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Buying newly built home in las vegas

I am entertaining the idea of purchasing a brand new home in las vegas, made my americanwest, they run for around 220k ++. I look to purchase this home as an investment, with hopes for potential appreciation. It is around 85$/sqft. Do you think this is the way to go for las vegas real estate?
Please advise
  • August 01 2012 - US
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Answers (1)

First of all, "hopes for potential appreciation" is not a good investment strategy.  Equity growth in good housing markets will happen over time - some markets more than other - but your first priority should be good cash flow and a favorable capitalization (cap) rate.  This assures you a rate of return immediately and in the short-term, while equity builds over time.

Second, I highly doubt that you will have a positive cash flow, and definitely a very low cap rate, with a $220 property.  Your rent will simply not be high enough relative to your acquisition price.

I've simplified things a little here, but I will be happy to go into more detail if you want to call me during the week.

Continued success,

Marco Santarelli
Norada Real Estate Investments
...
  • August 01 2012
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