From Military to Real Estate Mogul
Meet Tommy Leigh of Vegas One Realty
Tommy Leigh was active in the military and was stationed at Nellis Air Force Base at the young and impressionable age of 17. He then got into real estate and when he took over the Vegas One Realty brokerage, he knew that integrity, service and results were a vital and key component to how he wanted to operate in his real estate career. We got the opportunity to ask Tommy some questions that many readers have had on the forefront of their minds in the current real estate market.
Q: If a buyer goes into a bank and has a particular choice of funding, what are 2 other reliable sources of funding beyond what the bank may offer?
A: I always recommend a mortgage broker and not because I also hold that license. Mortgage brokers have many more lending options and types on loans to choose from than banks typically do. To break it down, coming to me as a mortgage broker gives you the option of upwards of 30-40 different lending intuitions with different types of loans, rates, niche programs you may need. What a mortgage broker does is place your file on a fishing line per-se and they cast it out to see who gives the best rates, service, pricing, turn times and the lowest costs for you and your families’ needs. Another option is private funding or hard money, which a lot of mortgage brokers; such as myself have full access to. A third option is working with a real estate broker that has experience with owner financing, which many individuals recognize as owner will carry (OWC). This means the owner carries the note and you make the payment directly to the owner themselves.
Q: As a seasoned real estate professional, what pre-qualifications do you like to see from a buyer?
A: I prefer to see a pre-qualification with either AUS or DU, which means automated underwriting system and desk underwritten approvals. What this reveals is that a loan officer or mortgage broker took the extra step to qualify these buyers and help place them in the best position of purchasing power. With the buyers’ permission, I’ll submit as much information as I can to make sure their offer is accepted. With access to a DU or AUS, I can refer the listing agent to the credit scores and debt to income ratio (DTI). When dealing with loans, the more information we can place upfront while creating the buyer’s story, the better off we are as a team to attain that end goal. If they are cash buyers a simple Proof of Funds (POF) that we can utilize for future offers is also ideal. Proof of Funds (POF) is a letter or documentation that certifies that an individual, institution, or corporation has sufficient funds (money) to complete a transaction. An example of a POF can be a bank statement, a retirement statement, IRA statement or a combination of any of these adding up to the closing amount needed.
Q: New investors typically ask (1) how can I find good deals, then (2) how can I find funding. That’s it – that’s usually as far as they think. Real Vegas suggests they seek out an expert in the field. What are your thoughts?
A: I think you’re pretty spot on for most of them, yes. Don’t misunderstand what I mean, as there are many that can and will become really successful. As a brand-new investor with minimal to no experience, I fully recommend a professional real estate broker or agent that specifically has investment experience. That may be a broker with a property management business that buys and manages for his investors, or someone that has experience with flipping investors or flips homes themselves.
Q: What mistakes do you see a lot of first-time buyers make?
A: Not working with the right real estate broker and the right mortgage broker. There needs to be a great fit and chemistry between all three parties with the same end goal of making sure that the first-time buyer is educated, feels protected, and is fully taken care of from start to finish. The most common and also most detrimental mistake I see is working with a part time agent or loan officer who isn’t full-time in the business, who was only used because they are a friend that maybe the buyer works with or knows. This is the biggest investment of your life and you should take that seriously with someone who is invested in the process of buying a home. That means working with a serious professional with a proven, well-documented and trusted track record. Not someone that works at a department store part time and just passed their exam. Don’t get me wrong, we all have to start somewhere, but it’s important that clients feel confident in their agent. Another avenue is for the new/part-time agent to involve their broker or team leader if they are on a team. For the first-time home buyer, just do your due diligence on whomever you choose to place your trust in.
Q: Do you see a specific personality for investment in real estate? Be it flipping or rental investment, do they usually have an appetite for risk if necessary?
A: In my experience, I’ve seen a multitude of personalities. Whether it be risky flippers, the timid first-timer that saw a flip reality television show and decided this was what they wanted to do, the very calculated and numbers-oriented experienced investor, or the one looking to earn a quick buck type: they all exist in this business. However, the most successful, in my view, are the ones that can change gears and don’t have tunnel vision as well as the numbers-oriented investors. I myself am a mix of heavy risk at times, to super conservative at others; it really depends on the terms of the deal. One thing I see way too much of is the quick cash investors. They are only worried about today and not 10, 15, 20 years from now. Flipping is fun and exciting but buying and holding properties have long term residual income. I personally always recommend a diverse portfolio of both, along with a few other options as well, like a vacation rental or two. Mix it up, and as much as I hate to use a cliché term: don’t put all your eggs in one basket. People have to ride the wave of the market.
Q: Have you seen success when someone purchases a property at a time when most on the market wouldn’t purchase that specific property?
A: I absolutely have seen this type of success. I have been part of that successful percentile. It’s all about what your goals are along with market education and experience. If we are talking about flips, you need to have vision and a lot of people cannot see that end result. As an investor, I need to base things off numbers, current market trends, and vision. As a real estate broker, working for a client and educating someone who may not have that vision, but wants to either pursue real estate investments, or maybe it’s just someone that is buying a home to redo on their own to live in. You need to help place that picture on a canvas for them. No matter what, at the end of the day, the numbers have to make sense and numbers don’t lie. If they don’t add up, then you need to be willing to walk from a transaction.
Q: With the success you see on TV house flipping shows, what is the hardest part about flipping a house right now? Finding the house to buy, the amount you invest into the flip, the buyer, or something else?
A: In addition to my residential and commercial real estate companies, I’m also an owner of Bulldog Properties, LLC, which is a house flipping company. I would have to say the hardest part of flipping at this time is the rehab costs are very high at the moment and the conventional supply chain is broken as a result of COVID.
Q: What are the pros and cons in investing in properties in vacation destinations?
A: Well, this is an easy one for me. My wife and I have a vacation rental in Maui, Hawaii. The biggest con is the unknown and the unexpected hot topic example: a global pandemic; it can crush that market all over the world. We are seeing it right now right in front of us with travel restrictions, mandatory quarantine, job loss, present and future vacation cancellations and the simple fact that some people are just scared to travel. Some typical cons would be allowing others in your home that you don’t know and being able to trust them with your personal investment. Other cons are natural disasters consisting of but not limited to hurricanes, volcanos, flooding, tornados, avalanches, etc. Another is placing your trust of your investment or eventual retirement home in someone else’s hands. In our situation, we have an on-island contact in case something breaks; we are not there to fix it. Typically, most don’t own a vacation rental within immediate reachable distance; therefore, relying on others is necessary. The major one is being dependent upon the rules, regulation and legislation in which your vacation rental is located. There is no guarantee those regulations won’t change or grandfather you in. With all that, to me the pros greatly outweigh the cons. Someone else is paying for something that you want to own outright someday, in a location that you want to be either part-time or full-time. This is not only exciting and monetarily enticing, but it’s really fun all at the same time. We get to assist others in, what in a lot of cases, is a once in a lifetime trip or experience. We also, when our unit is open, get to stay there at random times of the year, which is amazing.
Q: Do you find that a lot of investors and/or property owners use their residences for Airbnb?
A: No, not a lot because most cities don’t allow them. Short term rentals are not legal in unincorporated Clark County and North Las Vegas as of now. Henderson and Las Vegas allow them with restrictions. Historically, most of my investors buy and hold for a long period of time meaning 3-10 years, maybe longer, or they buy and flip and in this case they will hold the property for as little time as possible.
Q: What are your top choices for upgrade options to immediately raise the value of your home?
A: The typical and accurate answer most people will provide is simple: kitchens and bathrooms. Updating those has the greatest ROI (return on investment). If we want to look more in-depth, let’s assume those are complete. I would make the home more attractive as a whole. Curb appeal is where I would start. It’s the first opportunity to set the tone for a great impression for your prospective buyers. Other options consist of changing that choppy home into a more modern open floor plan that is more sought after. 2 other options: square footage, larger homes equate more value and adding additional living space, or outdoor indoor living spaces for entertaining.
Vegas One Realty
4035 S Tenaya Way, Las Vegas, NV 89147