August Wrap Up

NODs and TDs stayed virtually flat this month, while NOSs declined.  August saw 682 NODs up slightly from 674 in July.  NOSs came in at 519, down sharply from 573 in July and to their lowest level since February 2010, but corresponding to the major drop off in NOD action earlier in the Spring.  TDs fell sightly to 294 from 298 in July.  The chart is here.

NRES bought 3 properties at Trustee’s Sales this month, and sold 11 of their growing inventory.  Looks like they are cutting back a bit.

One of the stranger listings to hit the MLS in the last week is 4705 Alpes.  $3,478,000 and apparently built for cash.  The MLS listing has been changed – a couple days ago it included wording that for a full price offer, you also got APN 126-294-26.  This turns out to be a 4356 SF unbuildable Incline Village lot that the owner bought for $15,000.  I guess you could use it for picnics?

Another interesting one is 6513 Galena Canyon Trail.  Purchased for $1,622,500 in October 2005 and now listed for $1,475,000.  The news isn’t the price hit, but who the seller is.  The rumor has also been floating around that the Winnemucca Ranch / Spring Mountain project is being shopped about.   And I haven’t seen much action on the tree-farm-for-carbon-credits project up north, either.

Kalifornian got a pretty interesting general discussion going about how to invest $350,000 cash in the Reno real estate market.  Think about how specifically you might recommend doing it, and some of the optional strategies out there.  I’ll put up a post with some of my (bonehead) ideas over the weekend and it will be interesting you see your ideas added in.

Finally, and unnamed reader proposed this update to the RRB masthead.  You crack me up – JoAnn/Mike looks like the skinny guy from Brooks and Dunn!  Thanks for making my week! 


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    Mike –

    The unbuildable Incline Village lot you mention has an interesting story. It, along with I think about 7 other similar unbuildable lots, was originally part of a CID known as Bitterbrush. Although most of the development was built out, these 8 or so lots weren’t. And the permits ran out.

    What they were marketed as, were “tickets” to Incline Village’s private beaches. As you may know Crystal Bay property owners have no right to use Incline Village’s private beaches. So the marketing for these unbuildable lots was that if you own property in Crystal Bay; want to use Incline Village’s beaches; buy one of these unbuildable lots and then as an Incline Village property owner, you will have that right.

    Weird but reality. Cheers!

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    Great story, smarten. So for $15,000 purchase price, and $835.16 in annual property taxes including the $830 the IV Improvement District fee, the owner gets to go to the beach? Growing up in Evanston, IL, I think we paid $15 per season for access to better beaches on a bigger lake (though no mountain view). Wilmette was pricey at $20 a season, but Gilson Park was a great place to explore the herbal without much authoritarian presence, so it was worth the extra $5.

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    Mike what is the story with the Galena Canyon Trail house? Every other house in Reno has lost at least 35% of its value since 2005 (and some a whole lot more), but this house is down only about 9%??
    Is this a special kind of denial? Very personal to the owner?

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    Thanks Mike for mentioning me in the blog.

    I went today to look at couple of condos in Pleasanton (allegedly a very good school district). Property values are down but HOA fees are up and sitting high. Plus, houses that I saw were screaming “huge assessment is coming soon” – siding and windows all obviously in need of replacement.

    We’re talking about $280-300K for 1200-1600 sq ft, 2-3 bdrms, 1 car garage / carport and $300+/- monthly HOA fee.

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    GreenNV – my name says it all.

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    If I had $350,000 to invest in the Reno RE market, I’d buy a fourplex for cash and live in one of the units.

    At $87,500/door with no mortgage, I could rent each unit for $850-$1000/month and have an after-expense cash flow of $2800/month, or no less than $1000/month even if I had to carry a couple of vacancies. And not having a mortgage would give me more flexibility in renting the place.

    My returns would be lower than if I leveraged it, but I’d sleep well.

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    billd; can you elaborate on est. return. 3 units at 1,000/mo is 3,000. You figure to pay ins,prop tax, water, sewer, etc. with $200/mo., or did you mean before expense cash flow?

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    Your going to rent each apartment in a 4 plex for $850-$1,000/ month?
    What dream world are you living in?

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    bill drummer… When you find that 4 plex with a 11%+ cap rate.. Let us know..

    Meanwhile.. Down on the farm..

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    While multi-unit complex could be definitely a winner in terms of cash-flow, I’m a bit afraid of jumping into that for the following reasons:
    a) quality of tenants probably lower than in decent SFR (= trashy tenants)
    b) harder to sell because it requires not just a buyer but an RE investor
    c) has to compete with apartment complexes which have bigger volume and better economy of scale

    Not to say that it’s easy to resell SFR in today’s Reno market or that SFR does not compete with apartments…

    just a few thoughts on the subject…

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    In terms of 4% return – yes, it sounds pathetic, but it compares to 7% pre-tax return – and those investments are hard to find and tend to be high-risk.

    Someone joked to me lately that, compared to market crash in 2008, investment with stable 0% return sounds pretty attractive.

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    What attracts me in Reno:

    a) affordability of dwellings
    b) relatively high rent (in New NW)
    c) good schools (again, new NW)
    d) the fact that many locals cannot buy now (makes a case for them to rent from me)

    What scares me in Reno:
    a) isolated, slow, low-paying job market. Not at all what was hoping to see in “up-and-coming” Reno of 5 years ago.
    b) no obvious prospects for economic growth (although if they were, they would have been already reflected in housing prices – efficient markets rules!)

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    Disregard my prior post.

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    Randy Vanderpool

    Thanks for the update again. I love the discussion on the Reno area. Learning about other areas of the country and their trends allow us to make some decisions for the upcoming months.

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