Torrance, CA · Member since 2014 · 19 posts · 4 votes
Hi,
I have been trying to find a good deal (something that cash flows) in a good or at least decent area in Los Angeles for a while but I have yet to find anything.
(The cities I have look into are: San Pedro, Long Beach, Harbor City, Torrance and Lawdale)
Everytime I do the analysis, I come short and instead of cash flow, I have to pay out of my pocket.
I'm a new investor but I have studied the process of buying rentals for a while and I have a very good understanding of the complete deal analysis.
Any suggestions or advice on what I might be doing wrong will be great.
Or is it that the Los Angeles market is too expensive and there are not too many properties that have possitive cash flow in them?
Real Estate Agent · Los Angeles, CA · Member since 2009 · 146 posts · 75 votes
11y
If you don't have an agent I have a good one for you by Elysian Park (Silver Lake in Los Angeles area). My client is hesitating to pull the trigger on it (more for legal reasons at the moment) but it's a great deal that just came out on the market yesterday. 4plex under $700K. You can do FHA on it with 3.5% down and it will still cash flow. I'll be putting details of it later today on my blog... But you ca PM me anytime.
Real Estate Agent · Los Angeles, CA · Member since 2009 · 146 posts · 75 votes
11y
If you don't have an agent I have a good one for you by Elysian Park (Silver Lake in Los Angeles area). My client is hesitating to pull the trigger on it (more for legal reasons at the moment) but it's a great deal that just came out on the market yesterday. 4plex under $700K. You can do FHA on it with 3.5% down and it will still cash flow. I'll be putting details of it later today on my blog... But you ca PM me anytime.
Investor · Los Angeles, CA · Member since 2014 · 57 posts · 46 votes
11y
Hi Ewa,
Is this your listing? If so, call me back! ;) I'm pretty sure I called on the listing you are referring yesterday when it hit and wasn't able to get a hold of listing agent yet.
Mario,
Like you're seeing here, LA is very competitive. If Ewa and I are talking about the same property, I'd imagine that it has multiple offers already. You should look at what you can add value to, as buying turn key market deals in LA isn't going to cashflow well at all. You can do deals in LA, you just have to get creative on how to add value to them, hustle, and fight tooth and nail to get them.
Investor · Los Angeles, CA · Member since 2014 · 57 posts · 46 votes
11y
I didn't mean that to be discouraging, as there is money to be made in LA. You just have to put the work and the hustle into securing the deal, renovating, relocating tenants, and renting higher. If done right, you'll cash flow well and force appreciation. I love the LA market for the opportunities I do manage to put together.
If you are looking for a passive investment where you simply just write a check, hire a PM and cash flow, LA is not the market.
Investor · Los Angeles, CA · Member since 2010 · 116 posts · 36 votes
11y
@Ewa Reza - I saw that deal too. I suspect it will go for $200K+ above listing price. The listing agent probably had no idea what he had on his hands when he put it on the market. Still, even at that higher price, I think its a good buy if you can get the tenants out!
Investor · Las Vegas, NV · Member since 2015 · 44 posts · 33 votes
11y
If you are looking for cash flow properties, don't limit yourself to your backyard. You won't use them personally, and if you need to see them, visit once a year for the tax write off (consult a professional on that). We are in Las Vegas, and it is amazing how people will take a 3% cap in CA when there are 8-15% caps in NV, AZ and FL. SFR, Multi's, apartments and some commercial even. Just my advice, look in the markets where your money will do more.
Torrance, CA · Member since 2014 · 19 posts · 4 votes
11y
Vegas is a city where I'm actually looking at investing in.
Can you tel me from your own experience,
what would you suggest in Vegas, Multi units or SFRs?
I have looked at multi-units , but every time I see a nice 4 unit building that I get interested in, the building is a clusters of apartment buildings with for rent signs all over them.
It makes me wonder if buying SFRs would be better.
Real Estate Agent · Los Angeles, CA · Member since 2009 · 146 posts · 75 votes
11y
@Eyal B. I'm not a listing agent. But this is my backyard that I research daily and I've got good contact with the listing agent... I also work with a couple of investors that look more less in this area.
@Josh Prince Why would you get rid of tenants? These rents are not far off from market value. $200K+, ha? I don't think it's gonna go that far up. These are extremely small units.
Nonetheless it's a great property. My heart is bleeding I can't buy it myself right now :(
Investor · Los Angeles, CA · Member since 2010 · 116 posts · 36 votes
11y
@Ewa Reza 2 of the occupied units look well under market to me - new tenants and rehab could allow for much higher rents. It's breathtaking what people will pay for a charming unit in that part of town.
I am interested to see what this sells for, but I would be surprised if it went for under $850k.
I am sure you are up on recent sales, for example 1506 Sargent at $1.25M for 6 units?
Realtor · Torrance, CA · Member since 2014 · 49 posts · 29 votes
11y
@Mario Lara I have rentals here as well as out of state. There are ways to invest in Real Estate here but the "buy and hold" method for cash flow is much more challenging unless you have a big down paymnent. My best cash flow properties are here but I bought here in 2000 before prices went crazy. I then used equity in my first duplex to buy properties in Texas, Arizona, and Nevada.
So it really depends on how much down payment you have to work with. If your funds are limited I'd look out of state or even in Riverside or Palmdale. ( thats if you are looking for cash flow)
Yes it is rent controlled. that is why I said "if" you can get the tenants out. Of course you cannot force them out but perhaps you can negotiate a mutually beneficial arrangement.
Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
11y
I personally cannot see buying in a rent control area. I have seen what is happening to a fellow investor and the pain he is going through to control his property. It would have to be an absolute steal.