I've been so bad.....

The Lazy Investor
After that 'killer' deal a while back, I've been really slow to get back into telling you even more about what's going on in the world of Real Estate around here.

And with the demand for my time teaching my LAZY methods at different events, it seems that my 'blog' hasn't gotten the attention it should.

So, today, I'm going to correct that!

Here's what is happening in our Real Estate world...

The market in Las Vegas has changed - drastically.

You know I like to keep things simple - and one extremely simple way to 'check out the market' is to take a look in the newspaper to see how many 'For Sale' ads are running.

Here's what a quick look at today's paper is telling me...

2 ads for houses < $100,000 (we use 'K' for short...) 3 ads for houses $100K - 150K 16 for $150K - $200K 47 for $200K - $300K 39 for $301K - $400K 92 for $401K - $500K and 92 for homes >$500K

Does that tell you something? It does me!

The prices of property in Las Vegas are HIGH (as if we didn't know that... ;)

On average, the price of 'what is available' (with the LAZY research we just did) is between $200K and $400K (eliminate the >$500K properties - they range all over the place... and I tend to stay away from the 'highest' homes - it is obvious that they aren't selling right now either...)

The issue though is not in the price, it is in the 'debt service'...

From The Lazy Investor's Guide to REAL ESTATE CD of Real Estate Definitions, "Debt Service" is defined as the price you pay every month to cover the mortgage.

Usually, that includes any/all costs, including taxes, insurance, principle and interest (PITI) plus any/all additional costs incurred by the property - like Home Owner's Association fees (HOA) or anything else.

In doing just a bit more research (on mortgage rates and such), I figured out how much the debt service would be on our 'average' property of $300K.

Of course, I could use my (even simpler) method of The Rule of 7 from The Lazy Investor's Guide to REAL ESTATE (page 97), but I'll stick to the more difficult way and look it all up - this time...

A loan on of $300K, at even the 'best' rate of 3.724% (that's on an ARM - may not be what you want to do...), the payment is $1384.92/m...

Now, let's get back to the paper and see what the 'rental market' is brining in...

One of the 'most desired' (if you ask those that own property there...) areas of Las Vegas is Summerlin. It is a newer area, where the Realtors(r) have been raising prices for several years (did I say that.... - well, let's keep the comments to a minimum here... - as you might can tell, the agents and the market they have created in Summerlin are not what I call an "investor's mecca...")

Anyway, here's what my 'at a glance' research tells me...

With 763 ads in the For Rent section, there is a LOT of competition, which keeps the price down.

Many of these ads are for Summerlin properties (I wonder why.... agents driving up prices, 'investors' that don't have a clue are buying in the frenzy and now, are holding overly-inflated property values dear to their hearts....)

Here's some real data - - -

summerlin - 4bd 3ba,1900sf W/D/R, $1195/m - this is 'high dollar' as we can also see in the same paper that >2000 sf properties are only slightly higher (I found a 2550 sf for $1450/m...)

So, depending on the exact house we are talking about, the 'rent' in the area (I didn't take the time to average 700+ properties!) is about $1300/m.

NO MATTER WHAT, anyone that buys a property at 'market price' in that area CANNOT service the debt - causing NEGATIVE CASH FLOW!

Does that stop investors - are we doomed to never have any more deals in Las Vegas?

I think not.

But, we have to be creative about it. Building 'win-win' scenarios isn't as simple as it was in the other marketplace, but it is still possible.

That's part of why I've been 'quiet' for awhile - I've been researching and determining what my next steps are to be for the market in Las Vegas, as well as seeking out other markets that do still cover the debt service and are on the rise.

When will you learn more about all this research? Drop in to The Lazy Investor's Real Estate Boot Camp (http://TheLazyWayToBuyRealEstate.com) and I'll discuss everything I've been doing!

Happy Investing,

Steve