Did Your Flip Flop? Real Estate Investing Gone Bad.
Did Your Flip Flop? Real Estate Investing Gone Bad.
Kendall Trotter and Steve Hawks Las Vegas real estate experts are joined by Max, a California investor who made a living in the recent real estate boom by successfully flipping houses.When the Las Vegas real estate market started to turn the investors flipping game was over.
Max the California investor now wants to weigh his options on what would be the best solution for his current situation. Should he rent it, fix it up after the renters damaged it and the city boarded it up, should Max let the house get foreclosed on,should he short sale it or try and ride it out. Max wanted to hear some input from local Vegas realtors Steve Hawks and Kendall Trotter.
Trotter pulled the comparables for Max and it showed his house was worth about 50% less than what he owed. Steve Hawks explained to Max if he hypothetically owes $200,000 and the house is now worth approximately $100,000 the value of his home would have to double just to break even and that's not considering any negative cash flow or upkeep.
Today's value is 100,000 so for it to be worth $200,000 it would have to double. If a property value drops 50% many people assume off the top of their head that it just has to go back up 50% to break even. Which as we can easily see is far from the case.If the property drops 50% it must appreciate 100% to return to its former value before the 50% drop.How often does a real estate market double under normal conditions.Hawks then put forth the question to Max.
How long do you think it will take for the Las Vegas real estate market to double? Hawks added that's your answer on how long you need to keep the home to break even! .Armed with this information Max can now make his own personal judgment on what he should do with his Las Vegas investment.That is what Max and every other Las Vegas real estate investor and Las Vegas homeowner have to determine based on their own personal financial situation.
If you are in a similar situation and would like to know your options contact realtor Steve Hawks at 1-888-918-Bank.
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