before. Business dropped off in the 1970s, during years of stagflation. And casinos were hurting for business in the months after Sept. 11, 2001. The city emerged from these downturns when Americans felt confident and wealthy enough to travel as the larger economy grew. But analysts and observers say now, unlike then, Vegas has billions in debt that will make a recovery much harder.



Harvey Perkins, a gambling consultant with Spectrum Gaming, believes the industry can no longer depend on regular Americans to behave like high rollers. "I think people have fundamentally changed in their spending patterns." The casino business model, he says, will have to be "re-engineered." Vegas, Mr. Perkins and others believe, will have to return to the days of being a bargain destination. That's already starting to happen, with hotels throwing in coupons for spa services, and high-end restaurants offering cheaper options.</blockquote>


Who do you sell houses to? People with jobs. Only one problem... the Vegas unemployment rate looks worse than the Great Depression...



http://s.wsj.net/public/resources/images/P1-AQ751_VEGASf_NS_20090719191337.gif
 
[quote author="graphrix" date=1248194358]<a href="http://online.wsj.com/article/SB124804383363363397.html">It seems that even the "nice" parts of Vegas are suffering from the total economic disaster that is happening there</a>.



<blockquote>The big bet that fueled Las Vegas's growth for so long is the same one that's now going bad: tourism. Vegas expanded into the lucrative market for business meetings and conventions, building massive exhibition halls and new hotels and casinos. Construction jobs multiplied and the housing market bubbled over. Now that tourism and business travel have collapsed, Vegas has little else to cushion the blow.



Even some long-time Vegas stalwarts now believe the era of astounding growth is over.



"I don't see any opportunities for any development in Las Vegas," said Las Vegas Sands chief executive Sheldon Adelson in an interview. Mr. Adelson, who in 1999 opened the Venetian, a Vegas-style replica of Venice complete with indoor canals, rattled off a list of U.S. states he has his eye on now: Massachusetts, Florida, Kentucky, Ohio, Texas.



All along the Las Vegas Strip, massive, half-finished edifices may never see a grand opening. Last month, the $3.5 billion Fontainebleau Las Vegas hotel and casino declared bankruptcy, and 3,500 construction workers lost their jobs. Other projects, such as the $5 billion Echelon resort, a hotel tower at Caesar's Palace and a luxury condo tower at the Palazzo, also halted construction.

<strong>

"There won't be another [casino] property built in Las Vegas for a decade,</strong>" says Jim Murren, chief executive of MGM Mirage, Nevada's largest employer.</blockquote>


<blockquote>Las Vegas has experienced ups and downs before. Business dropped off in the 1970s, during years of stagflation. And casinos were hurting for business in the months after Sept. 11, 2001. The city emerged from these downturns when Americans felt confident and wealthy enough to travel as the larger economy grew. But analysts and observers say now, unlike then, Vegas has billions in debt that will make a recovery much harder.



Harvey Perkins, a gambling consultant with Spectrum Gaming, believes the industry can no longer depend on regular Americans to behave like high rollers. "I think people have fundamentally changed in their spending patterns." The casino business model, he says, will have to be "re-engineered." Vegas, Mr. Perkins and others believe, will have to return to the days of being a bargain destination. That's already starting to happen, with hotels throwing in coupons for spa services, and high-end restaurants offering cheaper options.</blockquote>


Who do you sell houses to? People with jobs. Only one problem... the Vegas unemployment rate looks worse than the Great Depression...



http://s.wsj.net/public/resources/images/P1-AQ751_VEGASf_NS_20090719191337.gif</blockquote>
Easy, investors....at least those are the ones that are buying homes right now out there.
 
[quote author="usctrojanman29" date=1248210223]Easy, investors....at least those are the ones that are buying homes right now out there.</blockquote>


Really? Please provide statistical evidence to back this theory up. The one [strike]sucker[/strike] buyer you are working with as anecdotal evidence doesn't count. Since there were originally 735 scheduled for the auction in Clark County yesterday, I could only take the time to look through the first page of 200, and about 150 went back to the bank, about 6 sold, and the rest were canceled. Of the 6 that sold, they sold for $0.20 to $0.30 on the dollar of what was OWED, so you have to figure these few investors are really buying the homes for less than $0.10 on the dollar of what they were once "worth".



To play the numbers game, OC had 270 scheduled for the auction yesterday compared to 735, and OC has more than a million more in population and more than 200k housing units than Clark County. And you think the OC market is going to continue to go down. Clark County and Las Vegas are in a great depression on a micro econ perspective. The only smart people that are investing there are paying $0.10 on the dollar, flipping them to not smart investors and getting the hell out as quickly as possible. Because anyone who looks at the numbers knows that $0.10 on the dollar will be around for several years to come.
 
[quote author="graphrix" date=1248226926][quote author="usctrojanman29" date=1248210223]Easy, investors....at least those are the ones that are buying homes right now out there.</blockquote>


Really? Please provide statistical evidence to back this theory up. The one [strike]sucker[/strike] buyer you are working with as anecdotal evidence doesn't count. Since there were originally 735 scheduled for the auction in Clark County yesterday, I could only take the time to look through the first page of 200, and about 150 went back to the bank, about 6 sold, and the rest were canceled. Of the 6 that sold, they sold for $0.20 to $0.30 on the dollar of what was OWED, so you have to figure these few investors are really buying the homes for less than $0.10 on the dollar of what they were once "worth".



To play the numbers game, OC had 270 scheduled for the auction yesterday compared to 735, and OC has more than a million more in population and more than 200k housing units than Clark County. And you think the OC market is going to continue to go down. Clark County and Las Vegas are in a great depression on a micro econ perspective. The only smart people that are investing there are paying $0.10 on the dollar, flipping them to not smart investors and getting the hell out as quickly as possible. Because anyone who looks at the numbers knows that $0.10 on the dollar will be around for several years to come.</blockquote>
Don't shoot the messanger. Here you go...straight from GLVAR (Greater Las Vegas Association of Realtors). Total sales in June of 4,735 broke the previous bubble record for month sales of 4,628. You'll also see how sales are significantly higher for each month this year compared to last year. I'm just telling you what I see on my Vegas MLS. When I pull up sales records for the past few months I see a good share of buyers pay CASH and have out-of-state mailing addresses. I'm not saying that prices not going continue to head down, but at this point there are many properties in Vegas that are selling below rental parity which is probably causing the surge in sales (for now). I read an article this weekend (I didn't save it) that mentioned that investors are stepping in to both Vegas and Phoenix and picking up properties. This may be a dead cat bounce, but the fact is that sales are up a lot and inventory is down over 30% from the end of 2008 in Vegas. Honestly, I may be one of those real estate investors on the courthouse steps once my consulting contract ends and I can pick properties up for .10-.20 on the dollar to flip...don't have to plunk down the hundreds of thousands of dollars like here in the OC plus Nevada is a landlord friendly state (i.e. you can get rid of a tenant/occupant in a matter of a few weeks).
<fieldset class="gc-fieldset">
<legend> Attached files </legend> <a href="http://www.talkirvine.com/converted_files/images/forum_attachments/356_09qXmXoAq7du5t70XKyx.doc" target="_blank" class="gc-files">Vegas sales stats.doc</a> <span class="gc-filesize">(81 B)</span> </fieldset>
 
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?
 
[quote author="bugmenot" date=1248748542]<a href="http://www.housingbubblebust.com/OFHEO/Major/SouthWest.html">Vegas Trendline</a></blockquote>


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).
 
[quote author="irvine_home_owner" date=1248749468]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?</blockquote>
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.
 
[quote author="usctrojanman29" date=1248761223]

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.</blockquote>
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.
 
[quote author="irvine_home_owner" date=1248826555][quote author="usctrojanman29" date=1248761223]

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.</blockquote>
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.</blockquote>
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.
 
[quote author="usctrojanman29" date=1248828958]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.</blockquote>


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?
 
[quote author="Geotpf" date=1248841771][quote author="usctrojanman29" date=1248828958]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.</blockquote>


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?</blockquote>
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.
 
[quote author="no_vaseline" date=1249603231]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.</blockquote>


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?
 
[quote author="Geotpf" date=1249606497][quote author="no_vaseline" date=1249603231]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.</blockquote>


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?</blockquote>


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.
 
[quote author="usctrojanman29" date=1248865762][quote author="Geotpf" date=1248841771][quote author="usctrojanman29" date=1248828958]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.</blockquote>


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?</blockquote>
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.</blockquote>
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.
 
[quote author="gepetoh" date=1249076005]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!</blockquote>
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!
 
[quote author="Geotpf" date=1249606497][quote author="no_vaseline" date=1249603231]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.</blockquote>


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?</blockquote>
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.
 
[quote author="no_vaseline" date=1249607570][quote author="Geotpf" date=1249606497][quote author="no_vaseline" date=1249603231]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.</blockquote>


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?</blockquote>


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.</blockquote>
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.
 
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