REI in Metropolitan Area- Downtown

6 Replies

What would one recommend investing in a Major downtown, metropolitan area, like downtown LA or SD for generating positive cash flow? And a possible appreciation? I mean ‘location, location, location’ but you have HOA. Wouldn’t downtown be the best location? You have the jobs, infrastructure, bars/clubs, vs a MFH somewhere more inland, where it’s more quite, with low crime rates, schools, etc?

@Arthur Voskanyan , finding "positive cash flow" in the same location as "jobs, infrastructure, bars/clubs, appreciation like downtown LA or SD", is largely an oxymoron. But, good luck...

If you can find a deal in downtown SD where the HOA doesn’t kill the deal then good luck. I lived down there and my HOA was low for the downtown area, just $365, and it killed my cash flow after I moved out. I held on for a cash flow loss for 18 months and sold for the equity play. I just got lucky on that one and made money when the market jumped. I would assume downtown LA is somewhat similar to downtown SD. Lots of the same model condos and same types of numbers to run everywhere so not much big time changes to make to properties to help you out. Not sure where you will get that purchase price discount in the downtown areas but I have never marketed there so I can’t say you won’t find any deals. Just giving you my experience.

Brent,
What exactly do you mean? Is it a bad investment? Downtown?

@Arthur Voskanyan Who told you there is positive cash flow in metro areas? Well, yeah, buy it free and clear with cash and it will surely cash flow. I assume you have that much to ask these kinds of questions.

Originally posted by @Arthur Voskanyan :

Brent,
What exactly do you mean? Is it a bad investment? Downtown?

Your question was very vague. Have you done any analysis on properties "downtown"?

"Positive cash flow" and "good investment" are two different topics!

ie. A "negative cash flow" investment (that you'd likely be getting downtown) does not necessarily mean "bad", and a "positive cash flow" does not necessarily mean "good".

Each property needs to be looked at on its own merits (and compared to similar sales nearby).

Many hundreds of threads here on BP only give the specifics for a particular property, but with no mention at all about what other surrounding similar properties sold for.

But Arthur, you won't do that, right? Cheers...

You’re looking for opportunities that don’t exist. Metro areas can have rent and property value appreciation in the future, but you’re not getting those benefits right away and the cash flow will be negative to start. Check out this thread about the metro NYC market and pay attention to comments made by @Llewelyn A. They may be most appropriate for your questions. https://www.biggerpockets.com/forums/12/topics/509736-new-york-nightmare-market?page=1#p3121712

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