Newbie to Multi-Family Apartment Investing in Los Angeles County
Newbie here. About to take over a family business. Multi family apartments in Covina, La Habra, Baldwin Park 10+ units each. One apartment's depreciation is expiring so will need to do a 1031 exchange in the same area. Trying to do my homework. Trying to figure out what reasonable and REAL WORLD numbers are in those markets so I can compare. Would love to see some spreadsheets with actual numbers. We've done some research on REITS with assets in those areas and these are the numbers we're seeing. Gross Revenue = 9% of Real Estate Value, Capital Gain of Real Estate = 4% Annual, Net Income = 3% of Real Estate Value. Thoughts?
I would look at metrics such as ROE (Return on Equity) and IIR/AAR (internal and average rate of return). This will help you understand how your money is working for you. Cash on Cash return typically does not include a sale calculation which you would need to do when you complete a 1031 exchange. Have you looked at more landlord friendly states like Kansas and Missouri for an exchange?
-
Real Estate Agent Kansas (#00245860) and Missouri (#2019043249)
- http://www.xchangecre.com
Quote from @Nav Hasen:
Newbie here. About to take over a family business. Multi family apartments in Covina, La Habra, Baldwin Park 10+ units each. One apartment's depreciation is expiring so will need to do a 1031 exchange in the same area. Trying to do my homework. Trying to figure out what reasonable and REAL WORLD numbers are in those markets so I can compare. Would love to see some spreadsheets with actual numbers. We've done some research on REITS with assets in those areas and these are the numbers we're seeing. Gross Revenue = 9% of Real Estate Value, Capital Gain of Real Estate = 4% Annual, Net Income = 3% of Real Estate Value. Thoughts?
Hey, New Investor, It's Leona with Leona Estates. My team and I work in property acquisition and disposition for investors. We work with multifamily properties. I will be happy to work for you.
Leona
Buckingham Investments has good SoCal market info posted on their site.
#2 House Hacking Contributor
- Real Estate Agent
- Los Angeles, CA
Once you start getting to the 5+ units, it is more about the actual rents coming in to determine the value.
Sometimes it makes sense to sell, sometimes it doesn't. Check on LoopNet.com and see what comparable properties are listed for and what rents they are getting. That will give you an idea.