Finding the ideal Las Vegas Real Estate Investment has rarely been easy, regardless of the experience one has in investing, however, there are certain criteria that an investor looks for that, if met, would be worthy of follow-up.
Let’s look at what could be signs of a very promising investment:
- The property is listed at a substantially lower than market price
- Very favorable financing conditions; interest rate, terms, down payment, etc.
- Property well suited for either resale or rental
- Desirable location
- Property is in excellent condition, or good or fixable condition, without major defects
- Property is vacant, or has a long-term tenant or tenants with good payment histories
- Zoning is favorable for high or better use.
Of course, it’s unlikely that a promising investment will meet every one of the above criteria, and it’s up to the investor as to which of these conditions are the most important, and in line with investment objectives and goals.
Additionally, the savvy investor will carefully dig into all of the details involved in the purchase in order to ensure that this deal really is a bargain. The investor will examine such criteria as:
Does the seemingly low asking price reflect true market values? Are there other underlying reasons for the property selling at below market? Will an inspection reveal serious repair issues? A serious investor, without the “get rich quick” mentality, is not price fixated, and will probe beneath the surface of every transaction.
- How seriously will the costs involved in selling the property (liquidation) such as repairs, agent’s commission, closing costs, etc. impact profit margins?
- Is the property in a location that can support rental income that will generate the cash flow that meets the investor’s expectations? Would the purchase price allow a resale profit margin acceptable to the investor?
- Will the location support high or low end rentals? Would the location be attractive to families? What are the zoning restrictions of this location?
- If an inspection uncovers underlying problems that may be expensive to correct, will the seller renegotiate price and terms?
- Is the property owner an individual? Is the property in distress? Is this property being marketed as a short sale, foreclosure, REO, HUD or VA repo?
- Who actually owns the property?
- Is the property free and clear of any liens, such as first, and/or second mortgages, contractor liens, etc.?
Bottom line: As any experienced investor knows, there is often more than meets the eye when it comes to evaluating what may or may not constitute a “bargain” property.
Tony Sena is a Las Vegas Real Estate Broker/Salesperson and Designated Property Manager with North American Realty of Nevada. He currently oversees a team of 10 real estate agents and manages the Property Management Division. He can be reached at 702.376.0088.