Build It And They Will Come...Tony Hsieh's Downtown Las Vegas Dream

Tony Hsieh, CEO of Zappos, has been making waves in Las Vegas lately by going on a mini real estate buying spree in a concentrated area of Downtown Las Vegas.  Hsieh founded and has provided the bulk of funding for the Downtown Project, a $350 million vision aimed at attracting business and growth to Downtown Las Vegas and creating thriving, lively neighborhoods.  Unlike many other urban renewal efforts that focus on either residential development or large municipal structures, such as arenas, Hsieh notes that, “we are focused on office space for entrepreneurs, retail, small businesses, and in general helping make Fremont East a place of entrepreneurial energy and a safe, walkable neighborhood.”

Andrew Donner of Resort Gaming Group is Hsieh’s chief real estate deal-maker and has recently purchased 14 downtown parcels totaling around $45 million.  These properties include the former City Hall at 300 Stewart Ave. as well as several residential hotels.  Hsieh notes that it is still too early to speculate on exactly what will be done with these properties, but the overall vision is to create “pods” of activity that increase foot traffic as well as spending and prompt other property owners in the area to make improvements to their assets as well.

To spite the noble quality of Tony Hsieh’s vision, his plan is not without its detractors.  Some in the real estate community have complained that the high profile buying of the Downtown Project was driving up real estate values in a depressed area that otherwise does not command top dollar.  Terry Murphy, a downtown property owner and lobbyist, feels that any impact caused by Hsieh’s buying is likely to be short lived and subordinate to the overall benefits of The Downtown Project.  Murphy said, “There certainly has been an impact on prices, but the upward impact on actual value will more likely occur over time as the Downtown Project developments and others get under way.”

Foreclosure Frenzy Moves from Las Vegas to Atlanta

As Las Vegas foreclosures ground to a near halt after the passage of AB 284, Sin City passed its long-held foreclosure capital crown to Atlanta.  It seems Las Vegas may have sent its corporate buyers to the Georgia capital as well.  Atlanta now leads the country in foreclosures and private equity firms have definitely noticed.  Investment groups like Blackstone Group LP and Colony Capital are sending armies of representatives to Atlanta to purchase properties.  These groups specialize in purchasing single family homes, renovating them, and placing renters in the properties.  This is the same formula Team Plantone has been using in Las Vegas for the last three years.  The major difference lies in the return generated for investors.  We have been able to return double digits consistently for our investors in most cases, where these large capital groups are satisfied with returns of 6% on their investment capital.  As a result, the equity firms that are descending on cities like Atlanta are willing to pay much more for foreclosure properties than their private money competitors.  Peter Horbulewicz, a house flipper in Georgia, commented, “If you go head to head with them, they always win, because they always overbid.”

This drama that is now unfolding in Atlanta has already been played out in Las Vegas and Phoenix where the upward buying pressure exerted from institutional money has raised home prices by 20-30% in these cities.  Private equity groups are able to pay retail for home and still make their desired 6% returns because the gap between the cost to own and the cost to rent is near the highest it’s been in decades in cities like Phoenix, Atlanta, and Las Vegas.  In Phoenix, renting a house was 49% more expensive than owning in August according to Trulia.  In Atlanta, renting was 57% more expensive.  The numbers were slightly lower for Las Vegas, but along the same lines.  The large premium paid for rentals is being caused by a huge increase in demand for rental properties as displaced homeowners, who can no longer purchase a home after credit issues, seek rental properties.

It remains to be seen how this saga will play out across the country.  Some experts believe that the rise in home prices brought about by institutional investing will be temporary if the broader economy does not improve significantly over the next year or two.  Regardless, one thing is certain, rental housing will be in considerable demand for the foreseeable future.  Now is the time to buy in Las Vegas, but the purchase must be prudent, and the buy price must generate cash flow.  If you are interested in investing in Las Vegas real estate or foreclosures and would like guidance to make sure your purchase is financially sound, contact the experts at Team Plantone.  We’ve been guiding Las Vegas investors successfully for years and we are eager to help.

Now's The Time To Sell In Las Vegas!

If you are a homeowner in Las Vegas looking to sell your home, this current market may be the best opportunity you see for quite some time.  Over the last year, home prices in Las Vegas have risen steadily as the lack of foreclosure inventory has continued to put upward pressure on home values.  But this lack of supply may soon come to a close, and many experts believe this will send prices falling again in the Las Vegas valley.

In September of 2011, there were 4,684 notices of default issued in Las Vegas.  In October, Nevada Assembly Bill 284 went into effect and the number of NOD’s dropped to 80.  New regulations aimed at holding banks accountable for the transfer of paperwork and ownership throughout the loan process effectively handcuffed the lending institutions with the threat of stiff fines and criminal culpability if foreclosure agents did not have “personal” knowledge of a property’s document history.   Banks have slowly found ways to resume foreclosures in some cases, but foreclosure filings still measure only a fraction of what they should be based on the number of homeowners in default.  Last month, November 2012, there were 1,417 notices of default issued in Las Vegas, up considerably from last year, but still well below the 4-5,000 foreclosures per month that were being initiated prior to AB284.

Most analysts believe that AB284 is stalling legitimate foreclosures and creating an artificial boost in housing prices that is likely to collapse once banks begin to foreclose again in earnest.  The end to this boom may be drawing very near.  Banks are currently in talks with Attorney General Catherine Cortez Masto discussing possible amendments to AB284 that would allow foreclosures to continue in Nevada.  Cortez Masto has expressed concern at the results of AB284, stating that the bill was meant to uphold the integrity of the legal process and protect homeowners from wrongful foreclosures, but that it was never meant to prevent legitimate foreclosures.  (It is interesting to note that several real estate professionals, including the author, warned Cortez Masto that this is exactly what would occur if AB284 was passed.)

Regardless of how this matter is ultimately resolved, one thing is certain.  It may be the best opportunity to sell your home in Las Vegas that is likely to exist for quite some time.  It is almost certain that this “shadow inventory” of foreclosures will be released onto the Las Vegas housing market at some point in the next year.  It seems logical to assume that once the artificial imbalance of supply vs. demand has been corrected, home prices will drop again in Las Vegas.  My recommendation to any homeowner considering selling is to move quickly.  Contact Team Plantone if you would like more information on current market conditions or to enlist our help in selling your home quickly.

Extending the Mortgage Debt Relief Act Far From Certain

 

Last month I reported on the looming expiration of the Bush tax cuts at the end of this year.  Included in these expiring cuts is the Mortgage Debt Relief act.  This provision, passed into law in 2007, allows an exemption from taxes for people who have lost their home through foreclosure or short sale and have received forgiveness from the banks for the portion of their debt that was not covered by the foreclosure auction or short sale.  If the tax cuts are allowed to expire without modification or extension, then the Mortgage Debt Relief act would also expire.  This expiration would mean that any homeowner receiving forgiveness for a portion of the amount owed on their mortgage, whether through short sale, foreclosure, loan modification would be required to pay taxes to the Federal Government on this amount as if it were regular income.

Although there is widespread bi-partisan support in both houses for an extension of the Mortgage Debt Relief act, it is still not certain that this act will, in fact, be extended.  The reason for this can be found in the figures behind the law.  Although we do not have data available to show exactly how much total debt homeowners have been forgiven in the last five years, we do know that the Congressional Budget Office has estimated that allowing the exclusion to expire would generate around $1.3 billion in taxes from affected homeowners.  According to Brian Bernardoni, senior director of government and public policy at the Chicago Association of Realtors, this juxtaposition between what is best for homeowners and what is best for a government struggling to combat a huge deficit is what keeps the extension of the Mortgage Debt Relief act in doubt.  Bernardoni notes, “This could be one of the unintended consequences of a deal to avoid the fiscal cliff.  Singling out any one group for tax relief is going to be difficult.”

There is a bit of the chicken and the egg paradigm at work here.  Some lawmakers believe that the health of the overall economy must be considered over the interests of a particular group of citizens or a particular sector of the economy.  Others believe that the health of the housing market is so directly tied to the recovery of the economy at large that failure to extend this measure could prove debilitating to the entire recovery effort.  Mesirow Financial’s Diane Swonk puts it this way, “Housing is finally showing signs of healing after a prolonged illness...We still have a long way to go, but it has reached a critical shift in momentum, if allowed to continue; the choice is in the hands of our elected officials, and the clock is ticking.”

I will continue to update my readers on the status of all negotiations in Congress, and their potential impact on the housing markets, as those details become available.

In Real Estate Good Things Come to Those Who Don't Wait

They say that good things come to those who wait, but lately good things come to those who pounce quickly.  Real estate has become a hot commodity once again, and houses that once languished months, or even years, on the Las Vegas MLS are now being snatched up in days or even hours.  We have certainly observed this phenomena first hand, especially in the last six months, as we watch foreclosures and REOs being bid up and short sales being submitted with multiple back-up offers.  

The following graphic is constructed off of data from the latest Realtor’s Confidence Index.  As you can see, nearly ⅓ of all homes on the market are selling within one month.  This is a huge departure from sales data one and two years ago.

Why are homes selling so quickly here in Las Vegas?  Affordable housing and attractive interest rates.  Interest rates remain the lowest they’ve been in years, and housing is extremely affordable even after the 20% gain in median home price we’ve witnessed in the last year.  What is interesting to note in all of this, is just how strong the rental market in Las Vegas continues to be, even with low home prices and even lower interest rates.  

Traditionally, as home prices drop, if interest rates are low, it becomes cheaper to buy than to rent.  This is definitely true here in Las Vegas.  The average home-owner can save between 50-100% monthly on their mortgage versus rent on the same property.  When this occurs, typically rents will fall as landlords are forced to make their product more competitive.  For the most part, this has not happened in Las Vegas.  Rents have dropped very slightly, but nothing compared to the plummet in home prices, and even as interest rates remain low, rents have remained strong.  This is due, no doubt, to the large percentage of the Las Vegas population who are currently ineligible to purchase a home because of recent foreclosure, bankruptcy, or other negative credit activity.  

As a result, it continues to be an excellent time for investors to enter the Las Vegas real estate market, although it is much more difficult to find affordable properties than it was one or two years ago.  Gone are the days when investors had multiple Las Vegas foreclosures to cherry pick.  For those who are interested in Las Vegas investment real estate, I recommend “alternative acquisition strategies.”  We have had to get very creative in order to find properties for our clients in this market.  Give me a call if you’d like to hear more.

Prices Continue to Rise in Las Vegas as Foreclosure Freeze Drags On

For several years, Las Vegas made headlines nationwide as the foreclosure capital of the United States.  Now the big news coming out of Las Vegas is the complete lack of foreclosures.  In September of 2012 less than 300 homes were foreclosed upon in the Las Vegas valley.  There are only 375 foreclosures listed for sale on the MLS as of November 15, 2012.  There are 876 short sales listed.  A year ago today, there were approximately 12,000 short sales listed on the MLS!  Great news for homeowners right?  Not really.

At the moment, real estate in Las Vegas is very clearly divided into two groups.  In group #1 are the few foreclosures that are available, short sales, new construction, and certain other properties that can be priced, for one reason or another, at current market value.  These properties are selling...and selling quickly.  United Press recently quoted real estate agent Keith Lynam who said that the problem in Las Vegas is, "There is just zero inventory."  But why?

The answer to this question lies in group #2.  Group #2 is composed of all the homes in Las Vegas that are still “under water.”  With all of the talk of a recovery in the Las Vegas real estate market, it is interesting to note that according to the Las Vegas Sun, 70% of Las Vegas homeowners are still underwater.  In fact, 36% owe more than double what their homes are worth.  These are homes that cannot be sold.  But, because the median sale price of homes in the Las Vegas area has risen almost 20% in the last year, many of these homeowners are holding on...hoping that this small recovery will blossom into a return to the prices of 2007.  Unfortunately, this is extremely unlikely.

During the real estate boom in Las Vegas in the early 2000’s, prices soared to highs well above the steady 3-4% annual growth that real estate typically generates.  As far as prices have fallen since then, surveys show that they’ve really only just about returned to the trend line.  Prices aren’t supposed to be any higher than they are right now.  This point is illustrated by the return of new construction to the Las Vegas housing market.  For several years, new housing starts were virtually non-existent in Las Vegas because foreclosures were selling for less than their replacement value...that is, less than what it would cost to build the same house from scratch.  As prices have risen, new home starts have rebounded because it is now possible for home builders to compete with foreclosures.

The combination of these factors have created a very odd dichotomy in the Las Vegas real estate market.  We have homeowners that are months (or even years) behind in payments but are not being foreclosed upon because of the halt in foreclosures brought on by AB 284 and other factors.  We have homeowners who are buried in debt holding out a desperate hope that the market will once again soar and their homes will no longer be upside down.  We have new homes being built and sold to fill the vacuum of demand created by the fact that 70% of potential Las Vegas real estate is essentially frozen.   It is an interesting paralysis.  

In the midst of this mess, Las Vegas remains very attractive as an investment destination.  For those investors who can secure affordable properties in Las Vegas, these properties are generating great returns and very strong cash flow.  If you are interested in purchasing Las Vegas investment real estate, contact me.  There are ways to beat the crowd using non-traditional buying methods and we specialize in those methods.

Las Vegas Real Estate - Four Years Later

On the eve of this election day 2012, I thought it fitting to look back on the last four years of activity in the Las Vegas Real Estate market.  Romney fears that we are in worse shape and heading down the wrong path.  In the interest of full disclosure, I should note that I agree with him.  Obama says that his incentives are working.  I would argue that the rise in prices we have observed in the Las Vegas real estate market are a “false recovery” that has more to do with artificially low inventory brought on by a decrease in foreclosures than a strengthening of the local or national economy.

2008 marked the first year where it was safe to start dipping a toe back into the Las Vegas real estate market.  Prices careened downward for 18 straight months from Jan 2007 through late 2008 sending the average home price in Las Vegas plummeting from over $300K to around $120K.  As the free fall began to slow, I started advising my investor clients that Las Vegas was becoming the perfect location for property investors.  Over the next four years, Las Vegas consistently led the nation in foreclosures with over 100,000 foreclosures being completed in those 48 months.

What is interesting to note is what has happened in Las Vegas in the last year.  Although over 150,000 homeowners are still upside down on their mortgagees, foreclosure proceedings have ground to almost a halt.  In 2008, foreclosures accounted for 75% of all sales.  This year (2012) they account for only 15%.  Part of this is due to the difficulty banks are facing carrying out the foreclosure process in the wake of AB284, but some of it is also due to an increased willingness on the part of the banks to negotiate short sales or loan modifications rather than foreclosing.  Unfortunately, this slow down in foreclosures has caused home prices to artificially inflate in the Las Vegas valley with median prices up almost 20% just this year.

Another interesting statistic shows that even as foreclosures ease, the majority of homes are still being purchased by investors.  80% of all closings in Las Vegas this year were sales to investors and 60% were cash deals.  This graphically illustrates how difficult it is currently for homeowners to obtain financing to purchase a home.  I have personally observed this trend within my own business model.  Over the last four years, I have sold over 450 homes, more than 300 were foreclosures, over 100 were short sales, and 150 were flips.  I have also brokered two bulk deals; one a 9 home package at near $1M and the other a 15 home package at around $5M.  Of these, only about 10% were sold to owner occupied buyers.  The rest were sold to investors, and approximately 85% were cash deals.

As this election plays out, it will be interesting to see how things change in Las Vegas over the next four years.  One thing, however, is certain: the opportunities right now, at election day 2012, are tremendous for real estate investors in Las Vegas and even better for those owner occupants that can buy in this market.  Things are a little rockier for the 150,000 homeowners who are still hoping for relief from their upside down mortgages.  Only time will tell if the next president can help these folks and whether or not a full recovery is in Las Vegas’ immediate future.

Expiring Bush Tax Cuts Include Mortgage Debt Relief

Regardless of which box you are checking in the upcoming election, you should be aware that the expiring Bush tax cuts, made famous by the recent presidential debates, include a provision that excludes mortgage debt relief from taxation up to a maximum of $2 million.  If the Bush tax cuts are allowed to expire, the Mortgage Debt Relief Act will expire with them.  This means that homeowners who have received reductions in their mortgage debt either via short sales or loan modifications will be required to pay income tax on the amount of principal that was forgiven.  According to a recent article in The Chicago Tribune, this would amount to around $19,000 in taxes owed for the average middle class relief settlement.

There appears to be bi-partisan support in both houses for extending the mortgage debt relief portion of the Bush tax cuts for another several years, but without extending the rest of the cuts it seems unlikely that a bill supporting the extension of just the mortgage debt relief portion will even reach a vote prior to the November elections.  

This is especially bad timing when you consider that the nation’s five largest banks (Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.) have recently increased their offerings of principal reductions and other relief to homeowners as part of a $25 billion settlement with federal and state officials over foreclosure abuse allegations.  If the Bush tax cuts, including the mortgage debt relief act, do expire then these principal reductions will be reported to the IRS and will appear on homeowners’ tax returns as income.

Experts agree that while the housing market shows signs of stabilization, extending these tax cuts is vitally important to keeping the housing recovery on track.  "Extending this tax relief is critically important," said Lynda Gledhill, a spokeswoman for California Attorney General Kamala Harris. Harris was a key player in the national mortgage settlement.  "It is difficult to imagine strapped homeowners able to take advantage of these and other market-restoring programs if they have to pay federal income tax on the principal reduction or short sale as 'income,'" Gledhill said.

My personal opinion is that we will probably see Congress find a way to extend these tax cuts for another 6 months to a year, much as they extended the first time home buyer credit in 2010-2011.  Regardless, one thing is certain.  If you are even remotely considering selling your home via a short sale, now is the time to do it.  If you are able to close before the end of the year, you know that you will be able to take advantage of the tax credit.

Timing the Bottom of the Housing Market Unimportant

“Are we there yet?”  This is a question fielded to me almost daily by investor clients wanting to know if now is the right time to step into the Las Vegas investment real estate market.  Have prices started rising again?  Have we (finally) reached the bottom?

Over the last year or so I have answered this question by providing my clients with a barrage of data supporting the notion that we have, in fact, reached the bottom of the real estate crash in Las Vegas and that we are headed up.  (This data has only become more compelling in recent months.  Median home prices in Las Vegas have risen for the past eight months in a row.)  

But, perhaps my answer, accurate as it is, is not the most informative.  Perhaps the best answer to the “Are we there yet?” question is “It doesn’t matter.”  Lawrence Yun, chief economist for the National Association of Realtors, wrote an article recently discussing real estate trends over the last 30 years.   The statistics he shared were surprising even to a die hard real estate proponent like myself.  Yun revealed that in the 30 years from 1981-2011 home values more than tripled!  This to spite enduring the worst real estate crash on record.  This means that households who purchased properties 30 years ago are seeing a nice return on their investment.

Yun also highlighted an enlightening fact contrasting the financial position of home owners vs. renters.  Renters’ typical net worth today is $4,000.  This hasn’t changed much over the last few years, as renters have remained mostly insulated from the losses sustained by the housing market.  However, while the average net worth of home owners has dropped significantly since the housing bubble burst, it remains around $160,000, significantly greater than a typical renter.

These facts illustrate an important principle of long term real estate investment strategy...if you buy to hold it doesn’t matter if we’ve reached the bottom or not.  Those who bought real estate 30 years ago made a very successful investment even though their home values declined dramatically as a result of the housing bust.  Obviously, in order to turn a profit, it is important to avoid buying real estate at the absolute top of a precipitous market, but if you make sure that your properties cash flow at the time of purchase, you are virtually guaranteed that you will see positive appreciation over the near and long term.

Nevada Court Paves the Way for More Foreclosures

And I don’t say that as if it is a bad thing.

The Nevada Supreme Court voted 7-0 to uphold the role of MERS (Mortgage Electronic Registration System Inc.) in the foreclosure process.  MERS is an industry database that was designed, according to William Uffelman, president of the Nevada Bankers Association, to “bring loan recording into the 21st century.”

Consumer advocacy groups had argued that the involvement of MERS in the foreclosure process made it impossible for delinquent homeowners to face an actual lender.  Had the involvement of MERS been ruled unlawful, banks would have faced a much more difficult path through the foreclosure process.

Jacob Hafter, an attorney for a homeowner suing MERS, believes that the Nevada court "has cleared a path to begin foreclosing in a mass effort."  That might not be such a bad thing.  Foreclosures have dwindled to a mere trickle since AB 284 was passed late last year.  The result has been extremely light inventory and the creation of what some fear will be yet another artificial rise in home prices here in Las Vegas.

It remains to be seen how much effect this ruling will actually have on the number of foreclosures processed in Las Vegas.  It is also unclear whether banks would begin to liquidate foreclosures individually, on the open market, as they have in the past, or through larger, bulk packages of properties, as seems to be the current trend.  Either way, Team Plantone is poised to help our investors purchase these new foreclosures.  We are very familiar with the traditional trustees’ sale method of liquidation and we have also positioned ourselves to give our clients access to larger, bulk packages of REOs as they come available.

Full Service Real Estate Brokerage - Missing the Forest for the Trees

There is an old adage that says, “Don’t miss the forest for the trees.”  In other words, don’t get so caught up in minor details that you miss the big picture.  This is good advice for all of us...especially me.   Sometimes I write and talk so much about the areas that myself and my team specialize in, that I forget to mention all the other folks at VIP Realty and all the other services that we offer.

Most of you who have followed my blog and articles for the last several years are very aware that I specialize in finding investment properties for my clients and helping to place quality tenants in these properties so that they become turn-key, cash flowing investments suitable for local Las Vegas buyers as well as out of town investors.  You probably also know that many of these properties happen to be located in the Northwest area of Las Vegas that we call the “New Northwest.”  This is because this area of Las Vegas often provides the best combination of newer homes, low prices and high rents.  You have most likely also noted that I have closely followed the MGM Signature property on the Las Vegas Strip and that I have sold dozens of these units because I find them to be the best value on the Strip.

What many of you may not be aware of is that our business has grown exponentially since I first obtained my real estate license several years ago.  I am now a real estate broker presiding over an office full of agents and support staff that handles listings throughout the Las Vegas valley.  We have full time property managers, transaction coordinators, sales agents, buyers’ agents, agents who specialize in rental listings and office staff on site in our new office.  We have agents on our team who specialize in Henderson, Summerlin, Aliante, North Las Vegas, Southern Highlands, Old Las Vegas, and everywhere in between.  We have agents that excel at taking listings and those that regularly take buyers on tours of homes in the local area.

Whether you are an investor looking to purchase income property in Las Vegas or an owner occupant looking for a great deal on a new home, we can help you achieve your goals.  If you are a renter, we have a large selection of newly renovated properties available, many with lease options or owner financing.  No matter what your Las Vegas real estate needs may be, we have someone who can provide you with prompt, personal service.

New Paths to Guaranteed Returns

As a licensed real estate Broker and agent here in Las Vegas, I have spent the last six years specializing in finding the best deals for my inventors.   To qualify as a “best deal” these properties have to include both an equity position and positive cash flow.  I have been personally accelerating by purchse of buy and hold homes here in Las Vegas over the last several months as it is my true belief that we have hit the bottom of the market and that home prices will not go down any further. In fact, because of low inventory, prices have risen steadily since early this year.  Prices seem to have bottomed at a low point that was down as much as 75% from highs of about five years ago.   I have acquired 10 properties this year for my long term portfolio and have three more under contract at the time of this writing that are due to close within a month.

Through our many methods of acquiring homes: foreclosures, short sales, trustees’ sales, bulk purchases, and distressed properties we are able to acquire homes at a reasonable discount from today’s retail value.   After fixing and rehabbing the homes, we then place quality renters in the properties and place them with our in-house property management division at VIP Realty Group.  We currently manage over 50 homes and have a full service/full time property manager on site along with several agents that specialize in filling our rental properties.  Over the last two years my team has bought and sold (flipped) over 150 homes in the Las Vegas market, making me one of the busiest investors in this market along with being the 7th busiest buyers’ agent in all of Las Vegas last year.

This prelude outlining our business model brings me to our most recent development:  If you are looking for a comfortable, guaranteed return of 8%, I have an opportunity for you.  As a full time real estate investor with over 30 properties in my personal portfolio, I am no longer able to acquire loans on investment homes through conventional methods (banks/lending institutions).  Most of my homes are privately financed by individuals, like you, who are looking for a good return and safety of their investment.

My lenders are always in first position with a deed of trust placed against the home, and we generally have a loan to value ratio of near 75% of the market value of the home.  We pay interest of 8% on a monthly or quarterly basis (whichever the investor prefers) with a one year initial loan term that can be extended if both parties are willing.  Numerous referrals from satisfied clients are available upon request.   

I specialize in the northwest part of town and know my market extremely well.   The risk for investors is as close to nonexistent as possible as we insure that we have strong positive cash flow on the home as well as a strong equity position. Since we believe that we are already at the bottom of the market, we are also strongly protected against a downward price drop.   In the event that an exit strategy is needed, any of my homes can be easily sold to either an investor looking for a turnkey rental property or an owner occupied buyer that is also looking for a home in great move in condition.

This type of investing is often called “First Trust Deed” investing and puts the investor in a safe position with a guarantee of income each and every month.  This type of investing takes all the hassle out for you because our team rents, manages, and handles any rehabs and maintenance of the home at our cost.  You sit back and enjoy strong returns on a safe, secured investment.  Please contact me directly if you are interested in investing with First Trust Deeds in Las Vegas.

Las Vegas, NV - Real Estate Agents Wanted!

Last year, I was ranked as the 7th busiest buyers’ agent in all of Las Vegas.  This is perhaps especially noteworthy in that I deal primarily with investors that are looking to either buy and hold or flip Las Vegas properties.  Over the last several years, I have established a strong internet presence through my blogging, articles, press releases, and websites.  I also utilize more conventional marketing avenues such as advertising and signs and I get large numbers of referrals from sales and rentals to satisfied clients.  From the combination of these sources, I generate a huge amount of leads.  Quite honestly, more leads than I can handle.

I am looking for a couple of agents that all fluent in “investor speak” and are looking for the opportunity to close more deals and earn more money.  I am also looking for rental agents that can assist us in getting our investor rentals leased.   

We have a beautiful office in the northwest located in the quaint Village at Centennial Hills district near I-95 and Durango.  We have two full time brokers on site every day.  We offer a low transaction fee, free offices for agents with no monthly fees and a full service property management division that handles rentals for our investor database.  We have recently facilitated and closed several bulk deals with national and local banks.  We find properties for our investor clients any way we can.  Recently, we have worked with non-profits to buy homes for our investors, as well as buying at the Trustees’ sale, and purchasing REOs, short sales, and other distressed properties in Las Vegas.

I have personally flipped over 150 homes in the last two years and own over 30 income properties in my personal portfolio.  If you are looking for a brokerage that specializes in working with investors and can help you increase your personal income along with helping you to increase your own real estate portfolio, please call Broker/Owner Glenn Plantone to set up a private and discreet interview.

8% Guaranteed Returns on Hands Off, Secure Real Estate Investment

Over the last several years, I have been approached many times by clients who are looking for better returns on their investment dollars by investing in Las Vegas real estate, but are worried by the property management and other potentially time consuming aspects of purchasing real estate.  This is often especially troubling for potential investors who live outside of Las Vegas, many of whom live across the country or even across the world.  Other investors are concerned by the potential for vacancies in their properties and would prefer an investment that they view as more stable.  Even though our goal at Team Plantone is to make buying Las Vegas investment properties as turn-key and simple as possible, we realize that some of our clients are looking for an even easier, more secure alternative to our normal property acquisition process.

This is why, a few months ago, I facilitated our first ever Guaranteed Return Real Estate Backed Investment for one of our clients.  Since then, I have successfully helped many other investor clients purchase this simple, hands off investment vehicle that generates secure returns with much higher yields than anything available on the bond or CD market.

The mechanics of this investment are actually quite simple.  The client decides how much they wanted to invest in the program and wires the funds into our secure account.  With these funds, I personally select one or more properties, purchase them, and handle all the details of renovating and renting the homes.  Our on site, professional property management division collects rents,  handles any property management or repair issues and pays all the bills associated with the property.  Meanwhile, my client receives a GUARANTEED 8% return on his money from the day it enters our account for the length of his contract term (which he selects.)  During this time, his
account is secured by a first position lien on the properties.

Of course, no investment is completely secure and you need to carefully evaluate any investment opportunity including its potential risks.  However, Guaranteed Return Real Estate Backed Investments have proven to be the perfect mix of return, convenience and security for many of my clients.  If you are interested in receiving more information on how this unique investment vehicle can work for you, please contact Glenn immediately.

Judicial Foreclosures Fuel Speculation on the Future of Home Prices in Las Vegas

Just when you thought it was safe to go back in the water...  Median home prices in Las Vegas have been rising steadily since shortly after AB 284 was passed last October.  In fact,  many Realtors have noted that the last few months have felt more like the boom years prior to the housing bubble collapse then the middle of an economic recession.  Extremely low inventory, brought on by the sudden, dramatic decline in foreclosures in the wake of AB 284 have created a Sellers’ market where multiple buyers are often competing for the same property and homes are selling at or above list price.

In the midst of this enthusiasm reminiscent of the “good old days” many financial analysts and real estate guru’s (including myself) have been consistently warning that the final effects of AB 284 are likely to be negative, not positive, and that things which appear too good to be true generally are.  We are just now beginning to hear the first rumblings of what the exact nature of this inevitable reprise might be.

A few days ago, a blog post from a local Las Vegas Realtor was brought to my attention.  His entry discussed a Judicial Foreclosure that had just recently been carried out against a client of his.  No clue what a Judicial Foreclosure might be?  Not surprising...they haven’t traditionally been used in Nevada, because there has been no need.  Foreclosure proceedings have typically been handled in Nevada, as they are in most of the rest of the country, through the normal notice of default, notice of foreclosure, Trutees’ sale/auction process that we have all come to understand.  However, with the passage of AB 284 the banks were faced with a dilemma.  With AB 284, the State of Nevada made it impossible for banks to initiate and proceed with foreclosures through the usual channels without utilizing countless employee hours to verify paperwork at every step.  All the additional regulations in AB 284 that were designed to “protect” the homeowners, increased the amount of time and effort required by the banks to initiate a foreclosure proceeding without incurring large fines.  This put the banks in a difficult position.  They could, conceivably, continue to foreclose, but the procedure they must now use would be so time consuming that it bordered on “not worth it” financially.

The solution to the banks’ problems may be Judicial Foreclosure.  In a Judicial Foreclosure proceeding, banks actually sue the homeowner in a court of law for breach of contract.  They then call upon clauses that exist within most mortgage contracts guaranteeing the plaintiff (the bank) all legal fees required to collect the defaulted upon debt from the defendant (the homeowner.)  Do Judicial Foreclosures take more employee hours and more out of pocket costs for the banks than even post-AB 284 standard foreclosure proceedings?  Of course.  But, the banks can seek additional damages through Judicial Foreclosures (like legal fees) that they cannot seek via the traditional foreclosure process.  

In the example cited in the blog, the homeowner was sued for their back payments plus interest, plus forefeiture of the property, plus the deficiency (difference between what is owed on the home and the amount borrowed), plus legal fees and other costs associated with the foreclosure.  The defendant was served in June of 2012 and less than two months later she had lost her home and had to declare bankruptcy.  Ironically, she had planned to list her home for short sale just as soon as she received an NOD from the bank.  She never received one.  Instead, she was summoned to court.

There is a lot of speculation beginning in the Las Vegas real estate world as to what a wave of Judicial Foreclosures might mean for the housing recovery.  Some say that it would usher in a fresh wave of foreclosures that would halt the rise of home prices and drive Las Vegas real estate into another recession.  Others, myself included, believe that even if Judicial Foreclosures become rigeur de jour in the Las Vegas real estate market, the procedures are likely to be more time consuming for the banks and, as result, are less likely to result in a large number of foreclosures being dumped on the market at one time.  They would more likely create a steady flow of foreclosures which would certainly not drive home prices up, but would likely be absorbed by the high demand for affordable Las Vegas real estate and would not, therefore, result in prices decreasing dramatically either.

Only time will tell whether or not Judicial Foreclosures will catch on in Las Vegas or what the effects will be.  But one thing remains certain: buy and hold investors who purchase properties with strong positive cash flow will be cushioned from the short term market movements that can cripple investors looking to turn quick, flip profits.  Las Vegas remains a great place for investors to purchase rental real estate, as long as they buy smart.

Bulk REO Package Available for Purchase in Las Vegas

The big news story in the Las Vegas real estate market continues to be the lack of REO inventory. Record low inventory has prompted multi-year highs in new home starts and steadily rising home prices. As a full time real estate investor, this has proven problematic for me and my clients. Finding affordable foreclosure properties to renovate or cash flow has been getting more and more difficult.

Recently (and by recently I mean this morning), I've found a solution. I have been in discussions with a major national bank and it turns out that the rumors of a "shadow inventory" of foreclosure properties in Las Vegas is true. The banks are sitting on foreclosures, but they do not intend to release them onto the public market (the MLS.) Instead, the banks are selling these REOs (post-foreclosure, bank owned properties) in bulk packages of $5MIL - $25MIL.

We have recently secured such a package containing REO properties located only in Las Vegas, NV. We are contributing $3.75MIL to purchase these properties and we are looking for an investor to come in with the remaining $1.25MIL to take it down. We will be purchasing these properties for 25-30% off current appraised values. This is a fabulous opportunity to pick up extremely hard to find Las Vegas investment properties at bargain prices.

More information on this Las Vegas bulk REO package will be provided to any serious, interested investor with proof of funds.

Property Management - The Glue That Keeps Us Together

You may realize (because we’ve repeatedly told you) that Glenn Plantone is the 7th busiest real estate agent in all of Las Vegas and that he specializes in rehabbing distressed properties and turning them into beautiful homes.  What you might not realize is that Team Plantone at VIP Realty has quietly grown into one of the premier property management firms in all of Las Vegas.  

It was a business that developed out of necessity.  After Team Plantone finished a renovation project, it became necessary to place a quality tenant in the home in order to hand over the property to an investor buyer as a turn-key investment opportunity.  Many of these investor clients were located out of state or even out of the country.  Glenn found himself spending countless hours meeting with property management firms, handing out business first to one and then another, trying to find a PM company that would take good care of his clients and their tenants.  Glenn quickly discovered that nobody can take care of your valued clients as well as you can yourself.  And so VIP Realty’s Las Vegas Property Management Division was born.

VIP’s Las Vegas Property Management team offers all the services you’d expect from a first class PM firm: full service property management, rehabs, application processing, marketing, repairs, and tenant screening.  VIP does not charge set-up fees and offers multiple property discounts.  VIP will also help to market self-managed properties for a reasonable fee that includes the rental agent’s commission.  

Because of our reputation for performing high quality renovations, we always have a waiting list of potential tenants looking for the perfect rental property.  This reputation helps us to fill our client’s vacancies quickly.  

If you are a property owner looking for property management that was developed for the express purpose of catering to your needs, contact our Property Management team today for more information.  If you are a renter looking for a great property to call home please call us for more information on our current availabilities.

Silver Lining - The Investment Opportunity Lurking Behind AB 284

If you follow my articles, you know that I have been writing a lot lately on how the passage of Nevada Assembly Bill 284 has swiftly and dramatically changed the landscape of Las Vegas real estate over the last 8 months.  By and large, this change has proven disastrous for investors.  One of the components of AB 284 is a provision making it a felony carrying a $5,000 fine per offense for any mortgage servicer or trustee to make false representations concerning a property title.  On paper this may sound inoccuous.  In practice, the bill was designed to target specifically the practice of bank employees signing documents and affidavits (such as notices of default or notices of sale) without verifying personally the information contained in the document or affidavit.  Banks had developed a method of dealing with the flood of defaults on their books and issuing the required documentation attending each foreclosure proceeding.  This method involved bank employees signing thousands of these documents at a time and became known as “robo-signing.”  As a result of the new Nevada law carrying threats of criminal charges for faulty filings, many mortgage servicers (banks) have simply stopped initiating foreclosure proceedings in Nevada.

After the passage of AB 284 in September of 2011, foreclosures plunged instantly.  There were over 5,000 notice of defaults issued to Nevada homeowners in September of 2011.  In October there were just over 600.  The foreclosure auction market dried up literally overnight and investors were left scratching their heads as supply suddenly disappeared.

But I have learned over my many years as a real estate investor myself, that behind every disaster is an opportunity.  I’ve spent the last several months searching for this opportunity for myself and my investor clients and I’ve just recently found it.

The Silver Lining

Nevada is currently home to over 2,000 common interest communities or HOAs as they are commonly known.  These HOAs charge fees to homeowners within their communities for the upkeep of common areas (pools, parks, club houses, etc.) as well as landscaping and, in many cases, certain utilities like water, trash or cable TV.  As you have no doubt seen in the news, many of these HOAs have been hit very hard by the recent recession as homeowners cease paying their mortgages and, with them, their HOA dues.  This has resulted in the default of several HOAs who can no longer afford to meet their monthly expenses.  This, in turn, impacts communities and their basic standards of living.




Under NRS 116, which relates to common interest ownership, HOAs actually have the power to foreclose on properties for unpaid HOA assessments.  In this statute, HOAS are provided a 9 month “super-priority” that allows them to lien AHEAD of the first mortgage when a house enters foreclosure.  This means that debts to the HOA are not erased when a home is foreclosed upon, and whomever is the new owner of record is responsible for paying 9 months worth of dues to the HOA.

Because of this, many banks that are in possession of large portfolios of foreclosed homes are failing to pay assessments, many even failing to record title to the foreclosed homes in order to avoid accruing HOA fees and transfer taxes.  Some HOAs have authorized their collection agencies to initiate foreclosure actions against HOA member properties in order to recoup their unpaid assessments.  However, most HOAs do not allow the foreclosure to actually occur and, instead, cancel the trustees’ sale on the scheduled day in order to not empty more homes in their communities which are often already struggling with vacant properties.  As a result, HOAs with first position liens are starved for cash but unwilling to execute foreclosures.  This is where the opportunity comes in.

I have begun working with a new corporation formed for the express purpose of helping HOAs to collect the monies due to them, allowing them to function properly and maintain living conditions in their neighborhoods, while also providing members in the LLC with astounding returns on their investments.

This LLC is currently approaching home owners’ associations across Las Vegas and Nevada and offering to purchase their receivables at a fair discount.  This LLC then “steps in the shoes” of the HOA as owners of the receivables and assumes not only the receivables, but also all the claims of the HOAs.

There are now two possible outcomes to the situation.  First, the homeowners could pay the assessed dues.  In this case, the LLC will, at minimum, double their investment.  Second, the homeowners could choose not to pay their assessed dues.  In this case, the LLC can foreclose and take title for possession of the property.  At that point, the LLC would immediately lease the property for cash flow to recover the initial purchase price of the receivable including any property rehabilitation costs.  Concurrently, the LLC would move quickly to quash any outstanding liens on the property and clear any cloud to title; including any first mortgages if they exist.  Bank owned properties that are acquired will be clear of any liens. If the title is obtained
through a judicial procedure, the LLC will own clear title to the property for less than $10,000.
If title is not obtained, the LLC will realize sufficient cash flow to recover the purchase price and
any rehabilitation costs as well as a return on investment.  We are projecting significant returns for members through these two courses of action.

This LLC is being formed to capitalize on an anomoly...a perfect storm if you will.  This is not intended to be a long term course of action.  The company will take advantage of the unique opportunities that currently exist and turn a profit for as long as the scenario is workable.

If you are interested in learning more about this opportunity, please contact Glenn Plantone as soon as possible for a complete, confidential executive summary.