Yesterday, a Multi-family investor from the Midwest that I have been trying to help buy a Las Vegas motel/apartment property, asked for the impossible.
Using the all too typical phrases of: "I'm a cash Buyer." "I can close quickly." You get the inference.
He's looking for a property which he can steal.
I've tried over the past two weeks to emphasize that the steals have been gone since 2012-13.
Here in 2018, you must accept the fact that a 10% Cap Rate purchase is NOT going to happen.
With the large national real estate firms in the passed year having acquired the larger apartment complexes in Clark County for Tens of Millions of Dollars, this has driven the smaller apartment owners/sellers to raise and keep a firm stance on their selling prices.
Sorry but if the national firms are buying at a 5% Cap Rate. Your 10% offer is going no where.
The current problem causing this is the housing problem in California. There was a report that the cost of California housing and apartment rents are so high, that (employed) people find it cheaper to buy an RV, park it on a quiet street, and live there -- all while they have a day job!
This housing crisis in our west neighbor has caused a lot of it's potential residents to move east to "cheaper" housing in Nevada!
Now, I'd sell my medium income neighborhood home to any qualified person. I just don't have a place to move forward to.
And, as the wife said at dinner last night while discussing this topic, we don't want to start over - again.
So, even though our empty-nest home is worth three times what we paid for it, it would cost us three times to acquire a 'newer' residence.
This leads us back to the problem of multi-family acquisition cost.
Unless you understand the economics of the Las Vegas Valley situation, prices are going to be too high for you.
One seller I represent, has a portfolio of homes that he rents out by the bedroom.
If the home has three bedrooms, he rents out each bedroom to a different family.
He does this because it is cheaper for the low income family to share a house than rent one out by themselves!
Plus the landlord is able to get a higher than normal rent with three tenants than one!
Is it legal?
Hell, no.
But, it is happening all over the Valley.
Also, the Motels aren't as cheap either because before finding a stable place to stay, most transient families will stay at a low rent motel for up to 30 days, then move to another place -- all the while searching for work and a home.
So, will the Owners sell cheaply?
NO!
But, as the buyer, will you have a lot of potential tenants?
YES! (for right now).
Who knows what's going to happen to real estate in the near future?
To Contact David Howes try: davidATdavidhowesDOTnet OR; 7 0 2 5 01 9 3 8 8 AND Please #Follow David on Twitter: @DavidAHowes Have a nice day!
Using the all too typical phrases of: "I'm a cash Buyer." "I can close quickly." You get the inference.
He's looking for a property which he can steal.
I've tried over the past two weeks to emphasize that the steals have been gone since 2012-13.
Here in 2018, you must accept the fact that a 10% Cap Rate purchase is NOT going to happen.
With the large national real estate firms in the passed year having acquired the larger apartment complexes in Clark County for Tens of Millions of Dollars, this has driven the smaller apartment owners/sellers to raise and keep a firm stance on their selling prices.
Sorry but if the national firms are buying at a 5% Cap Rate. Your 10% offer is going no where.
The current problem causing this is the housing problem in California. There was a report that the cost of California housing and apartment rents are so high, that (employed) people find it cheaper to buy an RV, park it on a quiet street, and live there -- all while they have a day job!
This housing crisis in our west neighbor has caused a lot of it's potential residents to move east to "cheaper" housing in Nevada!
And, as the wife said at dinner last night while discussing this topic, we don't want to start over - again.
So, even though our empty-nest home is worth three times what we paid for it, it would cost us three times to acquire a 'newer' residence.
This leads us back to the problem of multi-family acquisition cost.
Unless you understand the economics of the Las Vegas Valley situation, prices are going to be too high for you.
One seller I represent, has a portfolio of homes that he rents out by the bedroom.
If the home has three bedrooms, he rents out each bedroom to a different family.
He does this because it is cheaper for the low income family to share a house than rent one out by themselves!
Plus the landlord is able to get a higher than normal rent with three tenants than one!
Is it legal?
Hell, no.
But, it is happening all over the Valley.
Also, the Motels aren't as cheap either because before finding a stable place to stay, most transient families will stay at a low rent motel for up to 30 days, then move to another place -- all the while searching for work and a home.
So, will the Owners sell cheaply?
NO!
But, as the buyer, will you have a lot of potential tenants?
YES! (for right now).
Who knows what's going to happen to real estate in the near future?
To Contact David Howes try: davidATdavidhowesDOTnet OR; 7 0 2 5 01 9 3 8 8 AND Please #Follow David on Twitter: @DavidAHowes Have a nice day!
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