patrick.net

Dang, so what you're sayin' is the banks are going to laugh at my paltry 20% down, and snub their noses at me? Funny how I assumed I could get financing...

Monkeyswing,
Your complex would be disqualified under Freddie/Fannie guidelines, which are the rules for conventional lenders:

http://library.hsh.com/articles/first-time-homebuyers/how-to-finance-a-condo-purchase.html

That doesn't mean you CAN'T get financing. You might find someone to do it, but that guy might break your leg if you don't pay up.

Can you rent there for a year? See how it goes?

Regarding whether/when Vegas will go up: Check out irvinehousingblog.com. The guy invests in Vegas properties.

Paul gets elected? LOL!!

happyvagrant says

930 a month in HOA dues? What does this condo have? I mean for 500k, you could probably get a spectacular house in las Vegas-minus the HOA dues.

That's higher than the HOA my friend pays for her Kauai beachfront condo!

Monkey - you can get sweeping views of Vegas if you buy a repo in the Summerlin area - and you're not going to be paying $900/mo in HOA's. Better area, altho not as close to the strip. But unless that's near your work, why the hell would you want to live close to the strip?

IMHO the reason the luxury high rises are experiencing such high vacancy rates is because they're not worth it. Even tho the RJ predicts a change for the better, the jobs simply aren't there.

By the way, Vegas isn't running out of water (unless Lake Mead completely dries up); it's running out of water for expansion. There's enough water to sustain the area if it doesn't attempt to regain the massive growth of the past decade(s). With all the empty houses, it's doubtful that will happen in the near future.

Buy a house and expect to lose some value. Hire a housekeeper & pool boy and you'll still come out ahead. And call me so I can come over and swim. ;)

StoutFiles says

Vegas will be out of water soon.

Yep.
http://www.lasvegassun.com/news/topics/water/

B.A.C.A.H: Thanks for the video link. Jeez! So, it sounds to me that if even if Vegas curbs its water needs now and stops growth (which it has, basically) it will STILL be facing major water shortages in the future when Lake Mead succumbs to climate change. Wouldn't that make it a very dangerous place to invest?

Ellimae: I work at the Mirage, so yeah it's convenient to live close to work, although life in Summerlin would be way nicer. Would love to be close to Whole Foods and Red Rocks. Plus if you just walk a block east from Turnberry you'll be accosted by transvestite prostitutes. They're pretty harmless, though. Hehe

033: I'll have to check with the building agent about financing. I seem to remember the her saying the west building was purchased from the original investors by an "investment group" and that they were offering financing... Have to check on that. Curious if that's the case and what kind of interest rate they might be offering.

Also, I'm spending my first night there tonight as I decided to rent for 9 months. Couldn't resist. Ha!

Monkeyswing says

Is it smart to buy a luxury condo in Vegas?

That's the real question

The rest is just details.

Monkeyswing says

I work at the Mirage, so yeah it's convenient to live close to work, although life in Summerlin would be way nicer

I love the "Love" show at Mirage. Beatles music and circus resonates with half the world. This would be a hit for 5 years.

Having said that, I think the better bet would be to buy something in city center, MGM signature and one-0ff condos there. They are the ones that folks from the U emigrates and abu dahbi and China will buy first. Tourism in Las Vegas is back somewhat in 2011.

If you intend to live there for 5 years, calculate what would be your investment to rent vs buy over that time.

Just for comparison sake, I bought my place in the East Bay Area for $405K. I put 20% down and have a monthly mortgage of about $2200/month with HOAs. I'm ignoring property tax since it off-sets what I get back from paying interest on the loan.

I could have rented the same place for $1500/month.

After 4 years, I have invested $187K to live in my condo. I could have had exactly the same thing for $72000 if I rented.

So what does that leave on the table for you? Well, it leaves spuculation that you will have equity in the house for it to make sense for you to do.

It's doubtful that you will gain any significant equity in a LV condo over the next 5yrs. Many here will probably argue that you will lose equity over that time (unless you get in very low).

Unless you are planning on holding this house for much longer than 5yrs, I would rent. Furthermore, I would not touch a LV condo with a 10ft pole.

Best of luck.

My thought is, 500K with $900 HOA is 'high end'. My question would be is 500K a good price? What did the others pay? (Maybe it's on propertyshark.com.) Yes, it's a bit apples and oranges, and believe me I did not seek out this comparision but in this media I learned a certain celebrity bought a house in 2005 for 9 million and is now trying to sell at 13.5 million. I won't post it, but the last sale record, the square footage, and the prices match. The current asking price for square foot is $3,588. The point of this comparision is that I think it is ludicrous someone wants 50% more right now than in the peak of the bubble, anywhere. What did the developer originally ask for the units? (ok, you found that out on 1, 1.1 million) And just because some are 'listed' for 600 - 700k doesn't mean they will sell and that is the value. Another good point is 30% occupancy is low. What if even 5% of those default? Could be money out of your pocket. I like a condo in Sherman Oaks but I looked up the property records and it 'looks' like someone converted an apartment building because ALL the sales were in 2005 or later for a much higher price. Love the condo, it has views of the Sherman Oaks Hills South of the Boulevard but how many people want to keep paying literally hundreds of thousands dollars more than the propery is worth? ...

LOL Apocalypsefuck, isn't that what I said? I know, I have such a softer tone.

As a financial decision I think that buying what is abundantly available for rent is not always a good idea.

033: Spoke with an agent in the building. Apparently Mutual of Omaha is offering 30 year fixed loans between 4-5% with 20% down.

Good point Clambo, but this view is not abundantly available. Actually, once and if they finish the next 15- 20 stories down an almost identical view WILL be available.

BayArea: You must be in your condo for the long haul given how much cash you could now be holding had you rented. How are you feeling about your purchase?

When I run the numbers for this place, I'm looking at a huge, sickly number per month. 500 purchase price with 20% down at 5% is about 2,150/mo. Add 930 HOA's and from what I can gather from the agent 4,000 year property tax, I'm looking at 3,400/mo. Haha. That's insane.

ApocalypseFuck, you need a radio show or something.

LV is a good buy. There's is an 80% off groupon to all who can get it.

But you have to have a solid what if plan. What if I can't afford to pay mortgage, how quickly will it rent? Your discount of 50% off seems to expensive. It should be 70% or better off 2005 sale price. Don't buy that overpriced view unless you get a better deal. You are gambling at the wrong slot. Better to buy a bunch of small rentals and then take the proceeds to rent that view you love. One day you may want another view.

Killerjane, you're talkin' some good sense!

Thanks to all who've taken a moment to respond. Your insight is very helpful.

You are seriously considering paying $263/sqft for a Las Vegas ---condo--- ? Are you nuts?

It's 30% vacant for a REASON. :) Seriously though... how much do they have in reserves? I would be really careful buying anything in Vegas. I highly doubt their market is at bottom there yet but I could be totally wrong :)

Monkeyswing says

033: Spoke with an agent in the building. Apparently Mutual of Omaha is offering 30 year fixed loans between 4-5% with 20% down.

Good point Clambo, but this view is not abundantly available. Actually, once and if they finish the next 15- 20 stories down an almost identical view WILL be available.

BayArea: You must be in your condo for the long haul given how much cash you could now be holding had you rented. How are you feeling about your purchase?

When I run the numbers for this place, I'm looking at a huge, sickly number per month. 500 purchase price with 20% down at 5% is about 2,150/mo. Add 930 HOA's and from what I can gather from the agent 4,000 year property tax, I'm looking at 3,400/mo. Haha. That's insane.

ApocalypseFuck, you need a radio show or something.

Yep, and now you're at $1,224,000 over 30 yrs not $500,000, and not including the down payment -- so really $1,334,000 or about $702/sq ft.

IMO w/ the view you just see a bunch of gray buildings. Not my style :)

30% occupancy tells me that demand hasn't met supply meaning price needs to shift a lot ;)

GUAB, I guess I should qualify that the view is stunning for Vegas. I would much prefer an ocean view. Just snapped this one. It's an ocean of light!

And yeah, thinking about 30 yrs of interest makes me wanna puke.

I have no idea what they have in reserves...

Monkey,
High-rise taxes on the strip are 1.02-1.05 percent, so is that agent telling you the condo is already at $380,000?
More interesting would be his explanation of how 4-5 percent, 30-year fixed works outside of a developer financing new units.

That view is fabulous, you know the strip better than anyone here, and you really want to live over there. You'd be happy there. Why not rent? If your payment is less than $3,400/month, you're already ahead.

Monkeyswing says

Is it smart to buy a luxury condo in Vegas?

Overall, the answer is YES!!!

http://www.housingbubblebust.com/OFHEO/Major/SouthWest.html

As long as your buying/paying... 1997 prices plus inflation (35%) your pretty much safe. Some downside, but not much...

Lucky for you LV, received enough media coverage that it is impossible for Real Estate Agents to deny impact of housing bubble or cook up stupid reasons why prices should be higher or there are multiple offers on every home, so there is no reason for putting offers over asking.

I would compare the condo you're thinking of purchasing to similarly priced houses in the Vegas area first. No one really knows if those condos are good investments - most likely not - the only banks that lend for condos are the same banks that foreclosed on the buildings.

Monkeyswing says

I work at the Mirage, so yeah it's convenient to live close to work, although life in Summerlin would be way nicer. Would love to be close to Whole Foods and Red Rocks. Plus if you just walk a block east from Turnberry you'll be accosted by transvestite prostitutes. They're pretty harmless, though. Hehe

Straight shot down Desert Inn from Summerlin, 20-25 minutes. I do it often; while the freeway is stop & go.

APOCALYPSEFUCK is Tony Manero says

In 5 or ten years, the casinos will be squatted by neonazi cannibal tribes that will feast on the victims of the total collapse of the US economy who could not escape to less desperate locales. Rich people from the Valley and LA will be flown out in attack helicopters to hunt people from the sky. The Robb Report will recommend neighborhoods where the prey offer an interesting fight but not so much as to be a threat to someone with superior ordnance fighting from a gun ship.

AF, I fall in love with you a little more each day. If I ever meet you I'm bringing pepper spray, tho.

Monkey, you have a lovely view of the Vagrantworld resort. Don't worry about the transvestites - the gangs behind that lovely hotel will get you first.

thomas.wong1986 says

Monkeyswing says

Is it smart to buy a luxury condo in Vegas?

Overall, the answer is YES!!!

http://www.housingbubblebust.com/OFHEO/Major/SouthWest.html

As long as your buying/paying... 1997 prices plus inflation (35%) your pretty much safe. Some downside, but not much...

Lucky for you LV, received enough media coverage that it is impossible for Real Estate Agents to deny impact of housing bubble or cook up stupid reasons why prices should be higher or there are multiple offers on every home, so there is no reason for putting offers over asking.

If there are multiple offers on every property, why is his building 70% vacant if pretty standard financing is available?

Again, there is a good reason the building is only 30% occupied. And that's because prices are far too high. Supply and demand.

If you have no idea what the reserves are and you are seriously considering buying -- you are either very uninformed and shouldn't be buying anyway, or you aren't seriously considering. I assume you're just kind of shooting the idea around though and haven't spent a lot of time on it yet. Reserves and assessment history are one of the first things you check out before anything else.

Is there a risk the builing can be turned into apartments instead of condos?

GUAB, I posted here for exactly this type of critical input. Thanks. When Turnberry Towers EAST hit the market it was 2008 It was mostly pre-sold. From what I understand that building is mired in litigation and really difficult to buy/get financing. I imagine most of the owners are just miserable or washing their hands of it. Turnberry WEST, on the other hand, was born 2nd and for this reason (given its timing in the collapse) hardly sold. Since then, condo prices have sort of stabilized, at least in comparison to losing half their value, the owner declared bankruptcy, and an opportunistic investment group stepped in with plans to finish the building slowly as investors/clients showed interest. So, with regards to assessment, I assume you're talking about the integrity of the building? I'm guessing it's perfect, but I would need to put an offer on it and get an assessor in here to make sure, right? With regards to reserves, are you referring to how much extra cash the HOA's hold? That I don't know and will find out. Yeah, I'm just tossing around the idea, but I'm serious at the same time and want to make an informed decision. I'm also only interested if the owner (private owner not part of the investment group) needs to short sell and I get a super sweet deal on it. I checked history of short sales of comparable units on Zillow and there's only one. 4 stories down. Same floor plan. It sold for 425 a year ago. The owner then furnished it and put it on the market for 680 where it now sits, and that gave me a good belly laugh.

Killerjane, I don't know is there?

Spoke to the manager. Assessment = HOA's. Now I know! And their reserves are very good.

Monkeyswing says

BayArea: You must be in your condo for the long haul given how much cash you could now be holding had you rented. How are you feeling about your purchase?

Are you rubbing it in :-)

To tell you the truth, I needed a place to live back in 2007, found a desirable property in a desirable location close to work and decided to pull the trigger. If I had a crystal ball, obviously I would have rented and bought several years later. The combination of having that much money into a property and no equity to show for is certainly an unsettling feeling.

Many folks out there are either rich or poor due to timing unfortunately.

BayArea, if it makes you feel any better I also bought a property in 2007. Up in Fort Bragg, CA. Paid 349 and now it's worth about 220. But like you, I needed a place for my mom to live and decided to pull the trigger. Stings, but hey, my mom's got a place so it served its purpose. What I wouldn't give for a crystal ball now!

Monkeyswing, good to know I am not alone (obviously given the magnitude of this problem right?)

What also stings is that I am still paying about $750 more per month owning than I would renting today. I can't refi because I already did that once under the HARP plan and I can't short sale since my finances are fine, so that leaves srategic default. Given that I want to be a landlord, that's not exactly possible. Quite the death clench on my balls, lol

Hope that this thread gives you a pretty good idea if you should buy or rent that Vegas condo :-)

no

Oh, that sucks! At least you were able to take advantage of HARP once.

My place up in Mendo has two cabins on it so at least I'm getting some rental income from the property. Mom doesn't contribute. I'm about 800 upside down per month. Sigh.

I'm thinking I should rent for 2012 and see what goes down... This condo poses a lot of risk.

Monkeyswing says

What I wouldn't give for a crystal ball now!

50 comments (although some of them are yours) aren't crystal ball enough?

There are so many cheap houses in Vegas why dont you buy a cheap house with a lot of land so your far enough from your neighbors use the rest of the money to deck the thing out like the Taj Mahal.

much better than renting a crappy apartment, IMO.

OK, I didn't see the view.
The unmentioned reason to have an awesome view is to get chicks.
Having an impressive view is for...impressing impresionable girls. There must be some of them running around in Vegas.
Abalone! Ft Bragg!

Monkey can rent what he desires; it's way cheaper in the long run.