Team Plantone Offering Chase Foreclosures to Investor Buyers

On Friday, November 18th, Chase delivered to Team Plantone a list of 35 foreclosure properties in Las Vegas, NV that need to be liquidated immediately. Originally these properties were to be listed and sold only to owner occupants, but due to the current credit crunch and the difficulty many primary buyers are having obtaining financing for their purchases, Chase has decided to open up the list to investor buyers as well. The catch is that potential investors must move very quickly. All offers must be in place for this package by Wednesday, November 23rd.

There is no bidding on these properties. The price is the price. Interested investors simply look over the list and if a property they want is still available...it is theirs. It is that simple. This type of REO / foreclosure liquidation is extremely advantageous to the investor buyer because the investor is able to avoid the bidding wars and resulting price increases that plague cash buyers looking to purchase REOs through traditional listings in the extremely popular Las Vegas real estate market.

There are some great spreads in this lists for buy and hold investors. There is also a 2% commission available to any licensed buyers’ agents. Chase is only accepting cash offers.

If you are interested in viewing a list of the available properties, please contact Glenn Plantone immediately.

Glenn Closes 15 Property Bulk SFR Deal

Glenn Plantone of Nevada New Builds LLC in Las Vegas recently completed a bulk sale of 15 new construction homes to a private, out of state investor. The transaction, which closed on November 1st, 2001, represents one of the largest single transactions of single family homes in the Las Vegas valley this year. The transaction was an all cash deal that closed in 7 days.

The bulk package consisted exclusively of new construction foreclosures located in the Providence neighborhood of northwest Las Vegas. Most homes were 4 bedroom and averaged around 2300 square feet. The entire purchase closed for under $2M. The buyer plans on holding the homes long term and generating cash flow through renting, lease optioning and (possibly) offering owner carry programs.

This most recent deal is typical of the types of packages that Plantone and his team construct for their clients. Team Plantone specializes in acquiring distressed properties through short sales, builder closeouts, REO packages, and Trustees’ sales. The team then renovates the properties, clears any liens on the property, and adds great extras like ceiling fans, landscaping, upgraded fixtures and appliances. Plantone and his team then place long term tenants in the properties to create a turn-key investment. Because the properties have been acquired so far below market value, they can be resold to Plantone’s investor clients with CAP rates of 10% or more after all expenses.

Plantone and his team of seven professionals tailor their services to investors looking to purchase income property in Las Vegas. Team Plantone represents buyers that purchase more homes in Las Vegas than any other group. This includes teams that employ as many as 30 people or more. “We focus on our clients needs first,” Glenn said, “I have been a real estate investor for over 10 years, so I understand what investors are looking for...strong cash flow, good appreciation potential and security. We’ve been seeing a lot of money lately moving from the stock market into real estate. Buyers realize that we are seeing historically low prices and interest rates and that now is the time to buy.”

Many of Team Plantone’s clients are from Canada and China as the rest of the world rushes to capitalize on this buying opportunity. Like many other analysts, Glenn agrees that it may take Las Vegas another 5-7 years to recover from the current housing crisis and that investors will probably not realize significant appreciation until that happens. He still feels, however, that now is an excellent time to buy. “Cash flow is the key factor to examine when determining whether or not an investment is solid. We are currently seeing cash flow rates that haven’t existed in Las Vegas in five decades.”

If you would like more information on the Las Vegas real estate market or bulk investment packages, please contact Glenn directly.

Finally...Loans for Canadian Investors Looking to Purchase U.S. Real Estate

Over the last three years I have sold dozens of properties to foreign nationals looking to invest in Las Vegas real estate. Las Vegas has led the nation in foreclosures for the last three years running and has seen properties lose 50-80% of their value. Rents, on the other hand, have declined only a fraction of that percentage and, as a result, Las Vegas investment properties are cash flowing at a rate we haven’t seen in decades. Many foreign nationals, especially Canadians, who are familiar with Las Vegas as a vacation destination, are now looking to Las Vegas as an investment destination as well.

The only downside, for some Canadians, to investing in Las Vegas foreclosures has been the inability to use financing to leverage their investment. All of my Canadian buyers have had to pay cash for their investments because reliable financing for foreign nationals was simply not available through U.S. financial institutions. Until now.

I am excited to announce that Team Plantone has recently established a relationship with an established lending institution here in Las Vegas that has developed a loan product for Canadians looking to purchase 2nd homes in the U.S. and a separate loan product for foreign nationals looking to purchase investment property.

The second home purchase program especially for Canadians will fund 65% loan to value on single family residences with a minimum loan amount of $75,000. A Candadian credit report with a minimum score of 680 is required along with income and asset documentation. Competitive fixed rates are available on 30 year terms.

The foregin national investment property product will fund up to 60% loan to value on residential properties with 1-4 units. There is no minimum loan amount and no proof of income or credit score required. Loans are amortized over 40 years and 3 and 5 year terms are available with rates starting at 8%. Even more encouraging is that the financial institution is able to order their own appraisal.

If you are a foreign investor interested in learning more about these programs or about investing in Las Vegas real estate, please contact Glenn Plantone for more information.

Glenn Opens Up Fixed Interest Program to Smaller Investments

For the last two years, we have been successfully flipping homes in Las Vegas using our proven formula. We purchase distressed properties well below current market value via short sales, the trustees’ auction and bank-owned REOs. We then rehab these properties to better-than-new condition and place quality, long term renters and lease option tenants in the properties and sell them to investors looking for turn-key real estate investments with solid cash flow and strong appreciation potential. Last year we flipped over 25 of these properties and this year we have already more than doubled that effort.

In order to fund our acquisition and rehabilitation costs, we have brought in private investors who have put up the funds for one or more properties at a time. We offer these investors a guaranteed 10% return on their money. Not only are the investments secured by a first position lien on the property, but we also guarantee the 10% return regardless of the success of the flip. During the last two years we have never missed a payment to an investor! (We have detailed documentation on each and every flip we have completed and are happy to provide this information to prospective investors upon request. We also have references available from current investors.)

Over the last couple of years, many investors have approached me looking to get involved in our projects and take advantage of these phenomenal (and secure) returns. Unfortunately, I have had to turn potential investors away if they didn’t have at least $100,000 available to commit to the project. The way our deals were structured, we weren’t able to allow investors to fund only a portion of an acquisition, we had to have one investor per property.

We are thrilled to announce that this has now changed. We have recently restructured our operating agreement in order to create an opportunity for investors to get involved with as little as $20,000. Our new investors will still receive a guaranteed 10% return on their investment and their investment will be backed by the real estate itself. Payments will be made quarterly and investors may exit the program at any time with 90 days notice.

If you are interested in learning more about how to make more than 5 times the current savings rate of return, please contact Glenn for more information.

Bank of America Agrees to Allow Buyer Substitutions on Approved Short Sales

Bank of America announced recently that it will now allow agents to substitute buyers into approved short sales in cases where the original offer falls through. This news was greeted with enthusiasm from real estate agents, investors and potential home buyers. Many real estate professionals view it as a much needed and long awaited step forward in helping to boost the success rate of the short sale process.

The biggest hurdle facing short sales is the long timeline associated with obtaining bank approval. (Short sales typically take between 60-90 days to be approved.) Because of the uncertainty and lengthy waits involved in purchasing a short sale property, many potential home buyers submit multiple offers and/or continue looking while the short sale negotiation is in process. Many times, if a successful agreement is reached with the bank, the potential buyer has long since moved on to another property.

This is what makes Bank of America’s new policy so helpful. According to their new guidelines, Bank of America will allow the listing agent on the short sale property to substitute a different buyer at the agreed upon price without reapplying for approval from B of A. While this is certainly not a silver bullet, it is a tremendous improvement to the short sale process and one that we hope other major banks will adopt as well.

Las Vegas has seen the highest percentage of foreclosures and short sales in the nation. Over the past three years, we have consistently purchased distressed properties through short sale offers and placed them in our rehabilitation program. As part of this program, we completely renovate the homes to move-in ready condition, place a quality, long term tenant in the property, and then resell the home to one of our investor clients looking for a turn-key buy and hold investment with strong cash flow and upside appreciation potential. We have had tremendous success with this win-win scenario. Our investors are averaging returns between 8-10% for cash purchases and 12-24% for financed deals. We are also providing quality rental housing for the large percentage of Las Vegans who find themselves unable to purchase a home at this time.

If you are interested in taking a closer look at the strong returns that are currently available in the Las Vegas real estate market, please contact me. I am currently offering complimentary two night stays at the MGM Signature for qualified out of town investors. Call me for details.

Glenn Plantone
Wynn Realty
(702) 656-3264 xt: 203
gsplantone@gmail.com

An Open Letter to Appraisers In the Las Vegas Real Estate Market

For the last three years, my team and I have purchased, renovated and resold over 100 properties in the Northwest Las Vegas area. Currently, our greatest challenge lies not in construction headaches, buying competition or even the scarcity of financing but in obtaining fair appraisals for our renovated homes that are re-entering the market.

Our business model consists of purchasing homes at a discount (REOs, trustees’ sales, and short sales), fixing them up, and selling them at today's retail value. Our properties sell at the top of the market because of the quality that we put into them. Most of our homes are literally better than new construction. We only rehab houses that are 10 years old or newer, and then we put in lots of upgrades that builders do not: landscaping, ceiling fans, blinds, upgraded flooring and fixtures, complete appliance packages (often including washer and dryer.) Of course, we also include new carpet, new (non-white) paint, and the like.

Even though our properties are generally better than any other homes available in the neighborhood, we still generally price them below the highest recent comp for the area. This is because we know that because our property is a flip (being resold within 90 days of our purchase) it is going to be more closely scrutinized by the lending bank and will often require two appraisals.

Our request to you, the appraiser, is simply that you compare apples to apples when drawing up your appraisal. As you know, most distressed properties (REOs and short sales) are in very poor condition. Our homes are not distressed and as such they sell for a price higher than trustees’ sale purchases, REOs, and short sales. When you are looking at comparable sales in the area, we would ask that you compare non-distressed sales and not use REOs and short sales in your comps, just as you would not use trustees’ sale data. We understand that non-distressed homes are the minority at the moment and that REOs and short sales make up as much as 75% of the resale market at this time. However, there are sufficient examples of non-distressed sales in the area to paint an accurate picture of comparable value.

According to Larry Murphy (of Las Vegas Crystal Ball and SalesTraq) certain types of homes are currently selling for certain dollar amounts per square foot in the Las Vegas marketplace. As of June 2011, Murphy released figures based on his exhaustive database of recent sales that shows that trustees’ sale homes are currently selling for around $65 per square foot, bank owned foreclosures (REO’s) for about $71 per square foot, short sales for around $80 per square foot, non-distressed properties at $88 per square foot, and new construction at $100 per square foot.

We appreciate your efforts to use the right types of homes in your market research during this challenging period in the real estate market.
Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com

If you’d like to see more of Glenn’s articles, follow his blog at:
www.vegasforeclosures.blogspot.com

Double Dip? Probably, But That Shouldn’t Scare Real Estate Investors Away

As a full time real estate investor, with a portfolio of over 20 properties in several states, as well as a licensed Realtor, I have made my living by following the trends and helping my investor clients to do the same. For the last four years, those trends have kept me here in Las Vegas, NV...the foreclosure capital of the United States. I have risen to become the 4th busiest buyers’ agent in all of Las Vegas for two of the last three quarters, selling almost exclusively to investors who have come rely on my advice and ability to find strong, cash-flowing, turn-key investment properties for them.

Many of my clients have been asking me if Las Vegas home prices are heading for a “double dip” as the recession continues to drag on. I don’t know if I would call it a “double dip” since I definitely don’t predict that home prices will experience any further drastic declines in the Las Vegas market. I do, however, believe that home prices will continue to trickle downward until the economy as a whole begins to really improve.

So, in light of this prediction, what advice am I giving investors now? BUY, BUY, BUY! I can’t say it strongly enough that now is the time to buy investment property in Las Vegas. Why? Three major factors:

1. After losing between 50% and 70% of their peak value, average property values in Las Vegas have continued to decline over the last year at the rate of approximately 1% per month. To put this number in perspective, it means that a home that was worth $115,000 in May of this year will have been lowered in value to about $112,000 as of today. These decreases might scare away the average investor, but it is important to note that the key factor when decided where to invest should be CASH FLOW. If a property has a strong rate of annual return at the price you are currently purchasing it, then it can be a very good investment even if prices dip slightly over time before they inevitably recover. Because home prices have plummeted much lower than rents over the last several years (home prices falling around 70% and rents only 15%), cash flow in Las Vegas is stronger than we have seen it in the last five decades. We are currently achieving 8-10% CAP rates for our cash buyers and over 15% for our financed buyers.

2. Interest rates are currently at lows that we are unlikely to see again in our lifetimes. Once the economy begins to recover, interest rates will be the first things to change...and quickly. Interest rate hikes usually precede the general public’s notion that a recession has ended. Purchasing property now with a low interest rate will save the savvy investor thousands of dollars in the long run over trying to pick the exact bottom of the real estate market.

3. Lastly, demand for properties in Las Vegas is even higher than statistics may indicate. June of 2011 saw over 5500 single family homes close in the Las Vegas market, but many more untold numbers of buyers would have purchased a home if not for the continued difficulty in obtaining financing, difficulties getting appraisals that match sales prices, trouble finding homes to purchase that haven’t already been snatched up by cash buyers, etc. When credit availability improves, appraisals rise to reasonable levels and distressed properties take up a smaller portion of available inventory, we will likely see an influx of buyers that have been trying to purchase homes but have not yet been able to do so...this influx will inevitably drive prices up.

Many potential investors are understandably nervous about the rocky ride we have been experiencing in real estate over the last several years. I encourage you, however, to take a good look at the facts. Now is a great time to invest in real estate...probably the best time to invest since the Great Depression. Savvy investors...make your move.

If you are interested in purchasing Las Vegas investment properties or learning more about the Las Vegas real estate market, please contact Glenn Plantone.

Las Vegas Real Estate: A Matter of Perspective

Like anything in life, it’s all about perspective and how we choose to look at a situation.
We all have the same data about the housing market available to us. For some, the data reads bleak... this is the worst real estate market ever (at least since the Great Depression). For others, it is the opportunity of a lifetime (also like the Depression if you were around to accumulate real estate at that time).

I ask this question: If the market is so terrible, why are cash investors flocking to Las Vegas, scooping up homes at record levels, and paying cash for them? My perspective, along with most of the other happy, cash investors, is that this is truly the opportunity of a lifetime and we are taking advantage of it now while the iron is still smoking hot. Over 5500 homes were sold in Las Vegas in June of this year (2011). This is the most since August of 2005, the heyday of Las Vegas real estate. But this time around, statistics show that nearly 55% of purchasers are cash buyers and nearly 80% are investors buying up what they can as fast as they can. In 2005 the percentage of cash buyers was very low and the percentage of owner occupied properties was much higher. With prices dropping nearly 70% over the last 4 years, investors are getting rates of return between 8-12% on cash investments and 15-25% on financed investments. The only downside seems to be that with all of this demand, actually acquiring one of these great Las Vegas investment properties is not as easy as you might think.

Just how cheaply you can acquire investment property in Las Vegas in 2011 depends on what type of property you are purchasing. Each form of purchase has its own distinct advantages and disadvantages. Foreclosure properties that are liquidated at the Trustees’ Sale usually fetch around $55/sq. ft. The Las Vegas Trustees’ Sale represents the least expensive and simultaneously the most difficult way to acquire property. You must come to the sale daily in order to bid on properties that can be seemingly endlessly postponed, you must bring all cash to purchase the property, and even then, you are often competing with several other cash buyers on a property that is sold “as is” with no disclosures and limited opportunity to view the property beforehand. I do not recommend the Trustees’ Sale as a means of acquiring property for any but the most experienced professional.

Bank owned foreclosures (or REOs) are currently selling for around $64 per square foot in the Las Vegas market. These properties provide greater visibility for the purchaser and allow for financing options, but the rather substantial downside to this is that the REO market in Las Vegas has become extremely competitive. It is very rare, at the moment, to encounter an REO listing that does not turn into a multiple offer situation, with bidding wars often raising selling prices to well over $75/sq. ft.

Short sales are the next cheapest way to acquire Las Vegas investment property...usually being approved at around $70/sq. ft. This is still a bargain compared to the average closing price of $78/sq. ft. for non-distressed sales and $98/sq. ft. for new construction. Like auction properties and REOs, however, short sales are very rarely in move-in ready condition and usually require some level of renovation before they are ready to rent out. While less competitive than REOs, short sales require lots of time and patience and result in lots of “misses” for every “hit.”

I have become the third busiest buyers’ agent in all of Las Vegas by dealing exclusively with investors that are looking to take advantage of this phenomenal buying opportunity in Las Vegas but want to avoid the stress of hunting for properties on the open market. My team specializes in sniffing out all the best bargains in Las Vegas. We purchase properties from the Trustees’ Sale, from banks, as short sales, and occasionally from private owners and builders. We then rehab these properties to better-than-new condition, find and place a quality long term renter or lease option tenant in the property, and then sell them to our investor cilents for prices that are still below $70/sq. ft. and allow for CAP rates of 10% and higher. Wynn Realty offers in-house property management and renter placement, which works extremely well considering the majority of our clients are from out of state or out of the country.

If you have been sitting on the sidelines, waiting for a good time to act on the greatest real estate buying opportunity of our lifetime...maybe today is a good day to call. I’d love to speak with you.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com

If you’d like to see more of Glenn’s articles, follow his blog at:
www.vegasforeclosures.blogspot.com

MGM Signature 1st and 2nd Quarter Update 2011

I predicted in my final quarter MGM Signature update for 2010 that we would see sales begin to pick up slightly at the MGM during the beginning of 2011, but that sales might become volatile after that time due to lingering uncertainties in the economy and housing market. As predicted, sales did accelerate with 73 units closing in the first quarter of 2011 (51 studios and 21 one-bedroom units.) By comparison, there were 63 units sold at the end of 2010...an increase of almost 20%.

The highest priced studio closed for $214K (unit #135-3507) and the lowest priced went for $112K (unit #135-2318.) This resulted in an average of $159K for studios. The high sale for one-bedrooms was $335K (unit #135-3001) with the low sale coming in at an amazing anomaly price of $138K (unit #125-1102.)

The most significant trend I spotted as we moved into the second quarter of the year, was the drop in inventory and sales and the corresponding rise in average sale price. In the second quarter of 2011, only 31 studios sold (as opposed to 51 in the first quarter) and only 10 one-bedroom units closed (21 in the first quarter.) Simultaneously, we saw the average sale price for studios climb from $149K in the first quarter to $159K in the second.

The gradual climb in price that we have seen at the MGM over the last several months corresponds with my prediction last year that we had seen the bottom of the market for high rise units in this development.

There are three major points that indicate that we will continue to see prices rise gradually at the MGM:

1. There are a total of 1824 units in the MGM Signature Hotel Condo development. Of these, over 700 units have turned over since their original sales dates. This is nearly 40% of the total and represents a disproportionately large number. This means that most of the investors who needed to get out when property values tanked have done so, and those that remain have most likely decided to hold out for the long haul. This means that we will, most likely, not see another large wave of foreclosures and the accompanying price cuts that they produce.

2. Lack of inventory...with the majority of “fire sales” now being completed, we are seeing the available inventory at the MGM continue to shrink. Less supply with steady demand necessitates price increases.

3. By reviewing the docket for upcoming Trustees’ Sales, we are able to see how many units are going to be available at a discounted price. Currently, inventory at the Trustees’ Sale has slowed to a trickle.

All of these items point to the fact that anyone interested in purchasing at the MGM Signature needs to take a serious look at the available units before prices move beyond their current levels. Unfortunately, it can be very difficult to purchase a unit at the MGM. Competition for available, reasonably priced units is fierce. I am the number two salesman at the MGM and I still have difficulty getting my clients good units, or sometimes, any units at all. In order to combat this competition, I look for great deals at the Trustees’ Sale, through REOs, with short sales, and regular listings.

If you are interested in purchasing at the MGM Signature, as an investor or for personal use, or if you are a current owner looking to review your options, please contact me directly and I will be happy to share my expertise on this development with you.

Observations: The Las Vegas Foreclosure Market for Summer 2011

As many of you know, my core business involves purchasing foreclosure properties at the Las Vegas Trustee’s Auction, renovating them to better-than-new condition, placing long term renters or lease option tenants in the properties, and then selling them to my investor clients as turn-key, cash flowing investments. Last year I was able to successfully turn over 25 such foreclosure properties. Half way through 2011, I am on pace to more than triple that number.

But, lately, there has been a hitch...a speed bump so to speak. The foreclosure auction just doesn’t have very many foreclosures. My team has found that where we were able to easily identify and purchase multiple foreclosures weekly only a couple of months ago, now we are struggling to find good deals on Northwest Las Vegas properties. Our personal experience is being backed up by the latest statistics.

Realty Trac recently released data showing that notices of default in the Las Vegas Valley fell to 2,701 in April down from 4,600 in March. That is a huge decline.

So does this data point towards an over-all economic recovery? Not necessarily. RealtyTrac Chief Executive Officer James Saccacio believes that the slow down is a result of delays from lending institutions in processing foreclosures. However, a recent report from CoreLogic shows that the 90-day delinquency rate for Las Vegas has steadily decreased over several months.

Regardless of the impact that declining foreclosures will have on the overall economy, one thing is certain: We will continue to hunt down the best Las Vegas real estate deals for our customers, as we have for the last three years. In the past, when foreclosures have not made financial sense, we have turned to short sales and REOs. We have already begun to shift our acquisition strategy yet again. As I mentioned in a series of artciles in 2009...being a successful real estate investor means being a chameleon...constantly able to adapt and change to fit current market conditions. As we change our strategy, we will keep you abreast of current developments in the Las Vegas foreclosure market.

If you are interested in learning more about investing in the Las Vegas real estate market please contact me for more information.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com

If you’d like to see more of Glenn’s articles, follow his blog at:
www.vegasforeclosures.blogspot.com

What is a Good CAP Rate? What Makes a Good Return on Investment?

In my last article, I discussed how to calculate the three most common ratios used to determine the rate of return on real estate investments: Capitalization (CAP) Rate, Return on Investment (ROI), and Equity Return Rate. Of these, the most commonly used is CAP rate. However, it is actually the ROI that provides you with the most accurate picture of whether or not a particular income property will make a good investment.

Because it is so popular, we will discuss CAP rate first. A 10% CAP rate is often referenced as a goal to shoot for. In general, most areas of the country will have CAP rates that max out at 8-12%. Because Las Vegas has led the nation in foreclosures for the past three years and counting, home prices have plummeted to as low as 30% of their former highs. Rents, however, have only declined moderately. As a result, Las Vegas is currently offering the highest CAP rates available in the United States. For the last three years, I have specialized in purchasing Las Vegas income properties dirt cheap at the foreclosure auctions, renovating them to move-in condition, placing renters or lease option tenants in them and selling them to my investor clients as turn-key investment opportunities with CAP rates that average 10-20%. If you are interested in this type of investment opportunity, please contact me for more information.

Moving on, the better way to evaluate potential investment properties is by calculating Return on Investment or ROI. (If you aren’t sure what this is or how to calculate it, see my previous article on the topic.) ROI portrays what your return is on the money that you have actually put into the project. This provides us with an interesting comparison. If you purchase a property for cash and that property provides you with a 15% CAP rate, then your ROI will also be 15%. However, if you purchase that same property using some form of financing, then your ROI will be much, much higher. As long as you are purchasing properties that have positive cash flow, after all mortgage notes and other expenses are paid, it is always better to purchase using financing in order to maximize your rate of return. We are currently offering our investor clients Las Vegas rental properties that are providing annual ROIs with 25% down of between 20-40%.

The important thing to remember when shopping for investment properties in Las Vegas, or anywhere, is that good deals will always stand up to scrutiny. You should always ask for a detailed proforma or create your own for any investment property that you are considering purchasing. This will insure that you find the best investment properties for your investment dollars.

If you are interested in learning more about investing in the Las Vegas real estate market please contact me for more information.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com

If you’d like to see more of Glenn’s articles, follow his blog at:
www.vegasforeclosures.blogspot.com

Understanding CAP Rate, Return on Investment (ROI), And Equity Return Rate

When you are looking to purchase income property for investment purposes you are bombarded with various statistics designed to show you the strength of the investment you are considering. These numbers can be very helpful IF you understand exactly what they mean and what constitutes a “good” rate of return. To help you accurately evaluate potential investment properties in Las Vegas and elsewhere, it is important to start with a working knowledge of the three main formulas used to evaluate potential real estate investments.

First is the Capitalization Rate or CAP Rate. You will probably see this formula used more than any other when describing the investment potential for a particular piece of real estate. The CAP rate is determined by dividing the NET Annual Operating Income by the Acquisition Cost of the property. NET Annual Operating Income is defined as the total of rents collected in a year minus all expenses associated with owning the property. These expenses may include: property taxes, HOA dues, any utilities paid by the owner, vacancy allowance, repairs/maintenance allowance, property management, and property insurance. Acquisition Cost is defined as the total cost necessary to purchase the property...so purchase price plus all closing costs, title and escrow fees, etc.

Using the above formula, if you acquired a property for $200,000 and the NET Annual Operating Income of the Property was $20,100, then you would have a property with a CAP Rate of 10%. In my next article, I will discuss how to determine a good rate of return.

The second type of return discussed with regards to income properties in Las Vegas and elsewhere is ROI or Return on Investment. If you paid cash for your investment property, then your ROI and your CAP rate will be identical. If, however, you purchased a property using financing, then your ROI will be the NET Annual Operating Income of the property divided by your initial equity investment (cash in the form of down payment, any out of pocket closing costs, etc.) Using this formula, we can see that if we purchased the same property as above and put 25% down ($50,000) then our ROI would be $20,100 divided by $50,000 = 40% ROI. As you can see, financed investments can allow you to leverage yourself into a much higher rate of return for your money than all cash purchases. We will touch more on that topic in my next article.

Another evaluation tool that is extremely useful in determining how much bang you are really getting for your buck is the Equity Return Rate. This is a slightly more complicated formula. The first step is to add your Cash Flow After Taxes with your Amount Paid Towards Principle and Change in Value to the Property. Cash Flow After Taxes, or CFAT, is simply your NET Annual Operating Income minus whatever taxes you paid on that income or plus whatever tax benefit you received because of your deductions for the income property. (During the first several years of property ownership, you will likely show tax savings and add them to your NET Operating Income in order to obtain your CFAT. In subsequent years, as your deductions mature, you will start subtracting taxes paid from your NET Operating Income to obtain your CFAT.) Amount Paid Towards Principle represents the total amount of your mortgage payments over the year that were applied to your principle balance. (On the first year of your property ownership this number will most likely be quite low and will grow each year.) Change in Value represents the amount that your property has appreciated or depreciated in the previous year. Once you obtain this sum, you divide it by your initial equity investment in order to obtain your Equity Return Rate. Using our previous example again: If your CFAT is $20,100 plus your Amount Paid Towards Principle of $1,627 and an appreciation of $6,000 (totaling $27,727) divided by your initial equity investment of $50,000 gives you an Equity Return Rate of 55% for your first year of ownership.

I specialize in offering quality, turn-key investment properties in Las Vegas to my investor clients worldwide. I ensure that all of my properties have a great ROI and Equity Return Rate. Tune in to my next article to learn how to determine what makes a “good” rate of return!

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com

If you’d like to see more of Glenn’s articles, follow his blog at:
www.vegasforeclosures.blogspot.com

What is a Participating Mortgage?

You may have heard the term “Participating Mortgage” lately in conferences on real estate investment opportunities...but what, exactly, is a participating mortgage? And, more importantly, is it a good investment?

Participating mortgages have become more popular lately as investors who are frustrated by historically low returns in savings accounts and money markets, but who are unwilling to risk their funds in a very volatile stock market, look for secure investment opportunities that pay more than 1-2% annually.

As with traditional mortgages, an investor in participating mortgages lends money for the purchase of a home and receives, in exchange, a security interest (mortgage lien registered on title) for a specific real estate property, along with regular monthly payments at a given interest rate. The original investment is returned to the investor at the end of the loan term or upon the sale of the property. A participating mortgage, however, provides a greater benefit to the investor because it recognizes that the value of the real estate securing the mortgage loan may have increased over time. With a participating mortgage, when a property is sold, not only is the original capital paid back to the investor, but a portion of the profits realized from the increased value of the real estate as well. This profit sharing aspect, allows investors to capitalize on the appreciation of real estate without the responsibilities of finding a property, managing tenants, paying bills and maintaining the property.

Whether or not these investments are profitable depends almost entirely on whether or not the property securing the participating mortgage is acquired responsibly and at a reasonable price. Real estate investments in general have received a lot of bad press in the wake of the housing market decline, but the truth is that real estate remains one of the safest, most consistently returning long term investments available.

The key elements of participating mortgages are safety of capital, fixed monthly income, and profit sharing. If you think that participating mortgages might be a good fit for your investment portfolio, or are just interested in learning more about how they work, please feel free to contact me directly. I specialize in Las Vegas real estate investments and utilize participating mortgages for some of my investor clients.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com or www.vegasforeclosures.blogspot.com

"Flip This House" Las Vegas Style

I have been an avid fan of “Flip This House” since it debuted several years ago on A&E. I have watched as Than Merrill, Rudy Martinez, and the rest of the gang flipped foreclosures for profit in cities across the U.S. And sometimes, I’ve wondered to myself, where do they find these guys? Some of the decisions that I watch being made on the show are questionable at best, and the outcomes often seem a little...hmm, shall we say, overly optimistic? Many times, when they tally the expenses at the end of the show, there seem to be quite a few fees that are left out of the equation in order to make it look like the flips turned a profit, or perhaps a larger profit than they actually did.

As the marketing director for Team Plantone of Wynn Realty, I work for a house flipper here in Las Vegas that I would bet puts up numbers that can rival any of the stars on “Flip This House.” I have worked with Glenn Plantone for the last four years, and have watched him grow his team and refine his methods to best serve his investor clients. Last year, Glenn successfully flipped 31 properties in Las Vegas, mostly foreclosures and short sales, and this year he is on track to double or triple that figure.

Glenn actually has a very unique method for acquiring, flipping and reselling properties. Glenn starts by acquiring the properties either through short sales, at the foreclosure auction, or post-foreclosure through bank-owned REOs. Once the properties have been purchased, like the flipper on “Flip This House”, Glenn rehabs the properties to better than new condition. At this point, the similarities end. Most flippers, including those on the show “Flip This House”, liquidate their renovated properties to traditional owner-occupant buyers. Glenn takes the system a step further; by first, placing long term renters or lease option tenants in the rehabbed property; and second, selling the property as a turn-key investment property to his investor clients.

Since Las Vegas has led the nation in foreclosures for the last several years, there are many displaced families looking for rental housing. Glenn’s method provides these families with quality, affordable housing. Simultaneously, Las Vegas continues to be a hot spot for investors looking to capitalize on historically low home prices and high rates of cash flow return. Glenn’s method provides them with turn-key investment properties that couldn’t be easier to own...they are already renovated, professionally managed, and have a cash-flowing tenant in place by the time Glenn offers them for sale to his investors.

I have really enjoyed working with Team Plantone over the last several years and watching a true flipping professional in action. Maybe the “Flip This House” producers will take notice some day. After all, Glenn is posting numbers that should make him the number one buying agent in all of Las Vegas this quarter. Until then, we’ll continue to do our thing...flipping houses, Las Vegas style.

If you are interested in purchasing one of Glenn’s turn-key flips or, if you are interested in investing with Glenn, please contact him for more information.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com or www.vegasforeclosures.blogspot.com

New Loan Program Makes It Possible for Non-U.S. Citizens to Borrow for Second Homes in the U.S.

We recently received a notice from our lending partner that they have expanded their Foreign National Loan Program to include non-resident and non-U.S. citizens borrowing for second homes in the United States. This is great news for our Canadian clients (and other Foreign Nationals) who are looking to purchase a vacation home or first investment home here in Las Vegas.

We have sold a lot of properties lately to Canadian clients who are taking advantage, not only of the historically low prices and available foreclosures in Las Vegas, but also of the unprecedented strength of the Canadian dollar at the current time. This “perfect storm” of buying opportunity will not last forever. If you are a Canadian looking to purchase a great second home for yourself, for income, or both, now is the time to buy. We specialize in helping out of town investors understand all their options in the Las Vegas real estate market and we offer the best buying opportunities possible by taking advantage of Las Vegas foreclosures, REOs and traditionally listed properties.

Michael Lembo, loan officer at iMortgage, has outlined the following major qualifications for the Foreign National Loan:
Maximum Loan Amount of $417,000
30-year Fixed Rate Mortgage
30% Down Payment Required from Borrower’s Own Funds and 6 Month’s Reserve in a US Bank Before Closing
700 Minimum Credit Score with at Least 4 Trade Lines
36/45 DTI
Single Family Homes or Condos Allowed
Must Not Own Any Additional U.S. Property

If you would like more information on this loan product, or to discuss the current purchasing opportunities in the Las Vegas real estate market, please contact Glenn Plantone of Wynn Realty.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com or www.vegasforeclosures.blogspot.com

Free Night at MGM Signature for Real Estate Investors

There has not been a better time to purchase investment real estate in Las Vegas in the last quarter of a century. Over the last few years, home prices plummeted to those seen 20 years ago in 1991. But prices have now stabilized, and investors are finding that rents did not fall nearly as much as purchase prices. This means that investors are now able to purchase Las Vegas investment properties with extremely strong cash flow.

As the fourth busiest buyers’ agent in Las Vegas this year (and on my way to being the busiest agent in all of Las Vegas this year), I have purchased two suites at the MGM Signature Hotel Condos to accommodate my clients when they come to town to look at real estate. If you are a serious investor looking to explore the possibilities of the Las Vegas market, I would love to have you as my guest for a complimentary night’s stay at the MGM Signature Hotel Condo. We will spend the day touring properties in the valley that meet your investment criteria and you can spend the night enjoying all the amenities that the MGM Signature has to offer.

I have created a niche by catering to investors looking to purchase turn-key investment real estate in Las Vegas. I do this by acquiring properties at wholesale prices (purchasing them as REOs, short sales, or at the foreclosure auction), I then completely rehab the properties to like new condition and then place a long term lease option tenant in the property. This means that my investor buyers are able to purchase a property that has been completely rehabbed, already has a tenant in place with strong, positive cash flow, and is professionally managed and ready to go. This strategy makes it possible for out of town, out of state, and even international buyers to easily and profitably purchase Las Vegas real estate.

If you are interested in learning more about Las Vegas investment real estate and staying as my guest at the MGM Signature Hotel Condo, please contact me for more details. Of course, certain restrictions and conditions apply to the MGM free night offer. Call for more details.

Glenn Plantone
Wynn Realty
(702) 656-3264
gsplantone@gmail.com

www.glennplantone.com or www.vegasforeclosures.blogspot.com