Last year we started the cash out refi process for our current house that we are living in. Since we got it renovated the home appraised for $370,000. So we took the $98,117.49 from the cash out refi and put it toward our new property. Finding a house in Vegas was not part of the plan as we were looking for a STR (short term renal) property in Crystal Beach, Texas. But we hit so many road blocks with buying a turnkey beach front property. Scott is such a go-getter it drives me nuts. I'm still tired from our current live in renovation that I don't want to live through it again… so soon. Seriously, when I tell you we did not plan to move at all, but plans quickly took a turn.
Last year we first started looking for high rises in Las Vegas and realized that it’s just not worth it because of the HOA fees and the hotel rental programs that high rises offer is just not feasible. We then started to look in the Smokey Mountains which is the most visited national park and properties there were getting swooped up by cash investors and it was too competitive for us. We decided to try Crystal Beach. We were so excited to see beach front properties within our price range. We got pre approved for $625K but we were able to up it to $800K. Then we were hit with challenges, every property we saw and wanted to put an offer on, they were old listings. Ugh! So we got discouraged and stopped looking for a bit. But we were set to stick with Crystal Beach because you can get a house on the beach within our budget.
Then in December 2021, we go to our real estate meet up and find out STR’s are going to be legal in Vegas in July 2022. So that switched our plans hecka quick. We started to look back in Vegas. I was like ugh… the plan was when we were looking for high rises was to find a turn key property. But Scottie is a risk taker. He has no attachment to money. Whereas I have anxiety and a fear of losing it. Putting our money toward this house gives my anxiety because 1… we don’t even know 100% sure that STR’s will be legalized in Vegas. 2… The mortgage for this house is double of what we pay now. But Scottie has a long term mind set and can run numbers. Me, I am short term, the worrier and the dreamer. So I guess when you put both of us together, you kind of get tons of arguments and a whole lot of “I’m right” ha-ha. I am not going to lie, I love renovating and making choices with decor. So it’ll be fun, but an expensive fun project. This house is so fucken big that its going to be a lot to take on.
Here are some pics of the new property. I am so in love with it. But yowza, it's going to be a challenge with all the renovations.
There is a bunch of updating to do and we have to do it right. Since comps in the area can go up to $1M-$1.4+ we have to strategically spend more on renovations and pick higher end materials. We have to fix the casita, add a kitchenette, redo the bathroom, gut the main kitchen, change out the flooring, turn the second living room into a game room which Scottie wants to do. I would prefer to turn the second living room into another attached casita with kitchenette and full bath. We also have a huge side area that has concrete where we plan to add an ADU (additional dwelling unit). I want to add a mini house or an airstream, then rent that out. Scottie wants to buy one of those prefabbed houses that come fully built. We’ll see. He also wants to redo the whole house flooring. I told him I refuse to change the flooring. I love it. Its funky and different. I want retro/funky Old Vegas themed for the house. But he wants modern, clean lines, Vegas themed. But then I decided I want to do cement flooring but Scottie doesn't dig it either... But I’ll win. Haha!
Showing the boys the property. We always have to make sure they are part of the process and we all agree on the house.
So we could not pass up this deal. We did our research and decided to buy a property in an unincorporated Clark County area because of the potential. It has an attached casita and we can rent it out on STR platforms for 31 days as a LTR (long term rental) after we renovate it and while we renovate the main house. Short Term Rentals will be legalized hopefully soon and laws are constantly changing. So we wanted to jump ahead and swoop a property up to live in it while we renovate it on time to do STR. We’re excited to attempt a luxury live in renovation. This will be our third live in reno. If plans don’t go as planned for STR then we’ll sell the property for profit or… hold it and rent it out long term. Or… live in it for awhile and rent the casita and add an ADU to rent it out. This place has so much land. It also has an extra living room that would be perfect to turn into another attached casita. The potential is endless with this property. Which is why we had to go for it.
While looking for properties we always look at how can we value add. This house hit so many checks. Since it’s sitting on almost 1/2 an acre we can add more rooms or add another casita. Or even add a tiny home. Of course going through the city for zoning and permits. We’ll see what hoops we’ll have to jump through. We know it won’t be easy but that’s what we love, the challenge and the creativity we get for each property we buy.
Peep the deets!
We had to move quick and be creative on this deal as there were 6 other offers. 2 of the offers were all cash. We were so worried that we decided to offer 10K over and waive the contingency of the appraisal of up to $20K if it doesn’t appraise to our offer. So grateful for our aunty and uncle that wrote out the deal where the sellers couldn't resist and where we would both win. After analyzing comps and seeing that this property matches our criteria, we knew we wanted this property.
List Price: $750,000
Lowered to: $729,500
Purchase Price: $740,000
Appraisal: $750,000
Negotiated Repairs: $3,000
Instant Equity: $10,000 + $3,000 in repairs
Down: Conventional loan putting12.54% down at $105,200 utilizing our cash out refi and savings
Estimated Renovation: $170,000 - using $30K from our savings, $60K from Scotties travel nurse assignment, and 80K using profits we made from the 24 unit. (FYI we also saved the rest of the profits from the 24 unit for taxes cuz we’re gonna get hit, thanks Uncle Sam)
ARV: $1,200,000+
All In: $275,200 (down payment using our cash out refi plus renovations using saved funds)
Mortgage: $3,429.06 <---- That's how much we spend a month on our current mortgage plus all our bills and groceries. So yes, this shit scares the fuck out of me.
A moment I wanted to capture. After hearing our house appraised for $750K, $10K over on our accepted offered!!! Here I am virtually signing in the middle of the ocean, fishing for mahi mahi and getting updates while on vacation.
FORECAST:
Plan A:
STR potential on the casita (when legal): $2100/mo with a 30% vacancy rate, cleaning, insurance, STR fees, and maintenance.
STR potential on the whole house including the casita (when legal): $12,600/mo (this is a conservative estimate) with a 30% vacancy rate, cleaning, insurance, STR fees, and maintenance.
STR potential on the ADU (when legal): $2600/mo with a 30% vacancy rate, cleaning, insurance, STR fees, and maintenance.
STR total: $3700 (casita and ADU) vs. $12,600 (the whole house including, casita and ADU)
RV parking: $200/month
Plan B:
LTR potential on casita: $1,200K a month
LTR potential on ADU: $1,500K a month
LTR on the main house: $3,400
RV Parking: $200/month
Plan C:
Sell for profit
Plan D:
Live in the main house and STR the casita and ADU
RV Parking: $200/month
$170,000 renovations include:
Casita: $15K
Adding a full kitchenette to the casita
Redo the casita bathroom
Redo the flooring in casita
Furnish casita
Main House: $95K
Flooring throughout the whole house
Gut the main kitchen
Minor electrical work
Paint exterior
Paint interior
Landscape front
Landscape back
Two new AC units
New gas heater for hot tub
Furnish/Decor the whole house for STR
Put the house on city water currently on septic
Additional Dwelling Unit: $60K
ADU - mini house or prefab house
Goal: Rent the casita while we live there.
Dream: Move out after rehab is done and STR the whole place out. Or depending on the market we may want to sell. But we plan to hold on to this property long term and on to the next project.
This will be our first time being landlords as we plan to rent out our current home that’s a 3 bedroom, 2 bath with a pool, sauna, pond, rose garden, upgraded house and bomb ass kitchen. Haha! I love this kitchen. It's my dream kitchen, we've only had the upgraded kitchen for about 7 months but we have so many memories around the island. So sad to leave, honestly.
Stay tuned to our messy life as we attempt this new challenge. We are learning to leverage debt, the good debt that we are all so afraid of. Good debt to us is mortgages. Bad debt is consumer debt, like credit cards, school loans, car payments and any borrowed money on liabilities. If you have bad debt, learn to pay all that off as quick as you can so you can start investing. We are taught that you should pay your mortgage off and only have one house. But why not leverage cash out refis, buy another property with it and invest long term with buy and holds. This is what we are learning to do. We're excited to try, learn, fail and grow in this area.
We currently have 3 mortgages to our name now. The memory care home, our current home and the new home. Eventually we would like to branch off and get properties in our own names and not combined since you can have up to 10 mortgages per name. So Scottie can have 10 and I can have 10. However, since we have 3 already to both of our names, we will try on the next properties to see how we can just use one of our names so we can maximize and build our portfolio bigger.
While we signed our loan docs they forgot my first name and used my middle. Thank goodness they printed my name out correctly on the docs though. Phew!
As always I’ll vlog our journey along the way. This time I’ll use YouTube rather than Tik Tok. Lol! Thanks for reading fam. Go out a crush your dreams!!!
Adjectives used:
ADU: Additional Dwelling Unit: ex. an additional house/casita.
STR: Short Term Rental: ex. Air BnB, VRBO, Booking and etc.
LTR: Long Term Rental: leases that are 31 days or longer.
ARV: After repair value: the appraised value of the home after repairs.
Our dance move every time we close a deal!