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Old 08-28-2007, 09:38 AM
AbreuTime AbreuTime is offline
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Join Date: Sep 2006
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Default Re: Thoughts on LV real estate at this time?

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Now without giving out specifics there is no way one can appraise this deal.

What I am interested in though is people's opinions on how close the LV high-end condo market is to a bottom.
...

On the other hand if the market will only drop like 10% more over the next year and then hold or rebound, this becomes quite a strong 2-year investment.


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3 thoughts:
1) you should calculate the value of the incentives he is giving you, and see what the equivalent sales price would be. This is the first step in weighing the value of the purchase. It seems like you have done this.
2) I dont have an opinion on the short term LV real estate market, and I would be wary about relying too heavily on someone else's opinion. The seller is putting you in a seemingly favorable position, but only from the point of reference of an inflated baseline price.
3) Calculate the value of the deal, speak to someone familiar with the local real estate market, and find out if you can do better. I suspect, even with all of the incentives, that you it won't be worth it to you to flip in 2 years.

Basically, I'm saying that you should never assume the market is at the bottom when calculating assumptions that affect a deal. You should be able to calculate a breakeven price drop, and see how sensitive the profitability is to slight changes in price.
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