Coach G bought a Las Vegas rental for $75,000 in 1998. By 2012, the same house was worth $50,000 but still rented for $900 a month, yielding 8-9% cash returns. He's buying multiple distressed homes using this strategy as hedge funds move into the collapsed market.
$75,000
$250,000 (a quarter million dollars)
$50,000
$900 per month
About 8–9% (cash return after expenses estimated loosely by speaker)
I'm also a real estate guy, and I wanted to kind of give you a vivid example of what Bruce was talking about before, because I own a lot of properties in Las Vegas. And luckily my father got me in a headlock in 2006 and said, you should sell some of those and pay the other half off. And I said, old man, you are so out of touch. It's rock and rolls on down the leverage to the hill. Are you crazy? So he squeezed a little harder like this, and I couldn't breathe. And I said, okay, okay. So luckily I sold part of my property and sold the other half off. Because I want to show you my. Here's what I call if you can see this or not. But check this out. It's called my 2020 Vision Growth Fund. And from 2013 to 2016. Here we go. In 1998, I bought a house in Las Vegas, Nevada. A regular little 1963 bedroom, two bath, kind of a junky house. I paid $75,000 for it and it rented for $900. Okay. In 2006, at the peak, that same house sold for a quarter million dollars and it rented for $900. That's the point. In 2010, here we are, here you can kind of see what happened. I call this a tail. I don't know what you want to call that animal, but there's a tail here to where it's really not dipping anymore. It's kind of flat across. But in 2012, guess how much that same house sells for right now. $50,000. That's an 80% decline from here to here. Thank you, dad. But guess how much that house rents for. $900. $900. $900. Nine hundred dollars. This, to me, is what Bruce was talking about, that, you know, where else can you get that kind of return anything Right now I could rent that house out. I could pay $50,000 cash for that house right now and rent it out for $900 after expenses, 30, 40%, whatever the thing would be, I can get an 8, 9% return right on that. That's better than anything else out there, in my opinion. And that's what the hedge funds are looking at right now. They're out there saying, you know what? Where else can we put our money in this imploded market? This is a good house. It's not a great house, but it's a good house. Three bedroom, two bath, decent area, 1960 kind of house. So it's got a 6,000 foot lot, as opposed to the zero lot line of these recent houses it rents all day. You know in Las Vegas right now the hotels are still full and the bartender and the waitress and the parking dude and the dealer they rent my houses for $1,000 a month all day. Renting is not a good thing. That's what the government said. I think it's all good to rent but this just an indication of what I see right now as far as the real estate. I'm doing the notes and I'm doing the real estate. I plan to buy a lot of these because yeah could it go down to 30 or something like that? I guess so but it doesn't concern me that $900 rent was there, there and there. I'm okay with $900 a month rent and I'm okay with the employment over there. The hotels are full. That $400 room now goes for $100 but people are still being paid pay me $1,000 a month. So that's one of my real estate strategies as opposed to not.
