This is just a revelation of a recent event that took place here in Las Vegas, NV.
A fairly new client is searching for a particular property. He's young yet has some experience. He has a particular Acquisition Criteria that to me makes sense.
He is searching for this property type in the $10 to $30 Million range; must NOT be older than 1990; and must be fairly well taken care of (preventive maintenance wise).
Okay, not too many properties fit this; but i am willing to "search" for that type of property given the anticipated fee I would receive upon the close of a sale.
Anyway, with that said, I found a property that fit.
The current owner had acquired the property out of foreclosure and had marketed the property to re-sell.
The problem was/is, the current owner thinks his property can be converted to a resort casino.
(Just so every reader knows, just because you own a property in Las Vegas doesn't mean you can have an Unrestricted Gaming License to operate a casino on your land.)
So, I found the property, negotiated a fee and signed the appropriate agreements to proceed with 'selling' this current owners property.
As the information about the property was received in my Inbox, I perused it and was amused at the verbiage while reading the appraisal.
Digging into it further, I re-read the appraisal and was concerned at the verbiage: Hypothetical Market Value.
Now, as everyone who has ever acquired a property -- most of you might have bought a house -- knows, that the appraisal sets a market value for a property -- usually for the lender's purpose of financing the purchase.
So, when I read the words: Hypothetical Market Value in this current owners paperwork I knew that the appraisal wasn't going to be able to be used for any financing. And, it would never pass a review appraisal process. I had a good chuckle.
I called my client and asked if he had noticed that. He did. But, he wasn't using that as a basis of value. He was using the current owner's financials for the property and he determined that the property was worth about half what the current owner was asking.
I had to agree.
Well, I emailed the current owner and told him my and the client's concern about the value.
Even though the property was located on Las Vegas Blvd, it was no where even close to being on the "World Famous Las Vegas Strip!"
And even though the zoning was H-1 -- and there was a resort casino nearby -- obtaining an Unrestricted gaming License on this property was going to be difficult at best.
(FYI: Most resort casinos don't share a property line with a SFR residential neighborhood. Check that out the next time you are in Las Vegas for a visit.)
Bottom-line here is: Just because you own a Las Vegas real estate property, and just because their street address contains Las Vegas Blvd, that doesn't mean the property is valued at or even worth $10 Million an acre.
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