We are currently facing the greatest economic downturn since the Great Depression. Individuals and corporations alike are tightening their belts and refusing to spend money...holding on to whatever they have in an attempt to weather the storm. Certainly prudence in this economic climate is wise. But what should also be remembered is that many of the great American fortunes were made in the 1930s. As others looked for cover, the great investors of the time looked for opportunity. We are faced with the same choice now that they faced then...try desperately to hold on to what we have, or build our wealth. So where are the opportunities in today's storm? Where can we invest with any kind of security? The surprising answer (given the recent bubble burst) is real estate. Why? Because when you invest in real estate properly...when you do it the right way...it does not rely on the strength of the economy at large to generate returns. This is because, in the world of real estate, cash flow is king. Appreciation potential is secondary. Not so with the stock market, by contrast. If you invest in stocks, the stocks must appreciate in value in order for you to realize a gain on your investment. If the economy weakens and your stocks depreciate in value, you lose money. A similar situation occurred with those who invested in real estate two or three years ago and ignored the need for properties to positively cash flow. These investors relied on appreciation to generate returns. When, instead of appreciating, the real estate bubble burst and price came falling down, these investors lost everything and faced disaster. The good news is that, done correctly, not only can this mistake be avoided, but real estate can become the greatest investment opportunity of your lifetime. The key is cash flow. If you purchase a property that cash flows strongly then your investment will generate returns for you even if it declines in value. The bonus, of course, being that when the property does appreciate in value (which historically real estate always does) you will make even more money. The key then becomes identifying and isolating these strong cash flow buying opportunities. Las Vegas is currently leading the nation in foreclosures, with 1 in every 60 homes in some stage of default. Our home prices have dropped over 70% in some cases from highs of two years ago. When you combine these low prices with a very strong rental market, you create great the best real estate investment opportunity we have seen in years. Zeroing in even further, I believe that the Northwest area of the Las Vegas valley, specifically, is a hidden gem for real estate investors. While the Henderson and Summerlin areas tend to draw more attention, the Northwest valley has rents that are only slightly lower than these areas, but home prices that are substantially lower. The Northwest is also the newest area of development in Las Vegas. The majority of homes on the market are less than five years old. Tucked conveniently between two freeways, the area features a burgeoning infrastructure with new government and retail development. A brand new hospital and library complex recently opened, along with 3 new high schools, a middle school and 2 elementary schools. The college of Southern Nevada has a new campus beginning construction later in the year and retail developments continue to pop up at every intersection. As an example, one of my clients recently purchased a one bedroom condo in the Northwest for $41K. This same condo is now renting for $750 per month. This has resulted in a positive cash flow, after all management , insurance and other applicable fees, of over $400 per month. Also in the Northwest, I was able to broker a deal for a different client on a 2 bedroom condo for $51K. This is now renting for $950 per month and producing a positive cash flow, after all expenses, of over $600 per month. And the truly great thing about these deals is that they are not isolated bargains. It did not take us months of looking and grueling negotiations to purchase these properties. Deals like this are reasonably plentiful in the Northwest Las Vegas valley. But you do need to know where and how to look, and you need to make your offers in a timely manner. As prices have come down, investment money has begun to pour back into the Las Vegas valley. Competition is beginning to heat up for buyers, but there is still enough supply to meet the increase in demand.



It's also a great time to come to Las Vegas for business or pleasure. Hotel prices are low (you can stay at the Trump for $79 on a weekend night), flights and cars are cheaper than they have been in years, even food is on sale. We do not expect prices in this area to dip much lower, if at all. With mortgage rates at historic lows, we are seeing cash coming back into the Las Vegas real estate market as domestic and foreign investors look for stable, profitable places to put their money. It appears that the time to take advantage of this historic opportunity is now.