Offer on a 1925 "Historic" House in Los Angeles

Buying & Selling Real Estate
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Offer on a 1925 "Historic" House in Los Angeles

Emerson Miranda
Investor · Torrance, CA · Member since 2014 · 70 posts · 24 votes

Dear BP's,

I just had a meeting with an owner of this 1925 House in a Hippie Area of LA.

Musicians, actors, artists, love the vibe of this house.

It's a 2/1 with a backyard, pool, unpermitted guest house/studio/garage with bathroom.

I'm thinking about making an offer for about $700k.

With a $50k rehab to basically update plumbing, kitchen, bathroom, and landscaping, the ARV would be around $850k to $900k.

But, once it's a desirable architecture, and area, kind of a 'historic', and getting a $6,600 rent, should my ARV to be higher?

Should my offer be higher?

It could be a nice Buy & Hold Property, once it rents for so much. And the owner has an offer for another year rent of $7k, just the way it is.

I'm dealing with an "antique house", and not sure about the real value.

Any experiences with the same kind of property?

Regards,

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  • Ewa RezaPro Member
    Real Estate Agent · Los Angeles, CA · Member since 2009 · 144 posts · 75 votes
    11y

    It's hard to say without running the comps for the specific property address... But if you can get $7K in rent without reno... why renovating??? If you don't want to flip it, keep it the way it is and do the reno just before you sell it. At least that's what I would do. 

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  • Catherine McHale
    Real Estate Investor · Los Angeles, CA · Member since 2013 · 9 posts · 1 vote
    11y

    Hi, are you sure they owner can actually get $7K per month in rent?  What is the neighborhood?  I would check Redfin to see the average selling price, and price per SF for 2 bedroom homes in that zipcode, as a reality check.  The "hippy" areas sound like the East side of the city, and I have not seen too many 2 bedrooms fetching $900K.  Also, there are lots of homes from the 1920's around the area, so it should be pretty easy to check comps.  Good luck with it, good price if you can get it for $700K and it does rent for $7K/month.

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  • Will F.
    Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
    11y
    Yeah like the others said it's hard to say. Perhaps let us know the area it's in. I don't see them renting for $7k
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  • Emerson Miranda
    OP
    Investor · Torrance, CA · Member since 2014 · 70 posts · 24 votes
    11y

    Thanks for the comments, BP's!

    It's in the Los Feliz, South of Franklin area.

    I just saw a lease agreement for $6,595.

    My comps shows that I should submit an offer of $650k/$700k.

    Some Realtors, not sure if they're lying to get the listing, are saying they could list it for $1.1M. A newly rehabbed house, very modern, sold for this much recently.

    A $900k Mortgage would be on the $4k's.

    What do you guys think about offering $850k?

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