Next to the extra low purchase prices of these home, there's also the opportunity to rent out these homes for around $1,100 to $1,400 per month. So these homes offer a pretty interesting cash flow opportunity.

There's also the potential that the prices for single-family homes in Las Vegas may double from the current prices over the next approx. 5-10 years. Reason being for this speculation is that only minimal construction of new homes took place in Las Vegas over the past few years. Due to the massive correction (bust) in home price over the past few years, as explained above, home prices are currently at an extremely low level. This offers the possibility that home price may produce large capital gains over the next approx. 5-10 years.

We consider the favorable single-family home situation in Las Vegas to be a special situation. Fact is, that this current window of opportunity will not last. Once the home prices begin to increase then the initial investment will be higher and therefore the potential capital gains will be lower.

Here are just a few examples of calculations for a general overview:
(Note: All examples are based on purchases of single-family homes for a purchase price of approx. $100,000 each. These calculations are assuming a home price appreciation of net 50% over an approx. 7-year period. Even a 50% net home-price appreciation will result in a much lower than average square footage price as compared to the past 15-20 years. From current levels, home prices will need to appreciate by at least 200% to reach the former highs of a few years ago. Therefore, these calculation examples are actually very conservative and are only used to illustrate the basic potential in this regard.)

Example #1 ... approx. 14% p.a. over a 7-year period:
Cash purchase of a single-family home for $100,000
Annual net rental income: approx. $7,800 resulting in approx. 7.8% p.a.
Net capital gain from home-price appreciation: approx. $45,000 resulting in approx. 6.4% p.a.
Total annual Return: approx. 14% p.a.

Example #2 ... approx. 18% p.a. over a 7-year period:
Purchase via financing of two single-family homes for $100,000 each
Down payment: approx. 50% each house;
Annual net rental income: approx. $7,200 resulting in approx. 7.2% p.a.
Net capital gain from home-price appreciation: approx. $76,000 resulting in approx. 10.8% p.a.
Total annual Return: approx. 18% p.a.

Example #3 ... approx. 23% p.a. over a 7-year period:
Purchase via financing of three single-family homes for $100,000 each
Down payment: approx. 30% each house;
Annual net rental income: approx. $7,200 resulting in approx. 7.2% p.a.
Net capital gain from home-price appreciation: approx. $117,000 resulting in approx. 16.7% p.a.
Total annual Return: approx. 23% p.a.

These homes can be purchased directly by any investor of any nationality with some exceptions. There are also opportunities to be a passive investor via professional local real estate groups who handle all the details and administration of such investments. The property management can also be conducted directly by the investor or otherwise more conveniently via the local real estate groups who again handle all the details regarding the various partner programs.

Note: The annual return as indicated in the above examples is only partially available on an annual basis, namely only regarding actual net rental income. The majority of the indicated annual return will only be available once the properties have been sold at the end of the investment period. It's also important to note that potential home-price appreciation is a pure speculation and cannot be guaranteed, but in the indicated examples are based on historical data. The expectation is that home prices will appreciate accordingly over the next approx. 5-10 years. Potential applicable capital gains taxes are minimal and may affect the annual rate of return depending on various components by approx. 0.5%-2% p.a.

Due to the fact that comparatively only a few homes were constructed in Las Vegas over the past few years (during the height of the housing bubble up to 50,000 homes were annually built in Las Vegas while currently only approx. 3,000 homes are annually constructed), it is our opinion that we may enter into housing shortage in Las Vegas over the next few years. The transaction volume in Las Vegas is already back to almost record levels of over 59,000 transaction per year (2011).

Because of these components, home-prices may appreciate automatically due to the economic principle of supply and demand. Rents are also increasing and are supporting a higher price level. This is an additional benefit which may further boost the profit potential.

Las Vegas is a fast growing town with a population of more than approx. 2.4 million considering the population of the whole Las Vegas valley (since 2010, Las Vegas is once again the fastest growing town in the U.S.). Up to approx. 8,000 new inhabitants a month move to Las Vegas. This scenario results in a steady demand for rental properties as well as in a demand to purchase residential real estate. Las Vegas is also the most visited city in the world as over 40 million visitors a year from all over the world come to Las Vegas.

Via various risk management strategies, any risk of loss can be reduced accordingly. One of the greatest advantages are the extremely low purchase prices for single-family homes. Due to this fact, losses regarding value are significantly reduced and/or are potentially non-existent (home prices have hardly dropped any more over the past 12-18 months, but are showing stabilization). Today, the price per square foot is the same or even lower than approx. 20 years ago.

Partner programs are usually very simple arrangements and there are various combinations available. A popular version to partner is via an index of a local company which is involved in the buying, selling and renting out of single-family homes. In this scenario a partner provides to the local real estate company a variable conditional loan. Due to real estate transactions of this local company, the index will usually change on a monthly basis.

Another version is for larger investors to establish their own local real estate group together with a local partner in order to facilitate the purchase, sale and the renting out of the pertaining properties. In this arrangement, the investor and/or the group of investors does not need to be present on location as the local partner executes all transactions. This version of engagement also provides direct ownership of the purchased homes.

In the U.S., the residential  real estate market functions under strict oversight of government agencies to protect consumers rights and to facilitate integrity in all residential real estate transactions. This is a very important aspect for each investor and partner. Through extensive public online data, transparency is a key component to the integrity of the U.S. residential real estate market. In addition, independent third-party accounting firms provide additional safety and transparency for each partner/investor.

For all comments and inquiries please send your E-mail to:
ds@scherf.com

Interested parties please include the following information:
(1) Name
(2) Mailing Address (Street, Street Number, Zip Code, City, Country)
(3) Expected available purchase amount (minimum $100,000) or partner amount (minimum $25,000)