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...