I want to share with you all a quadplex deal I closed back earlier this year in East Los Angeles.
About the Deal:
Property was listed on the MLS for $615k. Each Unit was 700Sqft with 1 bed/bath. The property also had a detached 4-car garage and a laundry room. I initially put in a offer for $630k, but was outbid by another all cash buyer and placed as back-up offer. A week later, the first offer fell through and they accepted my offer! When I first visited the property, I can tell the owner had neglected to keep the property updated and let the tenants run things. The owner was 80 years-old and had the property all paid off(dealing with a very motivated seller). All units were rented well below market rent and I realized this would be a great value-add opportunity. I ended up negotiation the purchase price to $595,000.
The next day, I went knocking on each of the tenants door notifying them I was the new owner and giving them a 60-day notice for an increase in rent. I ended up having one tenant leave one month at a time. This was great for me since it allowed to renovate each unit one at a time without making me pay the entire mortgage payment each month. Overall, I spent about $40k in renovations and have brought all units to market rent. All the tenants now living at the property have been screened by me and are absolutely wonderful. I am now collecting $5k in rents per month ($1350,$1350,$1100,$1200). Currently cash-flowing $1,645 a month with a 20% down payment. My cash-on-cash return is 11.2% (which I believe is great in the LA area). I hope this deal show folks that it is possible to invest LA. I bought this property at 23 years-old working as a full-time financial analyst in Santa Monica. I also have my real estate license. Please reach out to discuss more!
Please see below the property analysis: