Hot areas in Los Angeles area
Specialist · Burbank, CA · Member since 2019 · 15 posts · 9 votes
Hot areas in Los Angeles area
Investor-friendly agents in Los Angeles, CA
See the agents BiggerPockets members work with in Los Angeles, CA.
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Los Angeles, CA · Member since 2018 · 326 posts · 279 votes
7y43 Replies
- Member since 2020 · 984 posts · 1k+ votes4y
- Member since 2020 · 984 posts · 1k+ votes4y
Funny! Inglewood, Hawthorne, Lawndale and Lennox are the areas I think are the worst, or is it worse. I never did understand whether to use worse or worst. The best areas are the most-desirable since the most-desirable are in the most-demand and everyone knows that when things are in demand their prices appreciate rapidly and sell fast.
Which (or is is what) property or properties will make the most money. Buy 10 homes in Hawthorne for $6.5 million ($650,000 each) or one home for $6.5 million in Manhattan Beach. Generally, the one $6.5 million home will appreciate more than the total appreciation of the 10 homes in Inglewood. Which homes are more-desirable and will appreciate faster? Inglewood, Hawthorne, or Torrance. I will take a home that costs $300,000 more in Torrance, any day, over any home in Inglewood or Hawthorne.
I could be 100% wrong, but probably not wrong, at all. The only way to know is to do the math and compare. Don't forget that you don't make peanuts by purchasing rentals so you can earn a little rent money. The way you make money in real estate is when you purchase properties that appreciate, or purchase properties you can sell for a significantly higher price than you paid.
As stated a thousand times, I just purchased a 6-unit in Hawthorne this past March and it is the worse (or worst) property I own since there is not much room for increasing rents and with no rent increases the property will not appreciate as well as properties in Torrance where I still see major room for rent increases.
As mentioned in many recent posts, two weeks ago a broker called me from San Francisco with a 10-unit in Torrance for $1.9 million. I made a big mistake and told him I was not interested, but I told my broker friend about the property and he has it in escrow. Today, I did the math and figured he will make about $1.5 million in the next 10 years and this is because the current rents are $1500 per unit and he can easily increase the rents to $2,000 which is still a little below the market average for Torrance. You can't find properties in Inglewood or Hawthorne with this much room to increase rents.
Why am I even answering these questions since the OP's heading states that he is a specialist. Specialist, in what?
I attached 3 calculation charts for the 10-unit property in Torrance and 1 calculation chart for a 27-unit property in Torrance where I am guessing we (whoever we is) can make far more than $3.5 million in 10 years because I did not include money earned from appreciation and I always make my projections low since Murphy's Law is notorious for getting the better side of everything.
Not being mean. I hope. If you can show me something good in your areas send me the numbers.
I was searching loopnet.com this evening and I think this 27-unit property has been on the market, or on and off the market for 2 or more years and I may call, mess with their heads and try to get a $500,000+ discount which is hard to do, but I have been lucky in the past and there is some reason this property has been for sale for a long time. I drive by it no less than two times every day and it is a fairly decent-looking building. Always reminds me of a Motel. I might even take a partner in on this one.
I have a hard time believing there was a 10 unit in Torrance for 1.9m two weeks ago. If by chance there was, it would have to be in the absolute trashiest part of town.... probably one of those "postal" Torrance locations that are actually in Carson or any of the surrounding cities which have zero chance of renting for above 2k per unit.
- Member since 2020 · 984 posts · 1k+ votes4y
Wow!!! I must be seriously delirious. You are probably 100% correct and I am not thinking clearly. I was wrong about the price. As stated a few times, I was on my bicycle when the broker called and was not thinking clearly. I added $1 million, re-did the math and it looks like the property will clear more than $1.9 million in 10 years and that is still very good for today'a real estate prices. I will get more details from my broker friend in a few days, but I want to protect his privacy. The property is in Van Ness Avenue about 6 buildings south of Redondo Beach Blvd. It is a very decent area and I've owned the 28-unit building on Van Ness on the right side of Jack In The Box and we always get choice tenants.
But...the math for 16925 S. Praire Avenue in Torrance is correct for the asking price of $261,000 unit and I think we can make $3.5 million on that one in 10 years.
Feel free to correct my math because my brain is all over the map and I don't claim to be a mathematician nor am I even positive about how all the profits are calculated e.g. principal paydown and tax depreciation.
For my charts, I added the increases for the cash flow every year after rent increases and the numbers are impressive and should make investors more-motivated. Maybe, tonight, I will add the changes for the Cap Rate, Cash-On-Cash and other items for the end of each year to show that investors are earning up to 40% on their money every year for the first few years when rents are increased and not the 7% they calculate when they purchase a property.
- Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes4y
- 4yAmanda JacobellisBusiness MemberReal Estate Agent · Southern California · Member since 2020 · 96 posts · 43 votes
Jacobellis Group531 Reviews - Member since 2020 · 984 posts · 1k+ votes4y
Funny! Inglewood, Hawthorne, Lawndale and Lennox are the areas I think are the worst, or is it worse. I never did understand whether to use worse or worst. The best areas are the most-desirable since the most-desirable are in the most-demand and everyone knows that when things are in demand their prices appreciate rapidly and sell fast.
Which (or is is what) property or properties will make the most money. Buy 10 homes in Hawthorne for $6.5 million ($650,000 each) or one home for $6.5 million in Manhattan Beach. Generally, the one $6.5 million home will appreciate more than the total appreciation of the 10 homes in Inglewood. Which homes are more-desirable and will appreciate faster? Inglewood, Hawthorne, or Torrance. I will take a home that costs $300,000 more in Torrance, any day, over any home in Inglewood or Hawthorne.
I could be 100% wrong, but probably not wrong, at all. The only way to know is to do the math and compare. Don't forget that you don't make peanuts by purchasing rentals so you can earn a little rent money. The way you make money in real estate is when you purchase properties that appreciate, or purchase properties you can sell for a significantly higher price than you paid.
As stated a thousand times, I just purchased a 6-unit in Hawthorne this past March and it is the worse (or worst) property I own since there is not much room for increasing rents and with no rent increases the property will not appreciate as well as properties in Torrance where I still see major room for rent increases.
As mentioned in many recent posts, two weeks ago a broker called me from San Francisco with a 10-unit in Torrance for $1.9 million. I made a big mistake and told him I was not interested, but I told my broker friend about the property and he has it in escrow. Today, I did the math and figured he will make about $1.5 million in the next 10 years and this is because the current rents are $1500 per unit and he can easily increase the rents to $2,000 which is still a little below the market average for Torrance. You can't find properties in Inglewood or Hawthorne with this much room to increase rents.
Why am I even answering these questions since the OP's heading states that he is a specialist. Specialist, in what?
I attached 3 calculation charts for the 10-unit property in Torrance and 1 calculation chart for a 27-unit property in Torrance where I am guessing we (whoever we is) can make far more than $3.5 million in 10 years because I did not include money earned from appreciation and I always make my projections low since Murphy's Law is notorious for getting the better side of everything.
Not being mean. I hope. If you can show me something good in your areas send me the numbers.
I was searching loopnet.com this evening and I think this 27-unit property has been on the market, or on and off the market for 2 or more years and I may call, mess with their heads and try to get a $500,000+ discount which is hard to do, but I have been lucky in the past and there is some reason this property has been for sale for a long time. I drive by it no less than two times every day and it is a fairly decent-looking building. Always reminds me of a Motel. I might even take a partner in on this one.
I have a hard time believing there was a 10 unit in Torrance for 1.9m two weeks ago. If by chance there was, it would have to be in the absolute trashiest part of town.... probably one of those "postal" Torrance locations that are actually in Carson or any of the surrounding cities which have zero chance of renting for above 2k per unit.
Wow!!! I must be seriously delirious. You are probably 100% correct and I am not thinking clearly. I was wrong about the price. As stated a few times, I was on my bicycle when the broker called and was not thinking clearly. I added $1 million, re-did the math and it looks like the property will clear more than $1.9 million in 10 years and that is still very good for today'a real estate prices. I will get more details from my broker friend in a few days, but I want to protect his privacy. The property is in Van Ness Avenue about 6 buildings south of Redondo Beach Blvd. It is a very decent area and I've owned the 28-unit building on Van Ness on the right side of Jack In The Box and we always get choice tenants.
But...the math for 16925 S. Praire Avenue in Torrance is correct for the asking price of $261,000 unit and I think we can make $3.5 million on that one in 10 years.
Feel free to correct my math because my brain is all over the map and I don't claim to be a mathematician nor am I even positive about how all the profits are calculated e.g. principal paydown and tax depreciation.
For my charts, I added the increases for the cash flow every year after rent increases and the numbers are impressive and should make investors more-motivated. Maybe, tonight, I will add the changes for the Cap Rate, Cash-On-Cash and other items for the end of each year to show that investors are earning up to 40% on their money every year for the first few years when rents are increased and not the 7% they calculate when they purchase a property.
How do you go from 180K rent the first year to 475K the second year? In year six, you are projecting at monthly rent of $9,929 per unit. In year ten, you are projecting $15,900 monthly rent per unit. I know 30 years is a long time from now, but $45,758 monthly rent?? Please tell me I am reading your charts incorrectly.
- Los Angeles, CA · Member since 2017 · 22 posts · 3 votes4y
- Member since 2020 · 984 posts · 1k+ votes4y
You are right, again, and know what you are talking about. I made a mistake and put 19,000 for property taxes when it should have been $29,000 and I made the corrections earlier this morning. If you have anything you would like to add for calculations let me know. If you would like a copy of the software send me a PM. I appreciate your help and am developing a software system I hope more brokers and investors will use. I think the 33% for expenses is adequate since the buyert is getting a loan for an additional $300,000 and since he is a friend, contractor and his new building is only 1 mile from my office I do most of his work for my cost and he takes care of me (I hope) when hot deals come along and he helps to crunch the numbers and never pushes me to buy a property.
Thank you very much.
- Los Angeles, CA · Member since 2017 · 22 posts · 3 votes4y
That's a more accurate figure IMO. I'd love to have the application, I'll PM shortly.
I think though that the majority of investors here calculate a minimum of 40% for operating expenses. In fact, it's at 50% most of the time. This obviously depends on the age and condition of the property. A class A property will come in lower and a Class C, D at the higher numbers. Today I spoke to an owner of a 30+ unit property and his expenses came in at 60% because it was a building constructed in the late 30s.
- 4yAmanda JacobellisBusiness MemberReal Estate Agent · Southern California · Member since 2020 · 96 posts · 43 votesJacobellis Group531 Reviews
- Member since 2020 · 984 posts · 1k+ votes4y
Thank you very much.
I will send you a PM where you can get it and a video I created last night explaining how it works. You can download the software by going to bestlineplumbing.com, scroll way down the screen until you see a list and look for MS Access Software and then read the instructions. I appreciate all criticism and input.
- Member since 2020 · 984 posts · 1k+ votes4y
- 4yAmanda JacobellisBusiness MemberReal Estate Agent · Southern California · Member since 2020 · 96 posts · 43 votesJacobellis Group531 Reviews
- Member since 2020 · 984 posts · 1k+ votes4y
When you go to a meeting call me or send a PM. You can find me by calling Bestline Plumbing or scroll to the bottom of my home page and send an email. BP doesn't seem to accept email nor phone numbers in my posts.
I will be going the the next FIBI meeting in El Segundo on Deccember 9th and this Thursday to the downtown Los Angeles REIA meeting for something about Tax Trust Deeds. I am not interested in that facet of real estate, but I always learn something. I always dress with my blue plumbing hat, a blue tee shirt with large holes, wide yellow suspenders and I look homeless. You won't miss me in a crowd.
Actually, for the next two days I am homeless because my office (where I live) is being tented and I think I will just stay awake for the next few days since I have everything set up in my yard and the crime in Gardena with the homeless people is scary. I am getting very paranoid and keep a handgun fairly close 24/7. Homeless people keep jumping over my 7-foot wall and I had three homeless people arrested within the past year. One homeless person was living my my motor home for a few weeks before I found him on the property. The motorhome was completely covered with a canvass and locked. So, he would jump the fence at the rear of the yard where the motorhome was parked, went under the canvass and broke the door lock with a screwdriver of some tool, but he messed up the door a little. So, tonight I am sitting here with my 40 MM waiting for some fool to think the property is deserted because my office building is tented.
- Member since 2020 · 984 posts · 1k+ votes4y
Just for the record, I am posting this property for learning experiences and I do not sell real estate and have zero interests in this property of any type. I am posting this to show compare Torrance with San Pedro, Hawthorne, Inglewood, Columbus Ohio and Cleveland. Even though you can get properties in Cleveland for $50,000 per unit I never found a property outside California that has this much potential, or upside and I look for properties to purchase almost every day.
Here is a 27 unit property at 16925 Prairie Avenue in Torrance California. This property was originally built as a motel. It in in a desirable area in Torrance, sold in December last year and I am guessing the buyer does not have the business experience to deal with the tenants because I think all the tenants are Section 8 and some other socialist government agency pays the rents for the other tenants. I think the agency is called Brightwell, or something, but the rental income per unit is very decent and I think most of the tenants are in leases.
Personally, I would not buy this property because it would take a huge chunk out of the investment capital I have and putting down $2,000,000+ is like putting all my eggs in one basket. I would rather put $1 million down on 3 properties vs. $2 million on 1 and $1 million on another. If I do my math correctly I can should be able to put $500k down in 6 properties as in the example for the property on Van Ness where my broker friend will net more than $1.8 million for $500k down. So, If I can do that 4 times then I will earn with the same $2 million I would put down on Prairie then I will earn 4 x $1.8 million = $7.2 million vs. earning $3.8 million from Prairie. I THINK!!!
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