Las Vegas Luxury Properties Link

I have been working with a few investors looking to purchase investment properties in the last couple of years.  Some of my clients have bought 1 income property, and others have bought 4-5 properties.  CNN Money earlier this year claimed Las Vegas and the best city to buy an investment property/rental property for those looking to put their money into something a little more stable than the stock market. "Overall, the highest ratings are in markets where home prices have fallen substantially," said Ingo Winzer, founder of Local Market Monitor. "Home prices in these markets are also below average, so empty homes are easily turned into competitive rental properties." The cities were ranked by estimated future returns compared with the projected national average return. According to Local Market Monitor's data, for example, investors in Las Vegas who rent out the properties they buy now will have a 4.7% higher return than the 5.3% national average."

Some neighborhoods in Las Vegas have seen a drop in home prices from the peak of the market as much as 65%.  Many of the available homes for sale here in the valley are priced so low per square foot that the replacement cost to rebuild is higher than the purchase cost.  When prices are cheaper to purchase than to rebuild, investors start to flock towards the market.  Consistently over the last year, 48-54% of our transactions were purchased with CASH.  That is a massive amount of money flowing into our city. Always follow the cash.

For those out of town investors looking to capitalize on our prices and great cash flow, the biggest question I get is where they should purchase.  I almost always answer their question with a question to get a better sense of what your goals are.  Are you going for appreciation? Are you going for cash flow? Are you holding long term? Are you trying to flip properties?  Do you have a time frame?  Are you a foreign national?  Most of the investors I'm speaking to say they want appreciation AND cash flow.  

The most rent-able investment properties with some of the best cash flow have these attributes:

• 1400+ sq ft
• 3 bedrooms
• 2 bath
• 2 car garage
• small yard
• Rents for $900-$1200
• Taxes will range from $1500-$2000 a year
• Home Owner's Association fee vary depending on Neighborhood

These types of homes can be purchased for $90k-$140k depending on the area and upgrades.   This falls in line with our median home price in Las Vegas which is $130,000. If you'd like to get a better quality home above the median price, I would recommend looking at property in the $190k-$225k price range.  In this price range I would try to get a home with these attributes:

• 2500 sq ft
• 4 bedrooms
• 2-3 baths
• 2-3 car garage
• bigger lot size
• Rents for $1800-$2300
• Taxes will be $1800-$2600 a year
• Association fees will vary depending on the community.

I work with a property manager to whom I refer all of my investors.  She can help rent out your property, collect rents, screen applicants, and help with repairs.  I definitely recommend using a property management company when purchase out of state as it'll help reduce the stress and headaches.  

Some popular neighborhood that I've helped investors purchase rental income properties:

Summerlin

Rhodes Ranch

Peccole Ranch

Mountain's Edge

Henderson Green Valley

Northwest Las Vegas

These are just a few of the most popular areas in the Las Vegas valley. There are plenty of great communities that would be perfect for a rental home. 

If you would like a free relocation guide to Las Vegas, please click this link.

Please feel free to contact me directly, at 1-866-589-1646 for more information regarding your real estate investments. Feel free to start your own search of the MLS below.  This system is updated hourly and is more current than Realtor.com.  You can save your favorites, get notified of new properties, and track prices.   I have the ability to send you properties with very specific search terms, so if you need a specific type of property please call me.

Felipe Crook

Prudential Americana Group Realtors

1-866-589-1646

felipe@felipecrook.com

The Las Vegas housing market is heating up....and it's not just the summer heat.  Over 4,471 properties sold last month compared to 4,185 homes from June of 2010 showing a nearly 7% increase in number of sales while 3,900 properties sold in May of this year.  Part of that increase has to do with our prices.  The average home that sold in June of this year sold for $151,682 and was approximately 1900 sq ft. With 52% of all of those transaction being CASH, investors and first time buyers are capitalizing on our incredible prices. CNN Money reported that Las Vegas had the best rental property market in the country for investors.  I'm currently working with a lot of investors who are looking to produce passive rental income, with many getting returns on their investment of 9-15%!

   Las Vegas has always been an exciting market for real estate, and now is no different. So often when I'm first meeting buyers to explain the market and show market stats, they are shocked at the speed and competitiveness of real estate in the desert.  The national trends do not always reflect what is happening in our local market. It's crutial to work with a Realtor who understands and communicates the market so you don't miss opportunities.  If you would like to see all available homes in Las Vegas for Sale and search like a Realtor would click the link to the left. You can also learn about Las Vegas Neighborhoods here.  The National Association of Realtors recently reported:

Existing-home sales eased in June as contract cancellations spiked unexpectedly, although prices were up slightly, according to the National Association of REALTORS^®.Sales gains in the Midwest and South were offset by declines in the Northeast and West. Single-family home sales were stable while the condo sector weakened.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June from 4.81 million in May, and remain 8.8 percent below the 5.23 million unit level in June 2010, which was the scheduled closing deadline for the home buyer tax credit.

Lawrence Yun, NAR chief economist, said this is an uneven recovery. "Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month," he said. "The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year."

Yun cited other factors in the sales performance. "Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders."

The national median existing-home price for all housing types was $184,300 in June, up 0.8 percent from June 2010. Distressed homes - foreclosures and short sales generally sold at deep discounts - accounted for 30 percent of sales in June, compared with 31 percent in May and 32 percent in June 2010.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.51 percent in June, down from 4.64 percent in May; the rate was 4.74 percent in June 2010.

Key Issues

NAR President Ron Phipps said home sales should be higher. "With record-high housing affordability conditions thus far in 2011, we'd normally expect to see stronger home sales," he said. "Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery."

Phipps added that lower mortgage loan limits, due to go into effect on Oct. 1, already are having an impact. "Some lenders are placing lower loan limits on current contracts in anticipation they may not close before the end of September. As a result, some contracts may be getting cancelled because certain buyers are unwilling or unable to obtain a more costly jumbo mortgage," he said.

Total housing inventory at the end of June rose 3.3 percent to 3.77 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace, up from a 9.1-month supply in May.

All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent inJune 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 31 percent of homes in May, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.

The balance of sales was to repeat buyers, which were a 50 percent market share in June, up from 45 percent in May, which appears to be a normal seasonal gain.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.24 million in June, but are 7.4 percent below a 4.58 million pace in June 2010. The median existing single-family home price was $184,600 in June, up 0.6 percent from a year ago.

Existing condominium and co-op sales fell 7.0 percent to a seasonally adjusted annual rate of 530,000 in June from 570,000 in May, and are 18.0 percent below the 646,000-unit level a year ago. The median existing condo price⁵ was $182,300 in June, up 1.8 percent from June 2010.

Regional Performance

Existing-home sales in the Northeast fell 5.2 percent to an annual pace of 730,000 in June and are 17.0 percent below June 2010. The median price in the Northeast was $261,000, up 3.1 percent from a year ago.

Existing-home sales in the Midwest rose 1.0 percent in June to a pace of 1.04 million but are 14.0 percent below a year ago. The median price in the Midwest was $147,700, down 5.3 percent from June 2010.

In the South, existing-home sales increased 0.5 percent to an annual level of 1.86 million in June but are 5.6 percent belowJune 2010. The median price in the South was $159,100, down 0.1 percent from a year ago.

Existing-home sales in the West declined 1.7 percent to an annual pace of 1.14 million in June and are 2.6 percent below a year ago. The median price in the West was $240,400, up 9.5 percent from June 2010.

Felipe Crook

Prudential Americana Group

1-866-589-1646

With over 300 million users on Facebook, it's pretty clear that many people's preferred method of getting information is through social media.  I've created a Fan Page on Facebook that allows users to see all of my post on the Las Vegas Luxury Home Market.  It will have links to great articles, hot properties, and the latest trends and statistics. To become a fan, simply click on the box below. Once you are on the fan page, click become a fan. Having this fan page will enable you to communicate easily, by posting questions, or adding hot properties to the wall.

Las Vegas Luxury Homes

As always, free feel to contact me directly, toll free at 1-866-589-1646 or email me at felipe@felipecrook.com

You can also search for las vegas homes anytime here, or simply start search below.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas NV 89117

One of my trusted mortgage bankers sent me an email last week with some wonderful guidelines for FHA loans. FHA stands for Federal Housing Administration and they are probably the most used loan product currently in our market. FHA loans are government backed loans for properties, and one of the only with small down payment requirements. To learn more about the history of FHA click here. Guy Sheets works with Cornerstone Home Mortgage which is a direct lender which translates to am easier, less expensive loan for you. I personally have used Guy on my home and he's a wonderful lender. If you call Guy Sheets, please tell him Felipe Crook sent you and he'll take special care of you. Here are his tips for FHA:

• FHA limits Clark County now $400,000; this is a temporary housing program started 3/1. Bush did the same thing 4/19-12/31 and Obama just started it and it is set to expire at the end of this year.
• Conventional/Conforming (NON-Jumbo): $417,000
• FHA is 3.5% down and can be a gift.
• Conventional is usually 0-5% down (Fannie Mae Flex and Freddie Mac) as some government-sponsored entities for first time buyers used to have a zero down program, BUT now cannot get mortgage insurance AND we are in a declining market <a few bullets down> so short answer is 10% down for owner-occupied (hard to get mortgage insurance and it is pricey), 15% down for second/vacation homes (harder even still to get mortgage insurance) and 20% down for investment properties
• Jumbo loans (aka Non-conforming; called that because the amount does not "conform" to local limits of Freddie and Fannie per county): 25% down at least, strong FICOs and reserves needed. Generally, add .75 to a non-jumbo/conforming conventional rate and also costs the buyer 1.0-1.75 points extra as of 1/1/09.
• Declining Market: ALL loan to value percentages reduced by at least 5%. NV is on the list, with CA, AZ, FL, MI, and many others. If prices flatten out for 3-6 months, we can be taken off this list. Until we do, conventional loans require at least 5% down extra on top of regular guideline requirements. Government loans (FHA and VA) do NOT have declining market reductions in loan to value percentages. Mortgage insurance (on conventional loans) is almost impossible to get. Even if we can get a program to take 5% down (say Fannie Mae Flex for example which used to be 0% down, but now takes 5%), we cannot get mortgage insurance until we are out of the declining market.
• FHA minimum FICO: one investor we use will take a 600 or higher. The remaining banks require a 620. For joint buyers, we take the middle score of three bureaus AND the lowest of the middle scores of all borrowers. For example, if wifes scores are 605, 598, 580 and husbands 610, 602, 565, the representative scores would be 598 and 602. FHA must take husband and wife so they would not qualify. VA moving in the same direction
• Non-traditional credit: the old way was to show power bills, SW Gas, cable, layaway, insurance, health club, etc. as alternative lines of credit. ONLY ONE investor will now take this and that wont likely last. Borrowers need three trade lines, at least 12 months old in rating/reporting.
• FHA: there are NO seller-mandatory costs. In English, seller pays the same closing costs on an FHA loan as they do on a conventional loan. Seller can contribute up to 6% of purchase price towards buyers recurring and non-recurring closing costs.
• VA: the ONLY seller-mandated closing costs are Pest/termite inspection <required on EVERY VA deal> and tax service, which we dont charge anyway. Just make sure you check the box of "seller" on the purchase agreement and maybe note that it is part of sellers contributions towards buyers closing costs
• Appraisal costs: conventional: $350, VA/FHA: $400; investment properties: $500 (they do a profit and loss statement and rent schedule to give buyer some income on their loan to offset the new mortgage). ADD $50 for a re-inspection to correct repairs and take new photos.
• Turn times for appraisals: FHA and conventional: after we order, 5 business days until we get a report and hope that there are no appraisal conditions/repairs needed. VA: goodness only knows. They have 10 calendar days (excluding federal holidays) to get to the property then 3 more days to get us the report so just think 2 weeks!
• What we need before we order an appraisal: FULL purchase agreement, signed by all parties (sometimes, they will let us slide on a bank-owned, depending on the addenda and counters), all addenda, and all counter offers. We cannot order an appraisal without this.
• Who pays for the appraisal: depends on how you write the contract. You cannot ask a seller on FHA to pay 6% of the purchase price towards closing costs AND reimburse the appraisal fee, as that exceeds the limits. We read what you write in the comments. Most agents write something to the effect of buyer or buyers lender to pay for the appraisal upfront and be reimbursed at close of escrow as part of sellers contributions toward closing costs.
• FHA and VA appraisal requirements: "health and safety:" no broken windows, no bare floors, no drywall holes (FHA more lenient than VA), if no stove-OK but need the hookups, AC and heat must be working, and ALL UTILITIES must be on and water running/working, no leaks, hot water heater operational, no exposed wiring, stair rails attached, just to name a few.
• Condos: community MUST be approved. Here is a link for FHA/VA: https://entp.hud.gov/idapp/html/condlook.cfm and you just type in the name of the complex and see the latest results. Also, link to check for FNMA (Fannie Mae) for conventional financing is: https://www.efanniemae.com/sf/refmaterials/approvedprojects/ Then, just know on ANY condo (not town home), we have to send a questionnaire to the community at our upfront cost that we bill to the buyer at close of escrow. The questionnaire will ask if there is litigation (if any pending, NO loan will go) and the owner occupancy percentage. We need 51% to be owner occupied.

Does this help?

Here is another tip on closing costs needed when you are having seller pay for them. Remember, taxes are very high right now in proportion to closing costs. Typically, the buyer has to pay 6 months up front at closing. Years ago when prices were soaring, the yearly taxes only represented about .87% of the total purchase price. Now, they are around 1.5%. Also, appraisal and flat title and closing costs used to represent a small proportion in relation to the purchase price, but now with prices so low, closing costs on a percentage basis have risen. Yet another problem on the bank-owned homes is a new trend by the title companies that seems to add a lot of extra junk fees to the buyers side. I think they bid so low to get an REO account, they have to make up the difference in buyers added fees. Here is a guide with parameters if it helps:

FHA: Seller can pay up to 6% towards closing costs. For home prices, if buyer is looking for ZERO move-in or around $500-$1000, 1 pt. origination and NO rate buy down, agent includes appraisal reimbursement and HOA membership fees in the closing cost assistance and if the agent has a transaction fee, and they close middle to end of the month:

House Price Closing cost % needed

$50-$100,000 5.5%

$100,000-$130,000 5.0%

$130,000-$160,000 4.5%

$160,000-$200,000 4.0%

$200,000-$250,000 3.5%

$250,000-$300,000 3.25%

$300,000-$350,000 3.0%

$350,000-$400,000 2.75%

Guy Sheets

Certified Mortgage Planner

Cornerstone Home Lending

9708 Gilespie St., #A-102

Las Vegas, NV 89183

Office: 702-492-5077

Cell: 702-521-6530

Fax: 702-492-5078

Apply online at www.Guy4HouseLoan.com Felipe Crook Prudential Americana Group Realtors Las Vegas Nevada 1-866-589-1646

If you would like to search all Las Vegas properties currently available on the MLS, save your favorite properties, and get notified of new listings that come onto the market, you can start your search right here on this website.  If you are looking to do a more specific type of search, please fill out the contact form at the bottom of this post with your needs and I will customize a search on the Multiple Listing Service and email you all matching properties.  You can also contact me directly by calling 1-866-589-1646.