Las Vegas Condos and Condo Hotels – Where are the Deals?

Like the rest of the housing market nationwide, Las Vegas high rise condos and condo hotels have taken a “hit” in value the past couple of years. But while residential high rise condos are still moving along, albeit at reduced prices, condo hotels owners are faced with a serious dilemma.

Back in 2004 and 2005 every major lender had financing in place for condo hotel purchasers, requiring anywhere from 20% to 30% down payments. Since most developers got at least a 20% deposit on their contracts for projects under construction, borrowers thought they had all the cash they would need when the time came to close three of four years down the road.

But with the current economic conditions and tightened mortgage lending guidelines, currently there are NO lenders willing to finance condo hotels, even with a 50% or 60% down payment, verifiable income and perfect credit.

In Las Vegas, Palms Place and Trump Tower, both condo hotel projects that completed construction in 2008, the developers have not been able to close escrow on many of their units that were under contract. Would be buyers are trying to find partners with cash, someone to take over their contract, or simply walking away from their investments. Many buyers are being forced to give up over $150k in deposit money and would be delighted to get back even a fraction of that amount.

While the situation is dire for these buyers caught up in the mortgage meltdown, this is the perfect opportunity for anyone with cold hard cash to pick up prime Las Vegas real estate for less than 2004 prices! Owners at Palms Place (those who closed before the condo hotel loan programs were discontinued) report being VERY happy with the income generated on their units from the rental program. Palms Place, adjacent to the Palms Hotel, is a very “happening” resort destination. The Playboy Club, fashionable restaurants, entertainment venues and MMA sporting events keep the resort full and it has a very low vacancy rate.

Even at the MGM Residences, most of which closed before lending was shut down, there are numerous re-sales and foreclosures available at incredible prices. Since they can only sell to cash buyers, there are definitely steals to be found.

What of the MGM City Center and the Cosmopolitan, two condo hotel projects that are due to come online in late 2009 and early 2010? The Cosmopolitan, with what is unarguably the best location on Las Vegas Boulevard, was recently taken over by Deutsche Bank. And MGM City Center next door is owned in large part by Dubai World. Both these entities have “deep pockets” and their locations are superior. Word on the streets is that by the time these units are ready to close, the developers will have their own in-house financing in place. Also by that time the economy is expected to recover substantially.

But in the meantime, those with cash and aspirations to own a piece of Las Vegas are taking advantage of the times. Many are negotiating with the buyers under contract who cannot close to take over their contracts for a fraction of the original deposit. Assignments on these contracts are subject to the developer’s approval, but cash buyers are almost always approved.

Since these buyers have not yet closed, these properties are NOT in the Las Vegas MLS system. High rise agents around the city do have lists of potential assignments as well as foreclosures in the projects mentioned above. Eventually the condo hotel market will rebound, and those that are buying now, at the bottom, will make out well. To find out about some of these great Las Vegas condos, please call us at 702-985-7654 and we will put you in touch with a high rise specialist.

Financing Foreign Investors for Las Vegas Mortgages

With the dollar expected to rise against foreign currencies later this year (that trend has already started), foreign investors are hurrying to purchase real estate in the US while their dollar goes further. Most of these investors are targeting the Las Vegas real estate market in particular, where the sharp decline in prices (due to the high amount of Las Vegas foreclosures) and the world class amenities have made it an attractive get-away destination. In particular, Canadian buyers are looking to Las Vegas homes as a vacation retreat from their harsh winter climate.

Most banks will not loan on real estate outside of their own country. With all the recent shifts in the credit markets, the qualifying criteria has changed for mortgage loans in the United States across the board, including those to foreign purchasers. Prior to this year, a foreign national could obtain financing from US banks as long as they had 35% to put down with no or limited documentation. Now US mortgage lenders are requiring full documentation of income and assets on all mortgage loans without exception, though the down payment requirements have dropped.

A citizen of a country other than the US can obtain a loan for property in the US based on what classification they fall under. A permanent resident alien is a foreign national who has been granted the right to work in the US permanently and who has been given a US social security number. A permanent resident alien can purchase property under the same guidelines as a US citizen. They can get a loan with as little as 5% down payment for a primary residence, either on a fixed rate or adjustable rate mortgage at the current interest rates available to US citizens.

All other foreign nationals, including those with temporary work visas, are required to put down a minimum of 25% for properties under $650,000 or 35% for properties over $650,000, whether the property is a primary residence or a rental property. Lenders will also require the equivalent of a US TRW rating as well as full documentation of their employment income and assets. In addition, the down payment money must be “seasoned” in a US bank for at least 60 days prior to the close of escrow.

These loans to foreign nationals are only currently available as adjustable rate mortgages or ARMS. The fixed rate terms can be for 3, 5, 7 or 10 years and interest rates are currently running between 7.5% and 8.5% with approximately 5 loan discount points prepaid for the amount of the loan (points can vary on a day to day basis just like interest rates). Each point is the equivalent of 1% of the loan amount, so on a $100,000 loan 5 points would be $5,000.

Another alternative is for the foreign national to obtain an equity credit line on their property in their home country and come to the US with cash in hand. Cash offers are very strong, and enable the buyer’s agent to negotiate the best possible price on behalf of their client.

For more information on getting qualified for a Las Vegas mortgage and to receive the latest listings on great deals in Las Vegas new homes, high rise condos or MLS listings, please contact our office at 702-985-7654 or email us at sold@greatlasvegashomes.com.

In Las Vegas the Cosmopolitan Resort Keeps on Trucking!

To the right, the Las Vegas Cosmopolitan Condos and the
Bellagio Hotel and Casino, to the left the MGM CityCenter project.
Phot0 taken September 5th, 2008.

Many proposed high rise condo projects around the country have had the plug pulled in the past two years due to cost overruns and tightening credit. Since Deutsche Bank announced they were beginning foreclosure proceedings on the Las Vegas Cosmopolitan condo hotel project at the beginning of 2008 on their $760 million dollar loan, over 1800 contract owners have been holding their breath, wondering if the development would be completed. Or if they would get their money back in full if the development was canceled.

There were many "interested parties" making bids to purchase the project, but as of this week Deutsche Bank has taken over full ownership of the Cosmopolitan under an affiliate, Nevada Property I. Deutsche Bank was the high bidder, paying $1 billion at a recent foreclosure sale to acquire ownership of the project.

And Deutsche Bank isn't letting any grass grow under its feet to make sure the project goes forward. It has already inked contracts with Related Companies to take over as the resort's new developer. In addition Perini Corp. signed a new contract to complete construction work on the project. Perini has been working on the project from the beginning, and was being paid under an interim agreement since March when Deutsche Bank began foreclosing after the original developer, Bruce Eichner, failed to complete a deal to secure more financing. Increased construction costs helped drive the Cosmopolitan's construction budget from its original $2 billion price in early 2006 to its current $3.9 billion price, and Eichner was unable to find a new partner with enough capital to infuse into the project.

A letter has already been drafted to contract owners by the resort's new developer, Related Companies, letting them know of the management changes and informing them of progress to date. This letter will go out on Monday to almost 1825 contract holders, assuring them of the project's completion. To date over 50% of the Cosmopolitan's exterior construction has been completed, and it is anticipated that by December of 2008 owners will be celebrating the "topping off" of both towers, including the penthouse units. The new proposed completion date for the entire project is estimated for the second quarter of 2010.

Along with a rebounding resale housing market, this is great news for the local Las Vegas real estate market. For four months straight statistics have shown a significant rise in Las Vegas homes sales, with multiple offers on lower end properties, especially Las Vegas foreclosures. The buyers are back!

Amazing Deals on Units Available Pre Closing at the Palms

Even at the Palms Place, where most buyers were the young and the wealthy with cash to burn, there were some buyers that knew a good investment when they saw it. They took the plunge and plunked down a 20% deposit on one of the elegant Palms Place condo hotel units hoping to make a bundle by the time the property was built.

Unfortunately in the meantime the national economy stalled and the Las Vegas real estate market dropped. Now, almost four years later, many of these same buyers are unable to obtain financing in the aftermath of the subprime market debacle. They are desperate to find a buyer just to recoup part of their deposit.

The units below are all available on the pre closing market. The original purchasers of these units want to assign thier contracts prior to closing with the Palms, and these prices are far lower than the units that have closed and are already listed for resale! Check out the one bedroom unit for only $700k! Now THAT is MOTIVATED!!

1 Bed
Strip
1.199,000

1 Bed
Mountain
1.088,000

1 Bed
Mountain
1.088,000

Studio
Strip
651,900

Studio
Strip
615,000

Studio
Mountain
537,000

Studio
Mountain
525,000

Studio
Strip
548,000
1 Bedroom - Strip View - $700,000 - Deal of the Day!

* All units are fully furnished
* Closing March 2008
* Studio (approx) 620 Sq. ft.
* 1 Bedroom (approx) 1,220 Sq. ft.
**Please note, the units are all on the upper level floors. Residential units start on the 8th floor. Floors 13, 14 and all of the 40's have been skipped due to superstition.

If you would like to find out the details on the assignments, please give me a call at 702-985-7654 right away!

If you can't quite afford the Palms Place but really want to buy Las Vegas high rise condos, there are also some GREAT deals to be had in the Residences at MGM starting in the high $300s.

http://www.prweb.com/releases/2008/03/prweb791764.htm