Going up downtown

Developer Mike Flores has faith in the rejuvenation of downtown Las Vegas. He has invested more than $1 million in the conversion of Fremont Manor Townhomes to affordable housing.

The three-story, 36-unit property at 1841 E. Fremont St. is surrounded by littered lots, cheap motels and a 7-Eleven convenience store at Bruce Street.

In August, he plans to sell 500-square-foot, one-bedroom condos priced from $99,000, or about $200 a square foot.

"If you look at square footage, that's a negative," Flores said as he showed a finished model unit. "However, if you look at dollars and cents, 10 percent cash-on-cash (return) is a good deal."

Flores estimates that a unit can be rented for $800 a month, providing $9,600 annual income on a $99,000 investment. With write-offs for taxes, insurance, interest and homeowners fees, the investment return is close to 10 percent, he said.

The 22-year-old building has been reconstructed from the roof to the slab, including plumbing and electrical work, and a new elevator is being installed, he said. The units have granite counters, ceramic tile floors and new carpeting, doors, appliances and dual-pane windows.

"Everything is brand new, the washer and dryer, new roof, new refrigerator," Flores said. "I'm pricing these to sell, not to hold out and get the highest price."

The parking lot is gated and a security system is in place at the entry door with intercom monitors in each condo.

"That's good because you'll need it in that part of town," housing analyst Larry Murphy of Las Vegas-based SalesTraq said.

Murphy said the average price of foreclosure homes in Las Vegas was $110 a square foot in June.

"So $200 a square foot ... where does the word 'affordable' come in? People that live in 500 square feet would probably rent anyway," he said.

Fremont Manor is about a block from Fremont Street Lofts, which are selling for $290,000 to $350,000 for units ranging from 1,800 square feet to 2,200 square feet. SalesTraq reported 20 closings at Eleventh Street Lofts, a similar product a few blocks away, at a median price of $325,000.

Flores, who gained notoriety when he refused to sell his Villa de Flores apartment complex on the Strip to Steve Wynn for development of Treasure Island, said he's bought and sold 28 properties worth about $100 million in his 40-plus years here.

Fremont Street is becoming "the place to be," he said.

Flores plans to offer Federal Housing Administration loans with no money down for first-time home buyers at Fremont Manor.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.