Buying Vegas, One cash-flowing rental at a time

Buying Vegas: Episode Two

Last month, I introduced One Rental at a Time’s Buying Vegas to Zuber Letter subscribers. Episode One of Buying Vegas set the stage as I outlined the goal for the series: While real estate investing is a long (and sometimes boring) game—learning a market, meeting new people, figuring out a buy box, and acquiring cash flow rentals can be exciting. I’m going to show you how, from start to finish. 

Previously, Olivia and I sketched our plan on the whiteboard and shared our initial thoughts on investment opportunities in the Las Vegas real estate market.

While we’ve grown our portfolio significantly since starting our investment journey over two decades ago, we still believe buying and holding four cash-flowing properties is enough to change your life and create wealth.

There are shows for home flippers and day trading—so why aren’t there shows for buying and holding? In short, buy and hold investing isn’t a isn’t a “get rich quick,” method, but it does work.

In Episode Two, Olivia and I begin to implement these plans. We meet up with Joe D (@JoeDLasVegas) and his daughter Emily. Joe has been buying and selling real estate in Vegas for 30 years, so he has the full spectrum of experience in this particular market. 

We ask Joe to help us narrow our search for rental properties with cash flow potential. Joe says we should look at the locations with the highest probability of getting the most tenants i.e. where there is the most job activity.

He outlines a few areas on the Las Vegas map that fit this criteria.  Joe also says people tend to pay more if they buy properties in this area than if they rent, which makes it an attractive region for renters. 

Our conversation left us one step closer to having our Las Vegas buy box. In a later episode, we will get into the nitty-gritty of calculating the cash flow of a prospective property and a step-by-step guide on how to create and monitor your buy box. 

ResiClub chart of the week:

This month, ResiClub’s Lance Lambert did an analysis of July active inventory levels by state. Pointing out that four states’ active inventory levels are now above where they were pre-pandemic: Florida, Texas, Idaho, and Tennessee. 

ResiClub uses new listings as an indicator for potential sales and they use "active listing/months of supply" as a gauge for the housing supply-demand equilibrium.

ResiClub’s take: If active listings start to rapidly increase as homes remain on the market for longer periods, it may indicate potential future pricing weakness. Conversely, a rapid decline in active listings could suggest a market that is heating up.

Number of the week: 9.1

According to U.S. Census and HUD data, we now have 9.1 months of supply of new homes. While this is a statistically correct data point, it is irrelevant to the narrative the crash-bros and doomers are trying to push. 

I feel it is my duty to give you the facts behind this statistic and contextualize it accurately. 

In the new home construction market, “supply” actually includes three subcategories. The doomers and crash-bros won’t tell you this, because if they do, their argument falls apart. Here are the three categories:

1. Completed: If you took the charts and information the doomers are peddling at face value, you would think we have 9.1 months of supply of completed homes. But you would be wrong to think this. In fact, if you look at completed homes—that is, homes that are ready to sell and could be occupied today—we only have 99,000 homes or 1.9 months supply.

2. Under construction: These are homes that are in various states of being built, which in many markets can take anywhere from three to six months to be completed. There are currently 278,000 homes under construction or 5.4 months of supply. This makes sense, as there is a long window to construct a home. Builders are starting to slow-walk these builds as they don’t want a lot of completed inventory at once.

3. Homes not started: This one should make you mad. Yes, in this call of 9.1 months of new home supply, which doomers are using to scare you, they are including homes that have not even started—104,000 homes or two months of supply to be exact. 

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We’re creating more opportunities for you to interact with those who have achieved financial freedom through real estate investing. 

Being surrounded by people at all stages of their real estate investing journey is crucial to your success, and joining us on Skool is an easy way to do just that.

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