Good deals on property in the US (Phoenix / Las Vegas)

[Captain_Obvious]

Just wondering if anyone has any experience / insight at taking advantage of some of the low prices on real estate in the US, particular to Las Vegas / Phoenix.

Both places have an abundance of fairly nice (and some not so nice) properties that are sitting at 70% of the price they were a year or two ago.

I was in Las Vegas last week and looked at several nice Condos in the 30 - 70 thousand dollar range.

Some foreclosures, and one in particular that was listed as a "short sale"

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.[1] It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

Any insights / advice would be appreciated. I am back in Calgary now but will be heading back down to explore a bit more soon.

[Rathji]

What would be the difference with buying a property at 70% value in Phoenix/Vegas and buying one for that here? Other than one being a lot further away.

[Street Pharmacist]

Originally Posted by Rathji

What would be the difference with buying a property at 70% value in Phoenix/Vegas and buying one for that here? Other than one being a lot further away.

Mostly the fact that there are nowhere near the same number of deals available.

Regardless, it's not so simple. Check with a lawyer who specializes in these types of deals before investing. Most states have laws that somewhat discourage foreign property investment by adding extra taxes fees, etc. Also, remember that it must be upkept and check out bylaws to see what is required. Also, foreign investments are taxed differently here in Canada. Message: do your homework and get a professional to help you (lawyer, real estate agent or whatever). A bad $40,000 investment is bad no matter how small and losses could escalate if you can't sell it again.

[Shin Pad]

I bought a place in Phoenix last August. I got a great deal, and I've spent a fair bit of time down there since I bought it (I work out of my home, so I can be anywhere, as long as I have internet access). House prices have more or less stayed the same since I bought, and maybe even moved up a bit, as there are a lot of speculators and Canadians buying properties.

If you are going to buy a place that is a short sale, you have to be patient. When I was buying last August, some houses had multiple offers on them and it took a long time to decide which offers they were going to accept. If you are buying a property through a bank, in which they forclosed on a property, it's hard to do a proper assessment as to the condition of the house, because the utilities are off, and they will not have them turned on so you can make sure everything is working properly. I managed to find one that was being sold by the buyer, so it went smoothly.

When people have had their house forclosed on, sometimes they try and damage the property. I've heard of several cases of people dumping concrete down the toilets. Of course if they aren't used as soon as that happens, the concrete sets in the pipes. Anyway, the point is, make sure you get a good inspection agency to go through the house before you finalize the sale.

Between Vegas and Phoenix, I prefer Phoenix. It's warmer in the winter, and you probably won't be there in the summer when it's 110 deg F or more, anyway. I was in Phoenix for Christmas, and it was warm enough to be in shorts. We went up to Vegas to spend Christmas day, and you needed at least a hoody or light jacket, as it was noticably cooler.

Anyway, if you want a good realtor in Phoenix, PM me - the guy I used is a Canadian, and he was great.

[Shin Pad]

Originally Posted by Street Pharmacist

Mostly the fact that there are nowhere near the same number of deals available.

Regardless, it's not so simple. Check with a lawyer who specializes in these types of deals before investing. Most states have laws that somewhat discourage foreign property investment by adding extra taxes fees, etc. Also, remember that it must be upkept and check out bylaws to see what is required. Also, foreign investments are taxed differently here in Canada. Message: do your homework and get a professional to help you (lawyer, real estate agent or whatever). A bad $40,000 investment is bad no matter how small and losses could escalate if you can't sell it again.

What you say is true. Arizona is a good place to invest because there aren't any extra taxes for foreign property investment. That is why Canadians are flocking to Arizona to buy real estate. That being said, stay away from California or Florida.

[Shin Pad]

Originally Posted by Rathji

What would be the difference with buying a property at 70% value in Phoenix/Vegas and buying one for that here? Other than one being a lot further away.

I don't know of anywhere in Western Canada that you can get a house for the kind of prices they are selling for in Phoenix. Also, where in Canada can you go in the middle of winter, where it is warm enough to wear shorts and T shirts every day. Also, it's only a 2 1/2 hour flight from Calgary.

[oilfan69]

Anyone know of a good site a person can go to look at properties in and around phoenix/vegas? something similar to mls.ca?

[dre]

Originally Posted by oilfan69

Anyone know of a good site a person can go to look at properties in and around phoenix/vegas? something similar to mls.ca?

http://www.realtor.com/?source=web

That is a good one.

[Ice]

My brother just bought a 1650 sq ft house in Glendale, AZ for 148,000. Its about 15 years old, has a fully landscaped front yard (grass, plants and trees not desert rocks) and a gorgeous pool and nice landscaping in the backyard. He told me is mortgage payment is less than 850.00 per month. I'd say there are some GREAT deals in the Phoenix area.

I'd avoid Vegas except for vacation. The home prices are about the same but the quality of life is so much better in Phoenix than Vegas. Vegas has more ex-cons per capita than any US city, something crazy like 1 out of every 700 people living in Vegas have spent time in prison. There's a significant difference in crime rates between the two desert cities. I'm really glad my mom escaped Vegas, there is very little that is appealing about living there.

[Hammertime]

If you buy a property in Phoenix, just make sure you don't look hispanic in any way or they will deport you in Mexico if you aren't carrying your immigration card.

[BlackArcher101]

Originally Posted by Hammertime

If you buy a property in Phoenix, just make sure you don't look hispanic in any way or they will deport you in Mexico if you aren't carrying your immigration card.

If I give a B for effort, but a C- overall.

[ken0042]

Originally Posted by Captain_Obvious

I was in Las Vegas last week and looked at several nice Condos in the 30 - 70 thousand dollar range.

One thing to be aware of is the total condo fees. I looked at a couple of condos in Phoenix last year which had condo fees upwards of $500-700 per month.

[KTown]

All this infor is great if you are looking at buying a vacation house but does anyone have any information on rental properties for investment purposes, whats the rent income vs. mortage, what do property management companies charge (possibly area dependant), stuff like that.

I've got properties in western Canada but I am looking at expanding my portfolio and was thinking of Phoenix.

[dre]

Originally Posted by KTown

All this infor is great if you are looking at buying a vacation house but does anyone have any information on rental properties for investment purposes, whats the rent income vs. mortage, what do property management companies charge (possibly area dependant), stuff like that.

I've got properties in western Canada but I am looking at expanding my portfolio and was thinking of Phoenix.

I have family in Phoenix looking at property right now (vacation property). I asked the same questions as you did to ask their realtor. I should get an answer soon, but if someone on CP is renting out property in Arizona I would love to get some info from you too.

[Eric Vail]

If you are looking because you'd like to own and use a property in the south, I am not of much help. However, if you are interested in doing this to take advantage of the investment opportunity, I can help you.

I work for a company called Optimus US Real Estate Fund that has purchased approximately 25 condos in Vegas and 25 in the Phoenix. The condos were all over $200,000 just a couple of years ago, and my company picked them up for $62,500/each. The replacement cost, if you were to buy land and rebuild the condos is approximately $150,000/each. The company is continuing to add to its portfolio, looking at commercial real estate in some other markets.

The advantage to investing with a company like this is it is hassle free. You don't have to find properties, do the due dilligence on them, figure out the tax implications, find renters, etc.. You also don't have the bulk purchasing power that a company like this would have, and likely you don't have the real estate expertise either.

The company plans to rent the properties for approximately 5-7 years until they have reached their replacement value. Then they will be sold. Meanwhile, the investor gets 100% of the net rents, and 70% of the capital at the time of sale.

If you are interested in learning more, let me know. Feel free to poke around on our website: http://www.optimususrealestate.com/

[Street Pharmacist]

Originally Posted by Eric Vail

If you are looking because you'd like to own and use a property in the south, I am not of much help. However, if you are interested in doing this to take advantage of the investment opportunity, I can help you.

I work for a company called Optimus US Real Estate Fund that has purchased approximately 25 condos in Vegas and 25 in the Phoenix. The condos were all over $200,000 just a couple of years ago, and my company picked them up for $62,500/each. The replacement cost, if you were to buy land and rebuild the condos is approximately $150,000/each. The company is continuing to add to its portfolio, looking at commercial real estate in some other markets.

The advantage to investing with a company like this is it is hassle free. You don't have to find properties, do the due dilligence on them, figure out the tax implications, find renters, etc.. You also don't have the bulk purchasing power that a company like this would have, and likely you don't have the real estate expertise either.

The company plans to rent the properties for approximately 5-7 years until they have reached their replacement value. Then they will be sold. Meanwhile, the investor gets 100% of the net rents, and 70% of the capital at the time of sale.

If you are interested in learning more, let me know. Feel free to poke around on our website: http://www.optimususrealestate.com/

What size of investment is required?

[Ryan Coke]

I bought a place down there and am partially snowbirding this winter, commuting for work.

Good deals generally, but keep in mind the places where the best deals exist may not be where you actually want to live. The place I got in Scottsdale is probably %40 down from it's highs, in a great community and development. You can get better deals and cheaper places elsewhere, but it is hit and miss as far as the type of neighborhood you'll be in.

Taxes are reasonable in Arizona, no special non-resident taxes. Really no Canadian tax implications if it is for personal use (not rented)--there is a question on our tax returns about if you have greater than $100k foreign investment, but it is informational and does not affect your taxes. My condo fees in a well run community are about $230. Not that outrageous.

A good website for condos is scottsdalecondomania.com and for vegas lasvegascondomania.com.

Westjet does 12 flights a week now through the winter out of Calgary to Pheonix, and flies there year round now, and 3 hours gate to gate.

Buying and renting an investment property has a number of complexities compared to doing it in Canada as a Canadian---it is possible, but a bunch of extra issues revolving around taxes and potentially working illegally in the US make it challenging. I'll have to look into Eric Vails info, that might be a better way to go.

I also know a good realtor down there if anyone needs one, PM me if you would like.

[Eric Vail]

Originally Posted by Street Pharmacist

What size of investment is required?

Up until now, the minimum has been $10,000. Optimus has recently had their properties appraised and are issuing a new Offering Memorandum as early as tomorrow. The minimum may go up slightly, but should remain in that ball park.

[Captain_Obvious]

Just returned from Vegas and there were many condos in the 30 - 50 thousand dollar price range that were good units in nice areas.

Many had sold for 150 - 200 K a couple of years ago now and are sitting at that rock bottom price as of now.

They are almost all foreclosures or short sales though.

[Shin Pad]

Originally Posted by Ryan Coke

I bought a place down there and am partially snowbirding this winter, commuting for work.

Good deals generally, but keep in mind the places where the best deals exist may not be where you actually want to live. The place I got in Scottsdale is probably %40 down from it's highs, in a great community and development. You can get better deals and cheaper places elsewhere, but it is hit and miss as far as the type of neighborhood you'll be in.

Taxes are reasonable in Arizona, no special non-resident taxes. Really no Canadian tax implications if it is for personal use (not rented)--there is a question on our tax returns about if you have greater than $100k foreign investment, but it is informational and does not affect your taxes. My condo fees in a well run community are about $230. Not that outrageous.

A good website for condos is scottsdalecondomania.com and for vegas lasvegascondomania.com.

Westjet does 12 flights a week now through the winter out of Calgary to Pheonix, and flies there year round now, and 3 hours gate to gate.

Buying and renting an investment property has a number of complexities compared to doing it in Canada as a Canadian---it is possible, but a bunch of extra issues revolving around taxes and potentially working illegally in the US make it challenging. I'll have to look into Eric Vails info, that might be a better way to go.

I also know a good realtor down there if anyone needs one, PM me if you would like.

Good point. It's important to get a decent area. I ended up getting a place in Goodyear, which is on the west side of Phoenix. It is a relatively new area and is very nice. Lots of amenities close by.

Having driven around Phoenix a bit, I can see there are some pretty seedy looking areas. If you're looking around, you'll know fairly quickly whether the area is somewhere you want to live or not.