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

MGM Signature Hotel Condos 4th Quarter 2010 Update

Fourth quarter sales for 2010 at the MGM Signature Hotel were a bit of an anomaly. Sales of any real estate product are always lower in the first and last quarters of the year than the second and third, however I did expect increasing foreclosure rates to drive sales numbers higher than usual in the last part of 2010. What happened instead, was yet another foreclosure stall in the wake of the Bank of America robo-signing fiasco. With foreclosures slowing to a trickle, the inventory of bargain priced units in the MGM Signature complex dwindled considerably. This created an interesting paradigm in which sales volume and average sales price dipped in the final quarter, but lack of new foreclosure inventory created a new framework for sales expectations moving forward into 2011.

More specifically: The 4th quarter of 2010 saw the fewest number of one-bedroom sales in well over a year at only 15 units. The average price for a one-bedroom MGM Signature unit (847-874 sq. ft.) in the 4th quarter was $218,000...well down from the 3rd quarter average of $227,000. The average price for a studio unit (520 sq. ft.) was $151,000 down from the third quarter average of $155,000. Sales on studios (also referred to as junior suites) was down to 48 units from the third quarter volume of 53 units.

What is extremely interesting however, is that although sales volume was down in the 4th quarter...new listings were down even more. At the close of the third quarter, there were 73 units listed for sale at the MGM Signature Hotel Condo. By the close of the fourth quarter, there were only 55 units listed for sale. This is a drop of 25%. Also interesting to note is that the percentage of listings that are conventional (as opposed to short sales or foreclosures) is climbing as well (usually a sign that precedes price recovery). At the end of the third quarter, 40% of the units listed for sale in the MGM Signature complex were short sales or REO properties. At the close of the fourth quarter, that number dropped to 22%.

It’s tough to say exactly where things will go from here at the MGM Signature. If inventory remains as light as it is now, I believe that we will see prices begin to steadily climb. However, if foreclosures accelerate in 2011, we may continue to see some deals holding prices steady. I continue to believe that we have bottomed out on prices at the MGM and that we will hold reasonably steady or begin to climb. It is a great time to purchase an investment or second home property at the MGM Signature...both interest rates and prices really have no where to go but up.

I was the second biggest mover of MGM units in 2010 and the fourth busiest buyers’ agent in all of Las Vegas. If you are interested in purchasing a unit (or a fractional share of a unit) at the MGM, please contact me for more information on the property and all your available options.

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

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

MGM 3rd Quarter 2010

The third quarter of 2010 has officially ended and it’s time to take stock of recent developments at the MGM Signature Hotel/Condo project. I have been following this particular property for over two years and have published a quarterly update throughout that time. This quarter is particularly noteworthy as it has brought the opportunity for fractional ownership in the MGM Signature towers for the first time in the history of the development. (More on that later in this article.)

Beginning with the sales data: In my second quarter, 2010 MGM update, published on my blog August 17th, 2010, I stated, “I am ready to go on record at this point and say that we have seen the bottom of this market as far as pricing on MGM Signature units is concerned...demand has accelerated so steadily for these units that I believe demand is now outpacing supply.” This prediction has certainly come true. In the third quarter, we watched sales of one bedroom units increase slightly from 24 units in the second quarter to 26 units in the third quarter...but the significant change came in the average price per unit sold. In the second quarter of 2010, the average one bedroom unit at the MGM Signature sold for $218,000. During the third quarter, this price went up substantially to $227,000. Another telling statistic is the decline in the number of one bedroom units selling under $200,000 (6 units in the third quarter, down from 9 in the second.) As this article goes to press, there are no listings for one bedrooms under $200,000.

Although the average price for a studio unit in the third quarter remained steady at $155,000, we saw yet another sharp increase in sales volume. 53 studio units (sometimes referred to as junior suites) closed in the third quarter, up from 41 units in the second quarter, which was already up substantially from 36 units in the first quarter of 2010.

There are currently zero bank-owned REO units of either type available for sale at the Signature towers. There are 5 short sales available for one bedrooms and 24 short sale studios listed. The remaining 11 one bedroom and 33 studio listings are regular re-sales.

As I stated at the end of the second quarter, demand is now exceeding supply at the MGM Signature. If you are at all interested in investing in this property, now is a great time to do it. I track all four possible methods of acquiring a unit (short sales, REOs, re-sale, and units purchased directly from the trustees’ sale) in order to get my investors the best possible entry price into the property. As a result, I currently have the lowest priced strip-side studio unit available in the entire property. It is priced at $144,000. (Contact me if you are interested.)

Another option we have just put in place is for those of my clients who have expressed an interest in owning a portion of an MGM unit that they can use for vacations, etc. We have just put together a fractional ownership plan that works perfectly for those who want to invest a lot less money and still control a four week block of time at the MGM Signature. We are currently offering fractional options on two different units. The fractional shares sell for $14,995 and include all maintenance fees and HOA dues for the first year. Each share is entitled to four, separate, full weeks of use of a strip-side unit with balcony. Investors who do not wish to use the unit for the entire share can place the unit in the rental pool and earn revenues on the room for any un-used nights.

If you are interested in purchasing a unit, or a fractional share of a unit, at the MGM Signature Hotel/Condo, please contact me for more details. I have specialized in this property for years and would love to help you acquire a piece of the Strip.

Glenn Plantone
(702) 769-9872
gsplantone@gmail.com

MGM Signature Towers is Offering Fractional Ownership Opportunities For the First Time!

MGM Signature Towers is Offering Fractional Ownership Opportunities For the First Time!

Many of my regular readers know that I have been covering the MGM Signature Towers property for a few years now. I have watched as the project was built and the new units sold for between $480K and over $1 million. I covered the decline of unit values as the bubble burst and prices plummeted to 30% of their original highs. Now, I am excited to offer a first-ever opportunity for the MGM Signature...fractional ownership.

Many of my clients have expressed to me their desire to enjoy the privileges of MGM Signature ownership but have not wanted to pay the $150,000 + price tag (in cash) necessary to acquire a strip-side, balcony unit at today’s new, low prices. In response to this demand, Greg Darroch and I have developed a fractional ownership plan that allows participants to control 30 days (one full month) of ownership in an MGM Signature, strip-side, balcony unit for only $17,995. During the 30 days of owner time, owners can stay at the property themselves, have friends and family come to visit, use the property to entertain business associates, or keep the unit in the rental program and earn nightly income.

We currently have available two side-by-side, connecting studio (junior suite) units, each with a strip side view and a balcony. There are a total of 24 fractional ownership shares available, as we will have 12 ownership shares per unit. Those who are interested can also purchase one share of each unit. Those who choose to do this, will be allowed to secure the same time blocks on both units so that they can use them together when they visit. Each studio unit sleeps 4 people, so having two connecting units provides a sleeping capacity of 8.

We are currently taking reservations for shares of these units. If you are interested, please contact Glenn Plantone for more information.

Glenn Plantone
Wynn Realty Group
Office: (702) 656-3264
Mobile: (702) 769-9872
Email: gsplantone@gmail.com

www.viewpointequity.com

MGM Signature Towers Second Quarter Update

I have fielded several requests recently from those who follow my regular blog and email updates on the MGM Signature Towers, for sales information from the second quarter of 2010. Those numbers have arrived and I’d like to share them with you.

Sales volume showed a marked increase in the second quarter of 2010 (April 1st - June 30th, 2010.) 41 studios sold in the second quarter, as opposed to 36 in the first quarter of this year. But, more impressively, one-bedroom sales doubled quarter over quarter with 24 one-bedrooms closing in the second quarter of 2010 as opposed to 12 in the first.

While median sales prices for both studios and one-bedrooms crept down marginally in the second quarter, I noticed that demand began to increase dramatically for these properties and, towards the end of the quarter, I was having to fight against a lot of competition to secure bargain priced units for my clients.

The average price for the 41 studio units that sold this quarter was $155,000. This is slightly lower than first quarter’s average price of $160,000. The high selling price for all studios was a strip side penthouse unit with a balcony (125-3015) that closed for $210,000. The lowest priced studio this quarter was a low floor strip side unit with no balcony that sold for $100,000 (145-403). The highest priced sale of units that have no balcony was unit 135-3403 that sold for $189,888 and the highest mountain side unit to sell was unit 145-1406 that sold for $160,000.

For those of you looking to invest or purchase at the MGM Signature, it is important to note that Strip side units usually sell for a $20K - $30K premium over mountain side units, and units with a balcony typically sell for higher prices than those without a balcony by about the same margin. Conversely, studio units with a balcony do experience a higher occupancy rate in the rental pool than those without.

For the 24 one-bedroom units that sold in the second quarter of 2010, the average price was $218,000, this is down $11,000 from the first quarter average of $229,000. The top selling one-bedroom unit was a strip side, penthouse unit (135-3401...if you are interested, I have a similar penthouse unit available right now) and the lowest seller was a low floor, mountain side, interior unit with a terrible view (145-208.) All one-bedroom units have balconies.

As I look at the current inventory of MGM Signature properties, there are 17 one-bedrooms listed. Of these, there are zero REO (foreclosure) listings, 4 short sales, and 13 regular listings. There are 58 studios listed for sale: 1 REO, 23 short sales and 34 regular listings.

I am ready to go on record at this point and say that we have seen the bottom of this market as far as pricing on MGM Signature units is concerned. I do believe that there will be a lot more foreclosures in these buildings, but the demand has accelerated so steadily for these units that I believe demand is now outpacing supply. In the final month of this quarter, we began to see prices creeping upward a bit. I am also noticing as I negotiate for my clients in the “front lines” of these transactions, that it is getting harder and harder for me to secure good units at great prices for my investors because the competition is becoming quite fierce.

As always, I will continue to keep a close watch on sales trends here at the MGM Signature Towers in Las Vegas. Please follow my blog or subscribe to my regular newsletters if you would like to continue to learn more about this project. If you have any questions about the MGM Signature Towers, or are interested in looking at units for investment or personal use, please don’t hesitate to contact me. I have lots of good information on occupancy numbers, proformas, rental info and the like and will be happy to help you.

Glenn Plantone
702-769-9872
gsplantone@gmail.com

Review of My Stay at the MGM Signature Towers Hotel-Condo

Over the last year I have sold several units at the MGM Signature Condo Hotel, and I decided it was time to experience the property myself from a guest’s point of view. As a result, this past Memorial Day Weekend, my family and I made the long journey to the Strip area from our home in North Las Vegas (about 20 minutes away.) With my wife, and two younger sons (ages 9 and 7), I checked into the MGM Signature on Saturday afternoon to a full house.

From the time we entered the property through the guard-gated entrance off of Harmon Avenue, pulled up to valet parking, and made our way to the individualized owner check-in inside of building 2, the feeling was that we were entering a high-end hotel. The service from the check-in personnel and the bellman bringing up our bags was excellent as expected. Our room was in the middle of the three buildings on the 6th floor - strip side with a balcony. Only about 1/3 of all studio units have a balcony. Units with balconies have higher occupancy rates in the rental pool than non-balcony units. As a result, balcony strip side studios will actually cash flow for investors that are purchasing them at today's new, low prices. The view was outstanding. We felt like we were right on top of the pool with a terrific strip view of the City Center just ahead. Later in the evening, as the sun sank behind the mountains, the lights from the strip and the pool area below were fantastic.

The boys slept comfortably on the pullout couch and my wife and I enjoyed the comfort of the main bed. Any noises from down below were drowned out by the a/c and double paned windows. With a mini-fridge, microwave, cook top, and full kitchenette we were able to bring our own food and drink, enabling us to be very comfortable in our home away from home. The boys really got a kick out of the television and phone in the bathroom, and I appreciated the DVD player that allowed us to watch our own movies instead of paying for an "all too expensive" in-house movie rental.

Many weekends a year, the MGM Signature Hotel sells out and Memorial Day, 2010 was no exception. Typical room rates are $149 for a studio unit and $199 for the larger one bedroom units. After having sold for an average price of $495K (studio) and $795K (one bedroom) just 3 years ago, prices have now come down to a very reasonable $100-200K for studios and $160-$250K for one bedroom units. The MGM Hotel Management Group is one of the many options that investors can use to manage their unit while they live their lives. As an owner, investors can come and stay in the unit as often as they like for a very minimal cost (room cleaning) and keep it in the rental program the rest of the time. (The MGM Management Group will charge 40% of the room revenue to manage the room.) Since the units that are being sold at the moment are usually foreclosures and therefore all-cash purchases, I am seeing a lot of groups of friends and investors pooling their money together in order to purchase a unit. This way, they can all use the property whenever they vacation in Las Vegas and can still share in the positive cash flow and future appreciation of the unit.

As an early riser, it was fun to watch the partiers straggle in at 4-6 am as I leaned over my balcony. We hit the gym at 7am both mornings, and shared one of the two massive onsite fitness centers with only about 10 other people. The fitness center boasted state-of-the-art equipment, including televisions that made my workout fly by. There is also a Starbucks, deli, gift store, computer center, concierge, lounge, and mail room all on site. In fact, I am told by the owners office that about 15% of the hotel condo is occupied by full time residents. All three of the towers are connected and it is only a short walk to the MGM Hotel via a long air conditioned corridor.

Each of the three buildings has its own pool or guests can enjoy the use of the main MGM pool that sits right behind the first building. The towers were built from 2005 to 2007 and have a terrific location just one block off the Strip. It is away from the hustle and bustle, but still only a 10-15 minute walk to the center of the Strip. On Sunday, we walked up Harmon to the Miracle Mile Mall for the Sushi Buffet at Todai. Afterwards, we walked the Mall, enjoyed a family massage at one of the stores, then headed up the strip to the Bellagio to catch one of the wonderful water, music, and light shows that run every 15 minutes.

On Sunday afternoon, we laid out by the pool for about four hours with the kids. I was able to catch some rays, catch up on some reading and spend some quality time in the pool with the boys. Pools two and three are connected and pool two (the one down below our room) is heated and open year-round along with the hot tub.

We checked out on Monday around 12 noon and made our way back up the 15 freeway to our home in the north. It was very nice to experience the Signature from the perspective of a guest and, as an owner, it only cost me the $35 cleaning fee for our two day stay. We are sold. It sure beats a time share.

I have the distinction of having sold the least expensive unit in the complex (a Strip side studio at only $99,900). I have been buying and selling at the Signature for over a year now. I write frequent articles and blogs about the MGM Signature and Las Vegas real estate in general. If you would like to learn more about the MGM Signature Condo Hotel or are interested in Las Vegas investment real estate with strong positive cash flow, please feel free to contact me to learn more.

Glenn Plantone
(702)769-9872 or gsplantone@gmail.com

Short Sales Continue to Rise at MGM Signature Towers

As a licensed Realtor here in Las Vegas, over the last three years I have followed the sales trends at the MGM Signature Hotel Condo very closely. (I have also sold 15 units over that time period.) I have also written and published several articles geared primarily towards investors looking to purchase MGM units at today’s new, low prices. This article is directed more towards the original owners who purchased properties at the height of the market and are now finding themselves upside down in their units. In this article, I will offer information on current market statistics and what options may be available to MGM Signature owners going forward.


As you are probably aware, since the MGM property auction of April, 2009, prices have been dropping dramatically. In the first quarter of 2010 (Jan 1st to March 31st), we saw 18 one bedroom units at the MGM Signature sold through the multiple listing service. Unit 125-714 established a new, low price for one bedrooms at $165,000. This same unit had sold new in 2007 for $705,000. That means the new sales price was roughly 24 cents on the dollar. During the first quarter, the highest sale price for a one bedroom was $271,000. These sales statistics do not include cash deals at the trustee sale.


Studios at the MGM Signature in the first quarter of this year sold for prices ranging from $114,000 to $218,000. Unit 125-205 is a low floor, strip side studio unit with a patio that sold new for $485,000. It sold this quarter for $114,000. (Also approximately 24 cents on the dollar.) The good news for new investors is that studios can actually cash flow at these lows. One bedrooms are still not cash flowing, even at the new lows, because of their higher HOA dues. This is the reason why we are seeing the studios in the MGM towers selling for a higher price per square foot than the one bedroom units.


Since the beginning of 2009, when we began to see foreclosures mounting at the MGM Signature, there have been a total of 168 studios and 67 one bedroom units foreclosed upon and resold within the 1728 unit complex. This represents about 14% of the total complex. I believe that we will continue to see distressed sales on MGM Signature properties since virtually every original investor is upside down and very few paid cash for their entire investment. However, I do believe that the nature of those distressed sales is changing in a very significant way.


As of this writing, there is only one bank owned REO foreclosure unit in the entire project. This is because foreclosures are slowing dramatically and being replaced by short sales. There are a total of 41 units currently listed for short sale. Because of the government’s push to get short sales approved and accepted, they have picked up dramatically in the Las Vegas market. Last year short sales amounted to 8% of all sales while REOs accounted for about 75%. Already this year, short sales have risen to 25% of all sales while REOs have dropped to 50%. At this rate, I project that we will see a total switch of REOs and short sales by the end of the year.


There is a huge advantage to having your unit go through a short sale vs. a foreclosure. Credit experts tell me that a foreclosure will generate a 200 point hit to your credit report as opposed to an average of near 50 points with a short sale. Also, if you work with a seasoned Realtor and they are able to successfully negotiate a short sale that eliminates a deficiency judgment, you do not have to worry about the bank coming after you for the difference between what you owe and what the property fetches at the foreclosure auction.


Most analysts feel that we are in for a long ride before property values are anywhere close to the levels of 2007. At the April meeting of the Real Estate Insiders Club here in Las Vegas, Mary Riddel, Associate Professor of Economics at UNLV, made it clear that she believes we are in for about 8-12 years before we see any substantial appreciation in real estate values in the Las Vegas Market.


So, if you are an upside down MGM Signature owner, what are your options?


Keep in mind that I am not an Attorney, CPA, or Investment Advisor and I do suggest that you seek legal, professional counsel before deciding how to proceed. My goal here is to give you some general outlines and to summarize your present options.


Hang On: If you can, this will preserve your credit. In considering this option though, you need to determine if you can afford negative cash flow from your unit over the next 10 years or longer until values rise to more than the amount that you owe and/or cash flow becomes greater than your costs of ownership.


Foreclosure: Most likely your worst option of the bunch. If you stop making payments on your unit, the bank will eventually auction off the property and take it away. This will hurt your credit tremendously and stay on your credit report for up to 7 years. You will also be vulnerable to a deficiency judgment.


Deed in Lieu of Foreclosure: Just turn the keys into the bank and be done with it. This will immediately release you from most of your personal indebtedness associated with the defaulted loan, however you will still be vulnerable to a deficiency judgment. A deed in lieu will hurt your credit a little less than an actual foreclosure but far more than a short sale.


Short Sale: More and more property owners are now looking at this option. With an experienced Realtor, you have a good chance of being able to successfully navigate the short sale process and sell your property to the new investors now coming in. However, if you inadvertently hire an inexperienced representative, you may very well find your unit foreclosed upon before you are able to get a short sale approved by the bank and sold to a buyer.


If you are considering short selling your MGM Signature unit, I would love to discuss your options with you. I specialize in both the MGM Towers and short sales. I am currently successfully negotiating 5-7 short sales per month and we are seeing bank approvals coming in at a much faster clip in the last few months.


Please feel free to contact me should you have any questions at all about the market, and/or the process for properly handling your unit.


Glenn Plantone

(702) 769-9872 or gsplantone@gmail.com

MGM Update January 2010

As those of you who follow my articles and blogs know, I have been tracking the MGM Signature Towers Hotel Condo in Las Vegas very closely over the last year. Many of my investors have asked me to write an update on the project. Here is the most recent information on price and sales trends from the beginning of last year (2009) to the start of this year (2010).

The MGM Signature is a Hotel Condo complex consisting of three high rise buildings that were completed in 2006. This makes it one of the few Las Vegas high rise condo projects that was completely finished and sold at boom prices. All three buildings (576 units per building) totaling 1728 total units were sold before the real estate bubble burst in 2007. In 2006 an average studio unit (520 sq. feet) sold brand new for $485,000 and an average one bedroom unit (874 sq feet) sold for $745,000. The least expensive studio sold originally for $318,250 and the least expensive one bedroom was sold for $494,000. Most were financed with 20% to 30% down and there were very few cash sales.

The MGM now represents a unique buying opportunity for investors as the real estate crash has sent prices tumbling to between $0.20 and $0.25 on the dollar from their original sales prices only four years ago. By the end of 2009, we were seeing several studios selling in the $120,000 range and one bedrooms in the $180-$190,000’s. I have followed the project since the prices started falling in 2007 and by 2009 I was ready to recommend the project to my investor clients. I continue to work hard to find units for my clients and the lowest possible prices and because of my experience and knowledge of the project, I have the distinction of having negotiated the lowest purchase prices for both a studio ($99,900 at the end of 2009) and a one bedroom unit ($176K for a beautiful 8th floor pool and mountain view just one week ago.)

In 2008 we saw very few foreclosures and very few resales on the MGM properties. That changed dramatically in 2009. Last year there were over 220 studios and 90 one bedroom units that were foreclosed upon. This figure represents about 18% of the total project. By comparison, other condo projects in Las Vegas experienced foreclosure rates as high as 35% in 2009. I believe that we will see an avalanche of foreclosures on the MGM Signature properties in 2010. Normally, this wave of foreclosures would mean even lower unit prices to come. But I think the heavy demand for the MGM Signature units will keep prices stable throughout 2010. Because the prices have dropped so steeply, the properties are now able to generate positive cash flow. This is keeping demand extremely high for the few available units that come onto the market. We have run into multiple offer situations for all of the foreclosure units that have come onto the market over the last several months.

The MGM Signature was built and marketed as a hotel-condo, as such, it offers tremendous flexibility. You are able to live in the unit full time if you desire, rent it out independently to a long term tenant, lease it out for short term nightly rentals and manage it yourself, or place it with a management company who will handle short term nightly rentals for you and split the revenue with you. Using a management company is the most popular choice for most investors. With sufficient notice, you are able to stay in your own unit as often as you like with minimal cleaning costs if you choose to have the room serviced by your management company. Most investors use the MGM Hotel Residential Services Company as their management company, but many do not realize that there are three other companies that provide excellent service, some with higher occupancy and in most cases better revenue splits for the investor. This, of course, could mean a higher cash flow on your investment. I have a detailed analysis of the similarities and differences between the four companies if you should desire to compare them. (Contact me if you would like to receive a copy of this comparison.)

Currently, there are four ways to buy a unit at the MGM Signature. The first is to buy a resale unit. I don't recommend this method. Resale units are either units that have been bought by other investors at cheaper prices and are now being resold or units where the owners are desperately trying to lose as little money as possible on the sale.

The second method is to purchase a short sale. The short sale route is long and tedious but we have had some success. We tie up the unit at a good low price and wait and hope that the negotiator is able to get an approval from the bank before the unit is sold off at the foreclosure auction. I have had a couple of short sales that have ended with a successful purchase and lost a couple to the foreclosure auction.

The third way to acquire MGM Signature units, is to buy a bank owned foreclosure property (an REO.) This is a great method and the most common way I use to acquire properties for my investor clients. We are able to get a good look at the unit, get good clean title, and have the purchase of the unit done safely and easily. Because of my contacts with the various listing brokers I have been able to develop great relationships and purchase many units for my investors at the best possible prices.

The final way to acquire units, is to buy them at the foreclosure auction (trustee's sale) before they return to the bank and become an REO. This method has its risks but with proper due diligence it represents the absolute best way to get the lowest price possible.

I have been very successful in purchasing Signature units for my investors because I have been attacking this project from all three sides.

I highly recommend that anyone interested in the MGM Signature come and stay at the hotel-condo and visit with me so that you can gain a clear understanding of all the variables that are involved in this project. We can tour the property, talk about and meet with the management companies, look at the one bedroom vs. the studio units, discuss the psychology of views (strip side vs. mountain side) and get a general overall understanding of the property.

I will be following the MGM Signature Towers very closely this year as I project it will be a great time to pick up units at prices well below the developers cost to build. Feel free to contact me directly should you have any questions or interest. May we all have a great 2010.

Thanks

Glenn Plantone

702.769.9872 (cell)

teamplantone@gmail.com

2009 In Review

2009 was a year of expectations and a year of hopes.  Some of these were met, some were exceeded, and others will wait and continue to seek fulfillment in 2010.  We all knew that the foreclosure wave would continue to sweep over the nation’s beleaguered real estate markets.  And it did.  Las Vegas once again led the United States in foreclosures as more bank owned properties than ever flooded the market.  We hoped that this influx of affordable properties would lure some investors back into the stagnant Las Vegas real estate market.  But no one expected just how tantalizing that lure would be.  As investors from California, Canada, and all over the world sought to purchase cheap Las Vegas real estate that was suddenly cash flowing positively for the first time in years, home sales in the valley boomed.  Throughout the summer of 2009, Las Vegas posted sales numbers that exceeded those of the boom years in 2003 and 2004.  As quickly as foreclosures re-entered the market, they were gobbled up in their REO form by eager investors cashing in on what had become the greatest real estate buying opportunity of our lifetime. 

And we all hoped that this re-energizing of the real estate market would spread to the economy at large.  It didn’t.  To spite the high hopes of many generated by the seemingly endless stream of economic stimulus packages introduced by the new Presidential administration, an economic recovery failed to materialize and December saw some of the worst unemployment statistics since the recession began.

And yet, this bad news for the economy at large, may translate into good news for investors looking to purchase real estate in 2010. Normally, the excess of demand that we have been seeing in the Las Vegas market would push real estate prices higher.  But the general economic downturn may curb those price hikes and keep properties in Las Vegas at their historically affordable levels through the next year.  Especially for those willing to acquire properties through the trustee sale, properties that need a little work, or unconventional properties like high rise condos. 

As the supply of turn key, single family REOs has dwindled over the latter half of the year, my investors have found that the best way to acquire profitable real estate in Las Vegas is to think outside the “herd.”  We have been investing with great success in properties purchased through the trustee sale auction, high rise properties like the MGM Signature Condos, and properties that are not “turn key” such as “stripped” foreclosure homes.  Since the vast majority of investors are not purchasing these types of properties, we are able to continue to get great deals on investments that will generate strong positive cash flow.

I look forward to 2010 as a year that will continue to allow my clients to purchase Las Vegas real estate at deeply discounted properties.  Hopefully, the nation’s job, credit, and financial markets will begin a steady recovery and everyone can begin to benefit again from a robust economy.  Until then, we are wise to once again remember the words of the great financial giant Baron Rothschild who made his fortune largely during the years of the Great Depression, he said, “Buy when there is blood in the streets...even if the blood is your own.”  Now is truly the time to take advantage of every opportunity to create wealth for our future. 

If you are interested in taking advantage of this historic opportunity to purchase great Las Vegas real estate, contact Glenn Plantone at 702-769-9872.

Latest Update-MGM Signature Towers

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

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


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

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

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

Update on MGM Signature Towers

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

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

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

MGM Auction Sets New Low Comps for Signature Towers

I recently attended the public auction held to sell 20 units in the three MGM Signature towers located just off the Las Vegas strip. The auction was held on April 21st and was attended by about 125 people. All units were sold.

MGM has been forced to clamor for capital since its flagship project, the record setting City Center development in Las Vegas, ran into funding difficulties and innumerable construction setbacks and delays. MGM's major financial partner in the deal, Dubai World, announced that they would not honor their obligations to the project. This announcement brought the already struggling MGM Mirage corporation to the edge of Chapter 11 bankruptcy filings as they struggled to find alternative financing. MGM Mirage has financial covenants due to expire on April 29th and May 15th. There has been speculation that they may need to sell off some major assets, such as the Beau Rivage in Mississippi or the MGM Grand Detroit. Just recently, however, investor Carl Icahn and private equity fund Oaktree Capital Management have stepped up and acquired hundreds of millions of MGM Mirage bonds. Should this deal go through it might save MGM Mirage from having to sell further assets in order to stay afloat.

In the meantime, MGM's loss was investors gain in the Las Vegas condo market. The auction saw new record low sales prices for both one bedroom and studio units in the MGM Signature complex. The top one bedroom sold for $255K and the low sold for $185K. The previous low comp for a one bedroom unit was $274K. So this sale brought the comp down quite a bit from $274K to $185K. The top studio unit sold for $200K and the low sold for $142K. The previous low comp was $174K. So again the comp came down from $174K to a new low of $142K.

It will take approximately one month for these units to officially close and for the new lower comps to register in the MLS. There are still 24 REO/bank owned units available within the Signature towers. Once the new comps register, there will be another great buying opportunity for anyone still interested. I will then be advising my investors to put in some cash offers for lower than the new low comp prices and test the waters.

This MGM auction, and others that are coming up shortly at different locations, are proving that high rise prices in Las Vegas are finally coming down to levels where they are extremely affordable as a second/vacation home option and even as an investment. If you have any interest in the MGM Signature condos or other high rise properties please feel free to give me a call to discuss your options.