Surviving and Thriving as a Real Estate Agent: Part 3

In my last two articles, I have discussed how real estate agents can not only survive, but thrive in this challenging real estate market.  I have covered the first three points in my four point plan:

1. Develop Your Niche
2. Become An Expert in Your Field
3. Be Mobile/Adapt
4. Develop a Marketing Campaign

Today I will cover the final point: Develop a Marketing Campaign.

Once I have developed my niche and determined specifically where I am going to invest and recommend that my clients invest, I create my marketing campaign to go find the investors.  I could easily write an entire book just on marketing for real estate agents, and I look forward to sharing more articles with you in the future on this topic, but for now I will share a few brief thoughts here to put you on the fast track. The marketing materials that I use are designed to aid the investor in making an informed decision on the investment they are currently considering. 

• The first item in this package is the “e flyer.”  This flyer is a colorful,
eye catching marketing piece that lists all the features and benefits of
the potential investment in a concise, easy to understand format.  I
send these flyers out to investors in the form of email blasts and
their purpose is to catch the investor’s eye and encourage them to read
more about the investment opportunity that I am offering.  To view an
example of one of my recent investment
flyers:www.viewpointequity.com/MGMFlyer.pdf  
• The second item that I include in my marketing package is a
proforma worksheet.  I have always used proformas to analyze
my own investments and I find it is an excellent tool to share
with my clients as they consider similar investments.  If the proforma
is done well and accurately, it will not only aid the potential client
in understanding the financials of the investment, but it will also
build your credibility in the eyes of your customers as not just a
Realtor, but a seasoned investor that actually understands the
investment process.  Having actual numbers plugged into a spreadsheet
gives the investor a sense of comfort with you and with the investment,
and helps to eliminate the feeling of the “unknown,” especially for
new investors.  All-in-all creating an informative and professional
marketing package for the properties that you are looking to sell
and including realistic projections and other data helps investors
to accurately evaluate a deal and establishes valuable credibility for
you that will result in repeat business, referrals, and client loyalty.
• Another tool that I use with outstanding results is my monthly
newsletter.  Different than a typical “Realtor” newsletter that might
feature recipes and other useful but non real estate related information,
my newsletter is filled with statistics, actual deals, potential
deals, education and opinions of the market in which I am currently
working.  Sending this out to my database on a monthly basis allows me to
stay in front of them and remind them that I am always looking for the
next best deal when and if they are ready to get involved.  To see my
latest newsletter: www.viewpointequity.com/newsletter.pdf
• My final, and perhaps most important marketing strategy, involves not what
I do, but what I don’t do.  I have found that my strengths as a
business person lie in my abilities to create leads, talk to clients,
sell properties and negotiate deals.  My strengths do not lie in the field
of internet marketing or graphic design.  Because of this, rather than
spend my time working on my own e flyers and newsletters, I employ an
internet marketing/graphic design firm to handle these details for me.  When
I am ready to create a marketing piece, I do the overall concept
management, writing, thinking, and analyzing and forward it on to
my specialist for the design of the marketing materials.  Once back to me
I make suggestions and changes to put the final touches on the material. 
I suggest that you too spend more time on the areas in which you
specialize and less time playing with graphic design programs on your
own computer.  This one idea (the virtual marketing assistant) has helped
me tremendously in getting more effective marketing material produced
faster than I could otherwise produce myself, leaving me free to
pursue sales.  If you are interested in contacting the firm that handles
my marketing, you can reach them through their
website:www.spiraldigitalmedia.com

If you follow these four simple steps, you will be well on your way to thriving as a real estate agent, even in a down economy.

Surviving and Thriving as a Real Estate Agent: Part 2

In my last article, I discussed the steps Realtors can take to thrive even in these challenging economic conditions. These steps were:

1. Develop Your Niche
2. Become An Expert in Your Field
3. Be Mobile/Adapt
4. Develop a Marketing Campaign

In this article, I would like to discuss Steps #2 & #3 in further detail.

Becoming An Expert in Your Field

I cannot stress enough how important it is to identify a niche (as we discussed in the last article) and establish yourself as an expert in that particular area. Clients genuinely appreciate and flock to agents who really know what they are talking about. Do your research.

I have found that Google Alerts provides me with an excellent vehicle for educating myself and staying on the cutting edge of topics that I am interested in. All you have to do to use Google Alerts is to sign up for a Google or Gmail account, sign in to their alert system, register your key words/topics that you are interested in and begin receiving the best articles and blogs to follow on a daily basis.

When I identify a hot spot for investors, it is because I have done extensive research on that topic. I am able to combine the knowledge I derive from that research with the gut feelings that I have been able to develop over the years. I also travel extensively and am always personally checking out areas that are on my radar. There is no substitute for first hand knowledge. If you are planning on specializing in a certain development or neighborhood, make sure that you visit that area on a regular basis to stay abreast of changes, new growth, different conditions, etc. The last thing you want is to market yourself as an expert in a certain area and then be surprised when your potential client knows more about the project or neighborhood than you do.

Also, in my research, there are some experts in their respective fields that I follow closely and whose opinions I respect. These individuals and groups include: Bruce Norris and the Norris Group, John Burns Real Estate Consulting, Robert Shiller and the Case Shiller Index, and local Las Vegas economist Keith Schwer. These men and their support staffs do an amazing amount of research and by reading up on their newsletters and reports it is easy to stay on top of and spot trends in the marketplace.

Be Mobile/Adapt

I would like to expand on the idea of traveling to the investment hot spots. Being in the places where people actually want to buy, and are buying, will enhance your chances of becoming a leader in your field. Specializing in a niche within a niche will also help establish your reputation as a leader in your area of expertise.

Between 2003 and 2006, I was heavily involved in several real estate markets. Whereever the hottest market could be found… I was there. I was in Las Vegas, Phoenix, Albuquerque, and North Carolina just to name a few. I stayed tuned-in to where investors were heading, as I was one of them, and invested in all of these markets myself. Since the summer of 2008, I have specialized once again in the Las Vegas valley, but this time it has been foreclosures and REO properties… not new construction homes. I knew it was time to gear myself back up for sales in the Las Vegas area as I watched the prices of single family homes and condos drop rapidly due to the glut of foreclosures flooding the market. These lower prices created homes that could be purchased and rented for very good cash flow… better than Vegas has seen in decades. I took the opportunity to begin educating myself about this niche in this market, develop my marketing materials, and get ready to welcome the investors that I knew would soon come running into the Las Vegas housing market once again.

Even if you cannot travel as extensively as I did in the search for the nation's hottest real estate markets, it is important to stay mobile within your own home area. Perhaps one neighborhood in your city or town is in transition. Perhaps a lot of rehabbers have moved in and are turning the neighborhood around. This might represent great upside buying potential for your clients. This phenomenon will only last so long though. Soon prices in the neighborhood will begin to rise and it will be time to move on and look for the next buying opportunity.

Above all, it is important to adapt. No one real estate market, or project, or strategy will work long term. We must be willing and able to continuously adapt. Our chosen niche will often dry up and we must be ready to pick a new niche and move on.

Next time we will discuss Step #4.

Surviving and Thriving as a Real Estate Agent: Through Good Times and Bad

Surviving and Thriving as a Real Estate Agent: Through Good Times and Bad

It is no secret that real estate agents, as well as other real estate related professions, have had a difficult road over the last few years. The rise and fall of the national real estate market created a feast then famine scenario …and many agents have not survived the famine. Meanwhile, over the last 5 years, I have sold over 500 single family homes, condos, or land lots…including closing on 30 properties last month alone. This volume places me in the top 5% of all Realtors in the country (in both transactions and commissions.) I would like to share with you, over my next few articles, how I have been able to achieve this success. (And you don’t even have to buy a video course or purchase a web book!) My success through these difficult times has not been due to luck but rather due to a particular mindset that has worked very well for me.

Thinking As An Investor

This mindset has entailed thinking as an investor instead of as a Realtor. My career in real estate began as an investor. I enjoyed great success purchasing my own investment properties, and began to help other investors find deals for themselves. Several years later, the natural progression was to get my realtor’s license. As a result, I have never really considered myself a Realtor by trade, but rather an investor who helps other investors. At the moment I currently own over 20 investment properties myself. This helps me to understand what investors are looking for and the challenges they face in the current market. But owning your own investment properties is not a prerequisite to thinking like an investor. In order to position yourself as an investors’ Realtor you don’t have to own a lot of properties yourself, but you do have to develop a reputation with your clients for being more interested in their bottom line than you are in your commission. I have been able to do this, and in so doing grow a large investor database, by using the following strategies that I would like to share with you:

• Develop Your Niche

• Become An Expert in Your Field

• Be Mobile/Adapt

• Develop a Marketing Campaign

Over the next several articles, I will go over each of these steps in detail. Let’s start with the first one:

Developing Your Niche As An Investors’ Realtor

The first thing I have done is to develop a niche. I don’t try to know (or act like I know) everything about every area of real estate…rather I focus on a specific area. This area may, and sometimes must, change over time. In my case, I have always focused primarily on single family homes. For a while I worked on SFRs in CA, then I moved to AZ. I went through several other locales and for the last two years have focused on Las Vegas, NV. More specifically, I focus on the new Northwest area of the valley. 80% or more of my deals are located in this specific area. This is the area that I am comfortable with, knowledgeable about, and experienced in.

By becoming an expert in a particular area, I am better able to service my clients and identify for them the most profitable investments available. Reputation is everything in this business. You need to build a reputation for being well informed and very familiar with your area of expertise so that you can knowledgably and confidently advise your client whether or not a particular property will make a valuable addition to their portfolio.

In my next article, I will discuss how to become an expert in your chosen niche.

Drop Bids at Trustee Sales

Drop Bids at Trustee Sales

The Arizona Republic recently ran an article discussing the practice of "drop bids" at the Maricopa County foreclosure auction. When a lender posts a Notice of Sale amount (often referred to as the minimum bid) and then drops the amount hours or even minutes before the opening of the auction, this process is known as a drop bid and is considered illegal in Arizona. Ideally, lenders are encouraged to post the Notice of Sale amounts for foreclosure properties that will be sold at the trustee sale at least 24 hours prior to the start of the sale.

According to the article, up until recently, the majority of homes brought to auction through the trustee sale were failing to sell and were reverting back to the banks. These properties would then re-enter the market as REOs. This all changed last month as a record 1,000 properties sold through the public foreclosure auction process. This was five times the number that sold in January. According to the Republic, "Real estate market watchers and unsuccessful bidders at the auctions say drop bids are driving the record number of auction sales."

No one seems to be sure why banks would choose to lower the minimum bid without adequate notice. Those who are up in arms over the practice tend to imply that the reasons are malicious, but there are other possibilities. Kelly Braaksma, a trustee sale expert and CEO of FAST (Foreclosure Auction Service Team) a company that specializes in helping investors to purchase properties at auction, says that the uncertainties surrounding properties coming to auction may have more to do with last minute price changes than anything else. "Lenders are inundated with foreclosure properties," Braaksma says, "of the hundreds or thousands of properties slated to be auctioned off at any particular trustee sale, only a few dozen may actually make it up to bid. The rest are postponed, canceled, reinstated, etc. All the aspects of the sale, including starting bid price, are constantly in flux right up until the last minute."

Whatever the reason, the Arizona Republic continues by saying, "Drop-bid purchases enable the few who know about the deals to buy homes and quickly resell them for hefty profits...Buyers aware of the "drop bids" scoop up the houses before other bidders know about the price drops."

Mr. Braaksma has developed a system that analyzes historical opening bids from various lenders, along with a myriad of other data and generates algorithms that predict which properties are most likely to actually make it to auction and which will most likely have opening bids that make them worthwhile to investors. I have formed an alliance with FAST in order to provide this service to my clients looking to purchase at the trustee sale. I don't charge more for the service, clients pay only my standard commission at the close of a sale. But for this commission, they are provided not only with all of the reports and data that FAST generates, but also with a representative that will be present at every Trustee auction, available to purchase these choice properties and take advantage of last minute drop bids.

If you are interested in using trustee sales / foreclosure auctions to acquire property, please contact me and I will send you a packet with more information on the process:
Glenn Plantone (702) 769-9872

Click here to read the full Arizona Republic article

Mind the Gap

Mind the Gap

You know you've arrived in London when you step out of the "tube" and hear the oft-looped pleasantry over the loud speakers, "Mind the Gap!" The announcement is referring to the gap between the subway platform and the train. In the current Las Vegas real estate market, we must mind a gap of a different sort. Let me explain.

As a full-time real estate investor and investor agent (of my 80 sales so far this year, only 3 were to owner occupants) I am used to observing market trends first hand in my hometown of Las Vegas. As our market began to reach bottom 6-8 months ago, investor money from all over the country and internationally began flooding back into the valley looking to snatch up bargain priced Las Vegas real estate. For months, it was relatively easy for me to find great REO / bank-owned deals for my visiting investor clients. 85% of my clients were (and are) all cash buyers and I entertain an average of 4-6 investors each weekend. Las Vegas was (and continues to be) the foreclosure capital of the world, and for months REOs were in great supply.

But over the last several months, things have steadily begun to shift. I have had to work harder and harder to find good deals for my clients. I have repeatedly found myself in multiple bid situations and the competition for REO / bank-owned foreclosure properties has begun to drive up prices. September saw the first increase in median home price in Las Vegas in over two years. More and more investors are fighting for the properties that are available and potential owner occupants are becoming increasingly frustrated as banks accept one of the multitude of "sure thing" cash offers that seem to be present at every REO listing.

The reason for this feeding frenzy is simple: Demand is far exceeding supply. In the month of September 2009, nearly 3500 single family homes sold in Las Vegas. By contrast, only around 1800 homes went back to the banks through the foreclosure process. This creates a large "gap" between supply and demand. At first glance, one would think that this gap represents good news for primary residents struggling to sell properties through the "normal" sales process. For the last two years, it has been virtually impossible for normal listings to sell in Las Vegas as they had to compete with the overwhelming numbers of foreclosure properties that were making the market. So now that the supply of foreclosure homes is beginning to slow and the demand for properties is increasing, we should begin to see more homes selling through traditional listings right? Maybe not.

In order to understand this phenomenon, we need to be mindful of another "gap." The gap between the prices of bank-owned foreclosure properties and the prices at which owners can afford to list their homes. Prices have dropped so sharply in the Las Vegas valley over the last three years, that many properties have lost 70% of their value. Homes that were selling for $300,000 in 2004, are coming back on the market as foreclosures now for $110,000. This means that anyone who purchased property in Las Vegas in the last 10 years is probably upside down on their home. Those who purchased 3-5 years ago are drastically upside down.

This gap means that even as demand for property in Las Vegas increases, and supplies of bargain-priced foreclosure / REOs decrease, we are still likely not to see many traditional listings and closings for quite some time. The gap between what is owed on the homes and what the market will pay is just too great. The exception to this might just be the short sale, which is making a comeback as I addressed in my two previous articles.

Short Sales vs. REOs

As of September 2009, the nation's supply of REO homes has begun to shrink, even in foreclosure capital Las Vegas, NV. As investors flood back into distressed markets, we are seeing multiple bid situations for most REO or bank-owned foreclosure properties coming back onto the market. With demand exceeding supply, it is becoming harder and harder for investors to purchase REO properties at discount prices. Also, with the Obama administration offering hefty incentives for banks to help homeowners avoid foreclosures, REOs are becoming more scarce. Instead, we are seeing short sales skyrocket in popularity as banks have suddenly become willing to negotiate this option.

Many of my investor clients have asked me to explain the differences between short sales and foreclosures/REOs. First, the definition of each: A short sale occurs when a buyer negotiates with the bank to purchase a home from the seller for less than what the seller owes on the mortgage. In many cases, where the equity in the property has dropped sharply, this means that the second lien holder (if any) receives next to nothing on their note (think $1000 for a $90,000 note as an example) and the first position lender very often must still except less than the amount of the first mortgage. REOs are bank owned properties that have already completed the foreclosures process. The owner of the property, upon failing to make their mortgage payments, has been notified of their delinquency, received a notice of default and then a notice of sale. Subsequently the property has been sent to auction at the trustee sale where, in absence of a successful winning bid, it has reverted back to the bank holding the mortgage. These properties are then re-listed by the banks on the open market as REOs or Real Estate Owned meaning bank owned real estate.

The major differences between the two transactions can be summed up in two categories: Differences to the Buyer and Differences to the Seller.

Differences to the Buyer

Difficulty of Transaction - Short sales are traditionally much more difficult to transact than purchasing an REO. Once a bank has taken possession of a foreclosed property and re-listed it as an REO, that REO property can then have offers placed upon it and the bank will respond to those offers just like any other seller. Short sales must go through a special evaluation and approval process at the bank. This process usually involves not only evaluating the fair market value of the property, but also evaluating the potential of the current owners to continue making their payments. Sometimes, a bank will offer to modify the existing loan if the sellers wish to stay in their property rather than negotiate the short sale. This can result in the property being pulled from the market altogether.

Time Frame for Closing - REOs can often close in a 30 day escrow just like a normal transaction. Short sales can take months to negotiate and then might not be approved at all.

Price - Because the buyer is usually not competing against other offers in a short sale situation, they can often obtain the property for less than what the same property might end up costing as an REO.

Differences to the Seller

Future Home Purchases - Homeowners who go through a foreclosure cannot apply for an FHA loan for 5 years after the date of foreclosure (7 years for investors), but homeowners who complete a short sale can apply for an FHA loan 2 years later. When homeowners apply for a loan through a mortgage company, they must state on the application if they have had a property foreclosed upon or given a deed in lieu of foreclosure within the last 7 years. There are currently no questions on standard mortgage applications asking whether or not a homeowner has ever completed a short sale.

Credit Score - A foreclosure will typically lower a homeowner's credit score by somewhere between 250-300 points and this decrease will last approximately 3 years. Short sales can often affect an owner's credit by only 50 points and that decrease may sometimes be remedied in as little as 12-18 months.

As the supply of REO properties continues to be tight across the country, short sales are presenting a good buying opportunity for would-be investors looking to re-enter the market. They can also provide a win-win situation for home owners looking to escape a negative equity position with less of a hit to their future purchasing potential and credit score.

Trustee's Sale Becomes Best Buying Option as Home Prices Rise in September

As you may know I have been very heavily involved in the Las Vegas real estate market for the last six years, both as a private investor and as a licensed real estate agent. As an agent specializing in undervalued properties, I have sold homes and condos to both owner occupants and investors at great discounts...before and after the bubble burst.

The current Las Vegas market represents one of the greatest buying opportunities that we have ever seen in real estate. Prices have over-corrected as a result of the credit crisis and have come down to levels that are way below builders' costs. We are seeing condos selling at about $35-$45 per square foot and single family homes selling as low as $50 to $60 per square foot. From October of 2007 to May of 2009, the average median home price in Las Vegas fell approximately $10,000 per month...every month. As prices began to stabilize in the summer of 2009, investors realized that a bottom was arriving and began to flood back into the market. This past summer saw record sales volume in the Las Vegas valley. There were over 3700 closes in both June and July, 2009...beating even the previous monthly highs set in the summer of 2004, at the height of the bubble. Of these closings, 45% were cash deals and 40% were to investors (as opposed to owner occupants)...these numbers also exceed the percentages posted in 2004.

This extraordinary demand for great properties at great prices in Las Vegas caused the median home sale price to increase in September...the first increase in the Las Vegas market in over two years. September also saw sales taper off slightly. The general consensus, however, is that this decline is not because of a reduction in demand, but rather because of a drastic reduction in supply. In September only around 1800 homes were returned to bank ownership through the foreclosure process. In contrast, 3358 single family homes sold in this same month. Since almost 70% of all these sales were on foreclosure/REO properties, this represents a situation where more homes are being sold than are coming on to the market. The prices are low, the demand is high and, as a result, prices are starting to creep up on these REO sales. In addition, we are seeing multiple bid situations on almost every REO property that comes up for sale. These circumstances are making finding good deals by buying REO properties very difficult.

The most viable option at this time for acquiring properties below market value is at the trustee’s sale. Once the owner of a property passes his 90 day notice of default period, he is issued a notice of trustee’s sale. After the NOS, or notice of sale, is given, the owner has 21 days to cure the default or the property will be sold to the highest bidder at the trustee’s sale. Buyers at the trustee’s sale in Las Vegas are currently picking up properties for a discount of about 20% under the already heavily discounted REO listings that are setting current market values. For example: If a home sold in 2007 for $300,000, and it is now worth about $100,000 on the REO retail market, it may be picked up at the trustee’s sale for around $80,000. This would represent a buy price of approximately 25 cents on the dollar from the highs of just a few years ago.

I have spent the last several months working with a handful of investors and have made several purchases through the trustee's sale. If you are interested in finding good properties at the best prices in the hottest foreclosure market we have ever seen (and may ever see) please give me a call or shoot me an email and I can go over the details with you. Buying at the trustee's sale represents not only a great opportunity for the buy and hold investor to purchase properties for cash flow, but also represents the only viable opportunity for flip investors in Las Vegas to actually resell a property for a quick flip profit.

Over the last year, many of my clients have asked me about the feasibility of short sales…both from a seller’s perspective, as a way out of an upside down property; and from a buyer’s perspective, as a way to acquire properties below market rate. Up until recently I have advised most of my clients away from short sales…as a buyer or as a seller. The reason was simple: lots of time invested, small chance of success. As a rule, since the housing bubble burst and the credit crunch began, banks have been overwhelmed with defaults and the departments in charge of evaluating and approving short sales have been notoriously slow and inefficient. Trying to negotiate a short sale with the bank often resulted in frustration for all parties involved with a very low success rate.

As a result, I have advised my investor clients to seek out REOs as the best buying opportunity here in Las Vegas. Time, however, are changing. My recent articles on the Las Vegas housing marketing have highlighting the dwindling supply of bank-owned REO properties available. Each month the demand for these REOs and the closings exceed the fresh supply of foreclosed homes coming from the banks. This has resulted in bidding wars across the Las Vegas valley as investors and primary residents eager to capitalize on the best real estate buying opportunity in decades flock to purchase the REOs that make their way on to the market. But with the percentage of homeowners behind on their mortgages still at all time highs, why is the number of foreclosures entering the market declining? The answer may be the increase in short sales.

Brian Wargo of the Las Vegas Sun recently wrote an article discussing this increase in short sales. In it, he quote Larry Murphy, president of the real estate monitoring firm SalesTraq, who says that of the 35,742 closings through the first three quarters of 2009 75% were foreclosures and only 10% were short sales. However, of the 11,249 contingent sales currently in place in Las Vegas, 71% are short sales and only 21% are REOs or foreclosure homes. This represents a dramatic shift in banking policy.

Murphy believes banks are becoming much more willing to consider short sales because they are finally realizing that short sales generate a higher sales price for the banks than REOs. Data supports this. The median price of homes sold through foreclosure is $116,900, while the median price for homes sold through short sales is $150,000.

The federal government has also adopted standardized rules for short sales, simplifying the process. This, combined with the pressure being exerted by the Obama administration to keep homeowners out of foreclosure, is creating a much higher approval rate for short sales. This, in turn, is keeping the flood of foreclosures that we had been expecting here in Las Vegas off the books and creating the progressively lower inventory monthly of bank-owned REO homes.

All-in-all, whether you are a seller looking to get out of an upside down situation or a buyer looking to capitalize on low home prices, now may be a great time to consider the short sale as an option.

To read the entire article in the Las Vegas Sun CLICK HERE

Latest Update-MGM Signature Towers

It has been a little over three months since my last update on the MGM Signature Condos and I wanted to update my readers on the new developments that have been taking place. Those of you who are on my mailing list will have received a spread sheet I produced that details the profitability of a studio unit purchased recently for $150,000. This same unit was selling for $465,000 at its high three years ago. The spreadsheet shows that purchasing the studio unit for $150K, or roughly 32 cents on the dollar, would result in positive cash flow for the new owner.

In crunching the numbers on the MGM Condos, I have come across an interesting anomaly that I would like to share with you: The one bedroom units that are placed into the rental program have historically generated lower occupancy rates than the studios. Yet they cost about twice as much (the new lowest 1 bed sale has been $185,000), the HOA fees are nearly twice as high ($1000 vs. $500 for the studio), and they only rent for about $40 more per night. Potential investors should keep this in mind when considering studios vs. one bedroom units at the MGM Signature Towers. The one bedroom units are getting close to being a good deal for a buyer that is thinking of either living in it, renting it outside of the MGM rental program, or just holding it as a second home. But the one bedrooms are not as attractive as the studios from a pure investment perspective.


So far, the six lowest price studio sales in the entire project have been transactions that I have been able to negotiate for my clients. I was recently able to broker a deal in which one of my investors purchased a bulk bundle of four studio units at what amounted to $118,000 each. The Mountain View studio units are selling for the $120K-140K range and the strip view studios are now selling in the $140K to $180K range. The higher range would include the studios with a patio. The unit I discussed in the first paragraph that originally comped for $465K and recently sold for $150K, was a higher floor studio with a strip view and also a patio.

The inventory remains very light at this time. Currently, there are only 9 bank-owned foreclosures available in the MGM Signature Condos. 8 of them are studio units and one is a one bedroom condo. There are still quite a few short sales in various stages, but we are beginning to see a lot of short sales reverting back to the bank and becoming foreclosures as the short sale process is very slow and agents and banks are often unable to get them approved before the foreclosure happens.

Because of the light inventory of REOs and the difficulty in successfully negotiating short sales, I am beginning to look at the Trustees Sale in order to purchase affordable MGM Signature units for my investors. We are starting to see many studio units being sold at the Trustee Sale for around $120,000. MGM Signature Condos continue to be a great investment opportunity for those looking to acquire properties and utilize a buy and hold strategy. However, the really good news is that if you are looking to buy and flip, there is the opportunity to make $20,000-$50,000 per condo in a two month period through purchasing MGM Signature units at the Trustees Sale. If you are interested in this opportunity, please contact me for more details.

Mayor Goodman Speaks at Hugely Successful Meeting

Over 100 people pre-paid to attend the October meeting of the Las Vegas Real Estate Insider Club in the conference room on the top floor of the Newport Lofts in downtown Las Vegas. Club founder Glenn Plantone welcomed Las Vegas mayor Oscar Goodman as the keynote speaker for this special event. Unfortunately, due to space constraints, event workers had to turn quite a few folks away at the door who had not pre-registered. After indulging several attendees looking for photo opportunities, Mayor Goodman took the floor around 7pm in front of a packed house. The mayor, famous for his career as the high-profile defense attorney for the Las Vegas mob, entertained the crowd with colorful stories of ex-clients and his penchant for the movie business. (If you ever meet Mayor Goodman, be sure to ask him about his requirement that all film producers looking to make a movie in Las Vegas create a part for Oscar in the movie...or they don't get a permit to make the film.) Mayor Goodman also discussed important developments occurring in the downtown Las Vegas area including the construction of the Lou Ruvo memorial brain center which is now underway. This institute, which will be managed by the Cleveland Clinic, will bring world class academic medicine to Las Vegas. Mayor Goodman stressed the importance of bringing academic medicine and superior health facilities to Las Vegas if the city is to continue its growth. The Mayor also touched on another important pre-requisite for a first rate American city: a professional sports team. According to Mayor Goodman, an arena and sports complex is in the works that will hopefully house an NBA basketball team within the next two to three years. Mayor Goodman expressed continued optimism over the possiblility of a realitively quick recovery for the Las Vegas housing market, stressing the assets that will help strengthen the local economy and encourage continued vitality in the market over the next several months and years.

After Mayor Goodman finished addressing the crowd, Glenn gave a short presentation detailing the current state of the Las Vegas housing market. He gave an in depth look at the number of sales in the preceeding five months vs. the number of foreclosures being added to inventory. Since the vast majority of sales closing in the Las Vegas valley continue to be REO or bank owned properties, Glenn pointed out that the number of SFRs currently available is not nearly so important to consider as the number of foreclosures being added to the market as REO listings on a monthly basis. Glenn's observation was that with the number of sales remaining consistently high since June, but the number of foreclosures steadily declining, we are actually facing a shortage situation in the market. There are more people looking to purchase low-priced REO homes than there are homes to sell them. Glenn estimates that the actual standing inventory of SFRs in Las Vegas currently represents only a two to three WEEK supply. This explains why investors and Realtors have faced multiple offer, bid-type situations as they attempt to purchase homes in the past several months. As REO inventory continues to decline, Glenn has found that a shift in direction is now required in order to provide his investor clients with the continued ability to purchase quality investment properties without having the price bid up to levels incompatible with strong cash flow. This shift in direction has led him to the Trustee Sales. By attending Trustee Sales on behalf of his clients, he has been able to successfully purchase properties for his clients at prices substantially below fair market value. If you are interested in purchasing properties utilizing the Trustee Sale, please contact Glenn at (702) 938-8888.

Glenn was followed by a presentation from Tamara Bostrom of Spiral Digital Media. Tamara discussed internet marketing for Web 3.0. As the internet has grown and consumers interaction with the web has increased to multiple events daily, it has become increasingly difficult for professionals to stand out on the web. Tamara discussed the need for Realtors, mortgage brokers, insurance agents and all other professionals to find a "niche" for themselves within this broader marketplace. She also discussed the success Spiral has created for their clients using content driven marketing. Content driven marketing is based around the concept of creating educational material within a client's niche and distributing this content as widely as possible on the web. This helps to establish the client as an expert within his or her field and results in potential customers coming to the client for help, rather than the client having to pursue potential customers. If you are interested in learning how Spiral Digital Marketing can use this unique internet marketing strategy to help generate leads for you, please contact them at (435) 652-9595.

Mike Lathigee closed the meeting by discussing how broader, macro-economic trends can affect local and national real estate markets. Mike's investment group, Alliance, specializes in identifying and acting on these trends that create buying and selling opportunities. Mike then presented a unique opportunity for all REIC club members to attend Investfest 2010 for only $1. This year, Investfest will host the youngest billionaire in Europe as well as many other speakers discussing how to generate wealth in real estate and other markets. If you are interested in attending Investfest 2010 for $1, please contact Glenn at gsplantone@gmail.com

Upcoming Nicaraguan Investment Conference

My friend and colleague, Kevin Fleming recently shared with me a project he is involved with in Nicaragua. I have endorsed some of Kevin's deals in the past and this one looks like it has potential. Costa Rica and Panama have offered great appreciation over the last ten years and it looks like Nicaragua might be the next play in the Central American real estate market. I am including some details below. If you are interested, contact me and I will get you in touch with Kevin.

In celebration of the release of Phase 2 at Seaside Mariana Spa & Golf Resort and the amazing new investment-friendly progress within the country of Nicaragua, Grupo Mariana Family of Resorts is proud to host “Nicaraguan Abundance: Live, Invest and Grow,” December 3-6 at the Intercontinental Hotel in Managua, Nicaragua.

“Nicaraguan Abundance: Live, Invest and Grow” is a three-day business and culture immersion conference tailored for the savvy real estate investor. We will guide you through exactly what you need to know to successfully invest and do business in Nicaragua, allow ample time to network with colleagues, and then be your personal hosts for a day immersed in the sunshine and culture of the New Nicaragua.

You'll meet a select group of real estate professionals already living and working in the Nicaragua…You’ll check out great places to live…You'll get all of your questions answered about investment in Nicaragua…

• You learn about opportunities for the forward thinking investor
• You’ll learn more information about our Joint Venture Offerings
• You’ll find out how you can buy real estate in your IRA, 401 (K) or other
qualified retirement plans
• You’ll learn about title insurance and meet approved Nicaraguan Law Firms
from First American Title Insurance Company and Stewart Title Guarantee.
• You’ll meet members of the Grupo Mariana Development Team
• You'll learn how you can get involved in the country that many are calling
the next Costa Rica.
• You'll learn how you can participate in fascinating business opportunities
available in one of Central America's fastest growing countries.
• You'll discover how you can earn potentially stratospheric returns on
pristine, pure beachfront real estate.
• You'll see how you can enjoy a tropical lifestyle for far less than you'd
spend at home.
• And many other details...

Las Vegas Mayor Oscar Goodman to Speak at October Las Vegas Real Estate Insider Club Meeting

The Las Vegas Real Estate Insider Club is proud to host special guest speaker Mayor Oscar Goodman at their upcoming meeting, held Wednesday October 14th. In order to accommodate the increased number of guests expected to attend, the meeting will be held at a special venue this month… the conference center high atop the Newport Lofts in downtown Las Vegas. The mayor will likely address such topics as the state of the economy, the redevelopment efforts downtown, and the housing market in Las Vegas.
In addition to the presentation from Mayor Goodman, the Club will welcome its usual line up of speakers discussing current Las Vegas housing market conditions, the national economy, foreclosure properties and more. Tamara Bostrom from Spiral Digitial Media will discuss how professionals can use the internet to generate new business in this challenging economic climate.
The Las Vegas Real Estate Insider Club, which normally meets the second Wednesday of each month at Putters Grill on Rainbow at the 215, was founded almost three years ago by full time real estate investor Glenn Plantone. Glenn’s vision was to create a forum for other investors and professionals involved in real estate and related trades to meet and exchange ideas and opportunities as well as have the opportunity to hear timely, educational presentations from local and national real estate experts. Thus far, the Club has enjoyed tremendous success and anticipates welcoming over 150 members and guests to the Newport Lofts downtown for the October meeting featuring Las Vegas Mayor Oscar Goodman. Anyone interested in attending the meeting, can send an email to plantonearticles@gmail.com and request a registration form.

Shrinking Inventory Necessitates New Buying Strategies

The Las Vegas real estate market has endured an amazing roller coaster ride in the last ten years. Homeowners in the Las Vegas valley saw very modest price appreciationthroughout the 90’s and the early part of this decade. In 2003, sales began to pick up and by 2004 Las Vegas was the hottest market in the United States. Prices shot up to astronomical new heights only to come crashing down a few years later. The 2007 and 2008 season saw the Las Vegas real estate market become as cold as ice as both prices and closings plummeted and foreclosures soared. But all things come full circle and since the summer of 2008, the Vegas market has been picking up steam and has in fact enjoyed record sales going into the summer of 2009. In fact, there were more sales in June and July of this year than during any previous month on record...including the heyday back in 2004. The continued bad news, is that after 18 months of price drops the huge gains in appreciation that we saw from 2003 to 2006 have not only been erased, but we have receded to levels of a decade ago. The average median home price in Las Vegas has settled near $130,000. Virtually everyone that purchased in Las Vegas after 1998 is now upside down in their home. It does not make a lot of sense to most Las Vegans as homes are now selling well below builder’s replacement costs.

This drastic decrease in prices has brought droves of investors back into the Las Vegas real estate market. 80% of closings in the last several months have been on REO or post-foreclosure bank owned homes. Cash buyers have been dominating the market and getting great properties for around $40 to $70 per square foot. Unfortunately, the inventory of bank owned homes is now at an all time low of under 2000 units. This represents less than a two week supply of inventory based on the fact that the majority of the 4702 and 4602 closings in June and July were REOs. Even though Las Vegas is the “foreclosure capital of the world”, we are continuing to see foreclosure inventory shrink on a monthly basis. June and July saw nearly 3300 homes per month revert to the banks through foreclosure, but this pales in comparison to the over 3700 REO sales per month that we saw at the same time. This disparity means that we are loosing nearly 400 homes per month from the inventory of bank owned homes.

The low inventory is causing heavy competition for the homes that are available. REOs coming on to the market today are creating bidding wars as investors try to snatch up cash flowing properties at great, low prices. Both owner occupants and investors looking to take advantage of great buying conditions are finding that they are having serious difficulty getting homes under contract. This excess of demand is beginning to drive prices up on bank owned homes.

For months, I have touted the benefits of buying REOs directly from the banks. The process is simply and easy, and, until recently, investors could use this method to acquire great properties at great prices. But those days appear to be coming to a close, at least for the time being. There has been talk for over six months, since the moratorium on foreclosures ended in March of this year, that the banks have a surplus of inventory they are holding back. The problem seems to be that no one knows when or if this rumored inventory will be released. Until or unless that day comes, I am now advocating that investors change their strategy for acquiring properties in Las Vegas. Plan B is to buy homes at the trustee’s sale. After the notice of default (giving a late paying home owner 90 days to cure the late payment) and the notice of sale (giving them another 21 days) a home is sold at the trustees sale. At this sale, the property will either be bought by a third party (you or I) or it goes back to the bank and will eventually become a bank owned, MLS listed REO foreclosure property.

Previously, I have not advocated buying at the trustee sale because there are many restrictions and hassles involved in this method of purchase. Not the lease of which is that properties cannot be financed...cash must be paid at the time of sale. However, with the inventory of REO homes tightening so drastically, I am now finding that trustee sales are offering opportunities to purchase homes at 20-30% below the price that would be paid once the home becomes an REO. Buying at the trustee sale also eliminates the competition of multiple offers. This is where the true investor can now turn to get great wholesale deals. Investors must continue to adapt in order to profit in today's real estate market. I believe trustee sales in Las Vegas are the next step in this evolution.

Anyone interested in getting involved and finding great homes at the best prices with the least amount of competition feel free to get in touch with me for more information.

Will Cash Flow For Cash

Over the last five years I have sold a lot of real estate in many different markets nationwide. In 2003, droves of investors came into the Las Vegas market and purchased single family homes and condos. In 2004, the scene repeated itself in the Phoenix market. In 2005, towns like Albuquerque and Austin saw investors moving in to snatch up large quantities of new construction homes. Finally, in 2006, the Carolinas became hot and certain areas on the Gulf Coast enjoyed profitable buying conditions.

I was on the move throughout this time period, visiting all of these markets and helping my investors find deals there. All the while, I was sitting on the sidelines at home. After 2003, home prices in the Las Vegas valley became too high to cash flow and purchasing here no longer made sense to investors. Of course, that all began to change in the summer of 2008 as the real estate bubble burst abruptly and prices began free-falling throughout much of the West. As home prices plummeted, Las Vegas began to make sense again for investors because the point of cash flow was once again reached. The "point of cash flow" is a simple equation in which the amount of money an investor can make from renting a home exceeds his/her costs of ownership. These costs of ownership include the mortgage, taxes, insurance, repairs, and property management. With a 20% down payment (or in many cases less), positive cash flow can now be achieved in the Las Vegas market for the first time in several years. This is due primarily to the rock bottom prices of the foreclosures that have been flooding the market. Not only has Las Vegas lead the nation in foreclosures for well over a year, but the amount of foreclosures coming on the market now are near triple the amount from just a year ago. Currently, in the Las Vegas valley, nearly one home in 40 is in some stage of the foreclosure process. The median home price has come down approximately $10,000 per month, every month for the last year and a half from a high of near $300,000 to a new median price of only $140,000. These drastic price reductions have created a new buying boom.

Local newspaper articles and analysts talk about a 30% declines in home values here in Las Vegas. But as a full time investor myself and a licensed Realtor, I can tell you the reality is that we are seeing prices that are being discounted 50-70% off of where they were just two years ago. Many of my deals over the last couple of months have been coming in at well below 50% of older, higher values from 2006. I recently sold a one bedroom condo at $31,000 that sold for $148,000 two years ago. That is nearly 20 cents on the dollar! Three bedroom homes, only two years old, that sold new as high as $300,000 are now priced under $120,000. I recently closed on a three bedroom, 1300 square foot home for $75,000. This same home sold for $244,000 just three years ago. Deals like these are typical of what I have been getting for my investors.

These incredible prices open the door for virtually anybody to step back into the Las Vegas market and begin buying once again. Utilizing the government's Housing Recovery Foreclosure Bill, 1st time buyers have a $8000 tax credit to take advantage of and Baby Boomers and retirees looking to relocate to a warmer weather destination do not have to head south of the border as the Southwest has become affordable once again. The vacation capital of the world now makes sense for second home and vacation home buyers, and, of course, investors are delighted to be able to cash flow on their investments in Las Vegas once again. All of these groups will also benefit from price appreciation over the next several years as the market continues its recovery.

The only bad news, as we all know, is that lending guidelines have tightened up considerably over the last year. But, to offset this, prices are ½ of where they were two years ago. If you have a good job, and good credit, it is a great time to be buying a home. Interest rates are at historic lows and now is a great time to lock in a good rate on a 30 year fully amortized note, rates literally have no place to go but up. Current reports show that nearly 85% of closings in this market are being financed through a lender. So it is clearly still possible to get a loan. However, of the nearly 50 deals I have closed this year, only five of them were financed. Nearly 90% of my deals have been all cash. Not only am I getting more deals accepted, but I am getting them at or near list price in most cases and getting them pushed through rapidly. I just had a lender for a bank owned property countact me stating that they were willing to accept our lower than list price offer as long as we could close in 10 days with all cash (as we had stated). They had two other offers on the table for more money but banks do not want to fool around with financing either. They want to take the sure cash sale even if it is at a huge discount. This just goes to show that even though financing is available, cash is still king right now in this market.

June and July of 2009 have seen record sales in Las Vegas with 4702 and 4602 closes in each of the last two months. After 18 months of declines we have seen 3 months of holding steady on pricing. Investors have sensed the bottom has been reached and are coming in droves to pick up homes and condos at the bottom of the market. So, folks, if you have been able to save some money, or if you still have a line of credit open, I suggest you come back into the Las Vegas market and start looking around for some real bargains. The banks are ready to deal and the timing to buy a great foreclosure is as good as it gets.

Feel free to contact Glenn Plantone at 702.938.8888 or email at gsplantone@gmail.com for more information about great low priced foreclosed homes in the Las Vegas market.
You can learn more about real estate investing by visiting our website at http://www.viewpointequity.com

Glenn Plantone Quoted in Las Vegas Sun

I recently had the pleasure of being interviewed for an article written by Brian Wargo for the "In Business" section of the Las Vegas Sun. Following is a reprint of the article which was titled, "Single Family Homes Catch Investors' Eyes - Buyers Focus on Rental Income More Than Appreciation Potential":

Southern California investors have returned to the Las Vegas market in force to look for bargains on single-family homes and helped drive Las Vegas to a record number of sales in June, housing industry experts said.

The number of investors buying new and existing homes in Las Vegas rose 35 percent when June numbers are compared with June 2008, according to San Diego-based DataQuick.

The demand for investors buying existing homes has helped that segment of the market fare the best when it comes to real estate investing over the past year and kept housing prices stable between April and June, analysts said.

“Real estate has always been a good investment, and right now it has never been better from a residential standpoint,” said Steve Bottfeld, executive vice president of Marketing Solutions. “I just wouldn’t invest in commercial (real estate) because it is about to go through what residential already has.”

DataQuick reported that investors made up 37.5 percent of the buyers of both new and existing homes in June. That’s the second highest June this decade when it comes to investor-purchased homes, next to the 39.4 percent in June 2004. It’s also the highest percentage of investors as buyers since it was 37.6 percent in February 2006, said DataQuick spokesman Andrew LePage.

The influx of investors into the market is evident since it hit a low of 25.3 percent in September 2008 in the aftermath of the housing boom. In June 2008, investors comprised 27.8 percent of the sales, below the 30.3 percent average for Las Vegas between January 2000 and June 2009, LePage said.

No one should confuse this class of investors in residential real estate with those during the boom that bought and flipped houses, Bottfeld said. These investors are looking to hold long term and earn money off rental income, he said.

It makes sense because if someone can buy a home for $100,000 in cash and rent it for $1,000 a month, that equates to a 12 percent return before taxes and other expenses are included, Bottfeld said. Even getting an 8 percent return is better than the 2 percent they might get at their bank, he added.

Glenn Plantone, a Realtor and president of the Real Estate Insiders Club in Las Vegas, said investors are taking advantage of a steep drop in prices since they peaked in 2006. In some cases, prices of homes in the northwest fell 70 percent.

Homes that sold for about $300,000 are going for about $110,000 he said.

“They are buying them for cash flow,” Plantone said. “We are not even talking about appreciation potential.”

The market to rent homes remains strong because people understand the value compared to renting an apartment, Plantone said. And for those homeowners who lost their home to foreclosure, they want to stay in a home.

“It is a lot easier to rent houses than condos,” Plantone said. “We are getting people who are walking away from a $2,000 a month home payment and going across the street to rent a home for $1,200 in immaculate shape.”

Despite the interest in Las Vegas, it is not as strong as Phoenix where 39.6 percent of sales were bought by investors, LePage said.

Most of the investor buyers that Plantone said he has dealt with are Southern Californians. Many are small businessmen who have several hundred thousand dollars to invest and have been waiting for an opportunity in real estate.

Plantone said these buyers are savvy because none of his investors has bought a property for more than $121,000. They are looking for homes built in 2003 and later.

Robyn Yates, the broker-owner of Windermere Prestige Properties said not only are investors coming from Southern California but there has also been a lot of interest from foreign buyers, especially in Asia. Some are even buying homes without seeing them in person, she said.

Many investors have been hurt by the decline in the stock market and liquidated some of those assets or took out money from their 401k despite having to pay a penalty, she said. In some cases, there are a group of five people pooling cash to buy 10 homes, but most are individual investors, she said.

“Some of them were just holding onto cash until the opportunity was right,” Yates said. “I think they are going to be around for another couple of years.”

As long as homes can be bought much cheaper than builders can construct them, there will be a market for investors in Las Vegas, Yates said.

Plantone said that many of these buyers will leave the market when prices go up $20,000 to $30,000 because their investments won’t pencil out for rental income as they will now.

“That’s why investors have been so aggressive,” Plantone said. “I am telling people they may not see a better time to buy since the Great Depression.”

Investors are winning out over frustrated first-time buyers for the properties because they are offering more than the list price and because they have the advantage of offering cash, Plantone said. It was only three months ago that buyers could get properties below list price, he said.

Any investors who bought in 2007 or early 2008 wouldn’t have had any luck with appreciation, although buying single-family homes fared the best out of all real estate investment categories over the past year, according to Larry Murphy, president of SalesTraq, a Las Vegas housing research firm.

“The single-family home has always been the preferred house of choice with most people,” Murphy said. “Most people want the picket fence and the back yard and not being attached to someone.”

Between the first six months of 2008 and first six months of 2009, the median price of single-family homes fell 34 percent, Murphy said.

The best performer on price appreciation when it comes to planned communities was Silverstone Ranch in the northwest valley. The Pulte Homes community had a median price of $226,000 in 2008 and that fell 19 percent to $182,500 through the second quarter this year, Murphy said.

Homes performed better than an acre of undeveloped land, whose median price fell 42 percent over that timeframe, he said.

Third on the list were mid-rise condominiums, which fell 49 percent in the past year They were barely ahead of high-rise condos whose values fell 50 percent and other condos and town homes which fell 51 percent, Murphy said.

The worst investment over the past year was apartment conversions with values falling by 56 percent, Murphy said.

The worst of the that segment was the Meridian at Hughes Center on Flamingo Road, east of the Strip that was converted from apartments to condominiums between 2005 and 2007, Murphy said.

The property, which had a failed attempt at trying to convert into a condo-hotel because of Clark County regulations, sold for $604 per square foot when it first entered the market. The average price was $539,000, Murphy said.

Through June, the average resale price has fallen to $87,611 or $121 a square foot, Murphy said. With that drop in price has come rising foreclosures. Murphy reports that 201 of the 680 units or 30 percent have been foreclosed upon, and that number is likely to rise. The foreclosures have been running as high as 25 a month so far in 2009, he said.

Murphy said he’s not surprised apartment conversions have fared the worst because in essence some are 20-year-old buildings that have a new granite countertop.

There was a strong demand for condo conversions during the housing boom because they were the only units available that could be bought for $200,000 or less. With homes more affordable today, that softens the demand for conversions, he said.

Land came in second after single-family homes because despite the meltdown in the market, it remains a precious commodity, Bottfeld said. Even though Las Vegas is overbuilt, there is a limited supply of land because of restrictions by the federal government, he said.

There is not as much movement on buying high-rise condominiums because the inventory is limited and banks have been reluctant to put that inventory on the market at bargain prices, Plantone said.

The high-rise condominium market that has fared poorly is condo-hotels in which buyers put the room in the daily hotel rental pool. Demand for hotel rooms has been weak in the economy and hotels only return about $30 for every $100 in rental income, Plantone said.

Update on MGM Signature Towers

The last time I reported on the MGM Signature Towers was in late April when new low comps were established for both Studio and 1 Bedroom units at the close of the MGM auction. I wanted to take a moment to update my readers as prices continue to drop on these properties here in Las Vegas.
I have been following the MGM Signature Towers project since its inception in 2003 and 2004 and have stayed as far away as possible until recently as purchasing made no sense from a cash flow perspective. But as you know, things change quickly in Las Vegas and this investment is beginning to look a lot more lucrative. I will explain.
If you are unfamiliar with the hotel condo concept, it is quite simply explained as follows: You the investor buy and own the actual condo with all of its luxury furnishings, and the condo is put into a rental program and managed by a
management company (in this case as part of the MGM Hotel and Casino). There are a lot of calculations that lead to how much revenue owners will make (or not make) from their condo hotel but a reasonably accurate estimate in the case of the Signature Towers would call for the owner to end up with about 40% of the gross revenues from the rental of the room. In simple math, if a condo hotel room is rented for $100 per night, the owner will net about $40. Of course there are some perks to ownership of the unit as the owner can use it themselves (with a reservation) or the room does not have to be in the rental program at all. If someone wished to live in their luxury condo unit they could choose to do so. The home owner’s association fees are quite high, at near $400 for the studio unit and $900 for the one bedroom unit. These fees pay for the luxury resort amenities which are separate from, yet still attached to, the MGM Hotel. The Signature Towers resort features two exercise rooms, valet parking, guest services, coffee shop, lounge, deli, several pools, high speed internet service throughout and a gift shop.
The hotel condo project was sold in three stages with tower 1 (145 East Harmon) completed in 2005. This building is closest to the MGM hotel and was the first building of the three to be finished. Units in this building sold for between
$300,000-$600,000 for the smaller studio units (520 square feet) and $500,000 - $1,000,000 for the 1 bedroom units. The second tower was the 135 East Harmon tower which was completed in 2006. Studio units sold for a little higher, in the
$400,000 to $700,000 range, and 1 bedroom units remained the same at $500,000 to $1,000,000. The last tower to be built, 125 East Harmon, sold for even higher prices. It was completed in 2006 with studio units selling for $500,000 to
$800,000 and 1 bedroom units fetching prices from $700,000 to over $1 million.
Note that because tower one was sold at lower prices there have been less foreclosures coming on the market from this tower (145). As investors grossly overpaid for units in all buildings, but especially buildings two and three, we are
now seeing a high rate of foreclosures begin to hit the market. I believe that as early investors begin to see how far upside down they are we may see even more people letting their units go as their equity or perceived equity is non-existent.
Over the last year there have been 92 re-sales as a combined total from all three buildings. As of April 2009 the lowest priced 1 bedroom unit had sold for $274,000 and the lowest priced studio unit had sold for $174,000. This was, of course, well below the original sales prices of just a few years earlier. Then in late April of this year, an auction took place at the MGM and 20 units were sold off in about 2 hours time. I reported on this auction in my blog as a new low of $202,000 for one bedrooms and $160,000 for studios were established.
It was about this time that I stepped in and began to educate my database of investors about these units as I could see that the prices were beginning to move closer to the point where they could hit bottom and actually begin to make
sense as an investment for those looking to keep them in the rental program.
When looking at units from these high rise towers, each investor will want to be concerned with the price of the unit, its “rentability” potential, the profitability of the investment, and the future appreciation potential of the property.
I have identified 7 items that have a direct effect on these factors. These 7 items include the following:

1. Odd/Even address numbers: Odd = strip side views and Even = mountain views.
2. One bedroom unit (874 or 847 sq. ft) or studio unit (520 square feet)?
3. Handicapped unit or regular unit?
4. Does the unit have a balcony or not?
5. Is the unit located on a high floor or a low floor?
6. How is the View (strip/mountain/airport/pool)?
7. Is it a penthouse floor (29 to 33)? (Comes with a higher ceiling.)

Since April I have been working with several investors and fighting to get the lowest price possible for them on the units they are looking to take down. All this hard work paid o this past Friday the 17th as one of my investors closed on a lower oor studio unit at only $99,000. This new low blew away the previous low comp of $140,000 for a studio from only a couple of months back.
The very next day, Saturday July 18th, I attended the second auction for the MGM Signature Towers with cashiers check in hand ready to pounce on a 1 bedroom unit for another client. And as I predicted, a new low was achieved when the 1 bedroom sold at auction for $180,000 ($22,000 less than the previous low). The unit was in tower 1 ( first building), 7th floor, with a balcony and a nice pool view on the mountain side (even number). The unit sold originally for $540,000 and made for a nice deal at 33 cents on the dollar from the original high. This lower comp should help motivate the banks to continue pushing prices down into a range that will produce more investors traffic as people look to scarf up these luxurious condo hotels.
As of this writing, there are 155 units listed for sale in the entire MGM Signature Towers project. There are only 22 that are REO/bank owned foreclosures and 68 short sales. The remaining 65 units listed for sale are upside down owners who will not be able to resell their units at their asking prices for many, many years.
Anyone seriously interested in taking down a unit at today’s new lower prices should contact me as soon as possible as inventory is very light at this time. I am not sure how low the prices will go but I truly believe a studio at $100k and a one bedroom unit at $150k are very good deals.
This Friday the 24th of July there will be a third (silent) auction that will be taking place on 10 units at the MGM Signature Towers. You must be registered in advance in order to bid online. The highest bidder’s o er will be presented to the bank. If the bank accepts the bid, you will get the condo at your winning bid price. If the minimum (unpublished reserve bid) is not met, the deal will be renegotiated or you can walk away. There is no earnest money required for the silent auction. Call or email me for details to register.

False Bottoms - Or When the Tail Wags the Dog

For the last 18 months real estate investors, market analysts and other experts have speculated as to when the long awaited bottom for the beleaguered real estate market would finally arrive. Rather than offering guesses as to how long the down market would last, I have tried to focus on identifying the signs of a bottom approaching, so that myself and my investors would be able to identify this buying opportunity as it arrived.

If you have followed my articles and blog posts, you have noted that I consistently advocate using a three step process to identify the coming of the real estate market “bottom” and the possible beginnings of a recovery. This process involves analyzing three sets of variables: First, the standing inventory of homes for sale; second, the volume of existing home sales; and third, the median home price for a particular area. A few weeks ago, I confidently announced the arrival of the real estate market “bottom” in my local area: Las Vegas. I cited as evidence for this claim data from each of the three areas listed above.

First, the inventory of available single family homes in Las Vegas has decreased rapidly in the last few months after remaining relatively stable at around 22,000 homes through much of 2008. This inventory is now at a level of just under 12,000 homes. Inventory is nearly ½ of its 2008 levels. Homes under $200,000 have less than 4 months standing inventory. Homes under $100,000 have less than 3 months inventory. A normal healthy inventory is considered a 6 month supply of homes. This decrease in standing inventory was our first indicator that the Las Vegas real estate market was bottoming.

Second, the volume of existing home sales has exploded in Las Vegas in the last few months. In fact, sales of residential homes reached record highs in June. According to data published by the Greater Las Vegas Association of Realtors, sales of single-family homes and condos rose 87 percent in June from a year ago…to a total of 4,702 sales. This total breaks the previous record high set in June of 2004, during the peak of the housing bubble.

Finally, we must also consider median home prices, which after falling for over a year and a half in the Las Vegas valley have finally stabilized near $140K in the last three months.

I used all of this data to arrive at the conclusion that we have hit bottom in Las Vegas (and many other areas of the country as well.) And I stand by that assertion. However, unfortunately for many American home owners, we are beginning to witness the fact that real estate markets may create bubbles, but they don’t operate within them.

Two years ago, home prices cooled across the United States and as the real estate bubble began to burst it triggered the freezing of the credit markets, which in turn brought on the greatest recession this country has seen since the Great Depression. Since then, the general economic downturn has rolled on independently of the struggling housing markets. It has grown to encompass the stock market, the job market, the banking industry, and all other major economic areas. All the while, there has been no doubt that the catalyst which provoked this whole mess was the rapid decline of housing prices, accelerating foreclosures, bad loans and the accompanying problems surrounding the burst of the real estate bubble. Unfortunately, the cause cannot now bring the remedy.

In fact, the general economic malaise now threatens, in fact almost promises, to thwart the recovery of the housing market. Economists warn that rising unemployment rates will bring a fresh round of foreclosures as home owners, even those not burdened by questionable loans or upside down property values, lose the ability to stay in their homes. Also, to spite consistently low interest rates and government incentive programs for new home buyers, banks still seem reluctant to loan money. Instead of thawing, credit markets continue to tighten in many areas as banks raise rates and cut limits on unsecured credit lines and charge cards…even to good customers with perfect payment records.

These factors conspire to throw a bucket of cold water on the hot housing market that we are now observing. As the economy continues to decline, I would not be surprised to see our newly found real estate bottom begin to give way once again. Although I do not think that we will see declines that come anywhere close to the plummeting prices of a year ago, I do believe that rising unemployment and the continuing credit crunch may prompt home prices to begin another, more gradual, downward slide.

This doesn’t mean that the current market is not still a great time for investors to begin loading up on properties. Cash flow is always king when it comes to real estate investments, and the cash flow opportunities in Las Vegas and across the country are more promising than they have been in decades. But, as always, investors should proceed with caution and look to purchase for the long term. Naked appreciation plays are risky under the best of conditions, and they have no place what-so-ever in a volatile market such as this.

New Law Makes Foreclosure Process a Little Less Painful for Las Vegas Renters

In February of this year, I wrote an article addressing the plight of renters in the Las Vegas valley. The Las Vegas Sun had run an article detailing how many renters were facing the need to immediately vacate their homes, which had gone into foreclosure without their knowledge. (Click here to read my article http://vegasforeclosures.blogspot.com/2009/02/foreclosure-crisis-hits-renters-hard.html) In most cases, the renters had no idea that the owners of the property were in trouble until the Sheriff arrived on their doorstep to serve eviction papers.
A new law, passed May 20th and entitled the “Helping Families Save Their Homes Act of 2009”, provides safeguards for renters in the event that an owner allows a property to enter foreclosure. This protection comes in two forms. First, if the renters have a lease, the new owners of the property must honor the lease, allowing renters to stay in the property until the end of the term provided they remain in good standing. The only case in which this statute does not apply is in states where state law allows leases to be terminated at any time upon notice. Even in that case, the new owner of the property must intend to occupy the property as a primary residence in order to evict the tenants before the end of the lease. The second safeguard extends to renters who are on a month-to-month agreement. In this case, the new owner of the property (whether it be a bank or a private individual) must provide 90 days written notice to the tenants in order for them to vacate the property.
Many states already have laws protecting tenants in the case of foreclosure. In those states, the new Federal law will still supercede the state law, unless the protection afforded to the tenants under the state law is greater.
Of course there are conditions that must be met in order for the Helping Families Act to apply. The most notable are: 1. The tenants must have a written contract to rent or lease the property 2. The lease must be a result of an “arms length transaction.” 3. The rent must not be substantially less than current fair market rent for the property.
All things considered, I believe that this law represents a fair and equitable solution to the unfair situation in which many renters have found themselves since the foreclosure boom began.
If you are a renter, and you want to know if your landlords are current on their mortgage, you can often find that information on the County Assessor’s website. In the case of Las Vegas residents, the site would be www.accessclarkcounty.com/assessor. Once you are on the site, click on “record searches” then “addresses.” You will need to enter the full property address as requested. Once you have done this, you will receive a parcel number. Jot this parcel number down and then visit this site: www.accessclarkcounty.com/depts/recorder. Click on “search records” and then click on the “advanced search” tab. You will need to enter the parcel number (without any dashes) and hit “search.” The search will show you the name of the registered owner of the property and whether or not there are any documents filed against the property, such as a notice of default or a notice of sale.

Richard Lee Visits Las Vegas Real Estate Insider Club

The Las Vegas Real Estate Insider Club was pleased to host Richard Lee at our last meeting June 12th. Formally, Lee is Vice President, Public Relations Director, and a real estate consultant for First American Title Company of Nevada. But since 1989, Lee has also been the “go-to guy” for the Las Vegas community when it comes to development and growth. Developers, business owners, real estate investors and gaming companies rely on his insight for investment, lending and acquisitions. Simply put, Richard reduces a tidal wave of information into entrepreneurial opportunities.
At the meeting Richard spoke to the club on a wide variety of topics relating to real estate, the Las Vegas market in particular and the economy as a whole. He presented background information about what created this current economic crisis including insight into the sub-prime market, how notes are bought, debt is defused and property redistributed. And, although we may definitely be nearing the “bottom” of the real estate slide in Las Vegas, Richard explained how a factor called “Appraisal Drift” or “BPO Drift” may cause a continued downward slide in pricing of 1-2% over the next 12 months.
Richard offered his opinion, however, that Las Vegas is still a great place to purchase investment properties. He believes that jobs drive everything in local real estate economies by creating stability and growth. With sun, entertainment, great food and (now) housing prices below the curve, the outlook for the Las Vegas economy is strengthening. He also mentioned the fact that California may eventually approach a 60% total tax rate and, as a result, Las Vegas will continue to see population growth from those moving in from the west coast as well as baby boomers leaving other parts of the country.
Richard Lee also discussed an interesting phenomenon that is currently developing in Las Vegas real estate. As investors recognize the great buying opportunities that exist and rush to purchase properties at new, low prices…a certain “auction mentality” has begun to develop. Potential purchasers are finding themselves in multiple offer situations with properties selling above asking price. Those feeling that they have to get in now to avoid missing the boat are creating a dangerous over-bidding situation that could result in a second real estate bubble of sorts for the Las Vegas Valley.

The Las Vegas Real Estate Market Bottom is Here!!!

The moment we have all been waiting for…for the past two years… has finally arrived! You will not hear about this on the national news…yet…because the news sources are always well behind when reporting trends. You will hear it from me: a full time investor and “on the street” veteran agent that is seeing firsthand a dramatic change in the face of Las Vegas real estate.
I am here to announce that the bottom of the Las Vegas housing market is here. Let me explain why I believe this to be the case, and why now may be the best time since the great depression to be buying up real estate, especially in the Las Vegas market.

In late 2006 and early 2007 the Las Vegas real estate market hit its all time median price high of around $320,000. Shortly thereafter, the now infamous “credit crunch” began in late summer 2007 and the entire economy, especially the housing industry, has been reeling backwards ever since. Over the last 18 months, the median home price in the Las Vegas valley has dropped an average of $10,000 per month…settling in at around $125,000. Prices have literally plummeted by as much as 75% in some segments of the Las Vegas market. And guess what? The free fall is over. They are not going to go down anymore.

I understand that this is a bold claim. But there are several factors that you must evaluate when trying to determine the bottom of a housing market. I have quoted these factors several times over the last two years, and have always maintained that they did not all line up…until now. The factors are: 1. The inventory of homes listed on the local Multiple Listing Service (MLS). 2. The number of homes being sold in the marketplace. 3. The average median price of homes. Once the inventory stops increasing, the volume begins trending upward and the median price stabilizes… you have found the true bottom of the market.

Looking first at number 1: The inventory of available single family homes in Las Vegas remained relatively stable at about 22,000 homes through much of 2008. This inventory is now at a level of just under 12,000 homes listed on the market ready for sale. Inventory is nearly ½ of its 2008 levels. Homes under $200,000 now have less than 4 months standing inventory. Homes under $100,000 have less than 3 months inventory. A normal healthy inventory is considered a 6 month supply of homes. The inventory of available homes is getting scarily low as realtors are worried about what to sell if they do not get some fresh foreclosure inventory.

Foreclosures reached an all time high in March of 2009 with over 7700 new foreclosures announced in Clark County. A large factor in this number being so high was the moratorium announced by the Obama administration that ended in the first quarter of the year. In contrast, April 2009 totals are showing only 1289 homes were foreclosed on in Clark County. This is the smallest amount of foreclosures for the Las Vegas area in the last 16 months. As foreclosures dry up, this will continue to contribute to the huge decrease in standing inventory that we are now observing.

Moving on to #2: With each passing month since early 2008, sales volume has picked up in Las Vegas. There were over 4000 sales in the Las Vegas market in April of 2009. Because of the lower prices more people can afford to buy…and they are buying. More investors are entering the market as properties have not cash flowed like this in over 10 years, and home prices are now at 1998 levels. It does not take a brain surgeon to figure out that if you have 1300 new listings (new foreclosures), and you sold 4000 homes, your inventory is shrinking dramatically on a monthly basis.

The final factor to consider is median home price. The median home price in Las Vegas has dropped a TOTAL of $10,000 over the last three months…as opposed to $10,000 PER month…which had previously been the steady rate of decline for the last year and a half.

Inventory is getting smaller, prices have dropped to very affordable levels and appear to be leveling off, and sales are getting busier each and every month. The sheer numbers of foreclosures are finally decreasing from their highs also. All of this data helps to paint a clear picture of what is happening in the Las Vegas real estate market. But let me also share with you some non scientific observations that we can add to the equation.

As a full time investor and a licensed realtor I am getting shut out of properties left and right. Most properties both low end (under $150,000) and higher end ($300,000 and up) are receiving multiple offers and are now selling for prices above the list price. I am amazed at the amount of traffic I am coming across when I go out to look at properties. Some homes are getting 15-20 offers in the first couple of days after listing. More than 90% of all my purchases this year have been cash deals and I am still getting rejections in some cases even when we are coming in with full price cash offers.

Well, my friends, the cat is now out of the bag. Everyone now knows that Las Vegas real estate is cheap. Homes are well below replacement costs as the average foreclosed home is selling for around $78 a square foot. I just closed this week on a 2221 square foot home for $117,000 or $52 a square foot. It took nearly a month to negotiate this one down. Homes and condos are 50-75% off their highs and people are buying everything in sight. The good old days are back again. And, for the record, even if I am off slightly in my evaluation and we drop another 10% or so, it is still the best time to be buying real estate in Las Vegas. We have historically low interest rates of around 5%, great government incentives, especially for first time buyers with the $8,000 chameleon-like tax credit, and new lower comparable sales to justify banks accepting your lowball offers.

So if we have hit the bottom…as I suggest…how long will we be here? Will the market spike up or slowly trudge along the bottom until the economy as a whole begins to recover? I will explore those thoughts in more detail in my next article.