Trying to understand where the real deals are right now in CA
Member since 2026 · 3 posts · 1 vote
Trying to understand where the real deals are right now in CA
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Landon ReidPro Member
Investor · South Jordan, UT · Member since 2026 · 62 posts · 38 votesTyree — in LA County right now, the "real deals" are hiding behind complexity that most investors won't touch. That's where the edge is.
Here's what I mean:
The easy stuff (turnkey SFR, clean flip in a good neighborhood) is priced to perfection. Everyone's competing for it, which is why the numbers don't work.
Where deals still exist in CA:
1. Properties with ADU potential that the seller didn't price in. California's ADU laws are some of the most permissive in the country, but most sellers (and their agents) don't know what their lot actually allows. A SFR on a 6,000+ sqft lot in LA that's zoned for an ADU can be worth $150-300K more than what it's listed as — but only if you check the zoning, setbacks, and buildability BEFORE you offer.
2. "Problem" properties where the issue is actually a zoning or permitting question, not a physical one. Unpermitted additions, nonconforming uses, properties with code violations — these scare retail buyers but they're often fixable if you understand the local code.
3. Infill lots or teardowns where the land value exceeds the improvement value. But you HAVE to know what's buildable on that lot before you buy. I've seen investors pay for teardowns only to find out the lot couldn't support what they planned because of setbacks, hillside overlays, or height restrictions.
The common thread: the edge in CA isn't finding deals on Zillow that everyone else missed. It's being able to quickly evaluate what a property COULD become based on its zoning and buildability — something 95% of investors skip.
Being super selective is the right move. But selective based on what? Most people are selective on price. The smarter filter is: what can I legally build here, and does that buildable product pencil at today's costs?
8 Replies
- 6moLandon ReidPro MemberInvestor · South Jordan, UT · Member since 2026 · 62 posts · 38 votes
Tyree — in LA County right now, the "real deals" are hiding behind complexity that most investors won't touch. That's where the edge is.
Here's what I mean:
The easy stuff (turnkey SFR, clean flip in a good neighborhood) is priced to perfection. Everyone's competing for it, which is why the numbers don't work.
Where deals still exist in CA:
1. Properties with ADU potential that the seller didn't price in. California's ADU laws are some of the most permissive in the country, but most sellers (and their agents) don't know what their lot actually allows. A SFR on a 6,000+ sqft lot in LA that's zoned for an ADU can be worth $150-300K more than what it's listed as — but only if you check the zoning, setbacks, and buildability BEFORE you offer.
2. "Problem" properties where the issue is actually a zoning or permitting question, not a physical one. Unpermitted additions, nonconforming uses, properties with code violations — these scare retail buyers but they're often fixable if you understand the local code.
3. Infill lots or teardowns where the land value exceeds the improvement value. But you HAVE to know what's buildable on that lot before you buy. I've seen investors pay for teardowns only to find out the lot couldn't support what they planned because of setbacks, hillside overlays, or height restrictions.
The common thread: the edge in CA isn't finding deals on Zillow that everyone else missed. It's being able to quickly evaluate what a property COULD become based on its zoning and buildability — something 95% of investors skip.
Being super selective is the right move. But selective based on what? Most people are selective on price. The smarter filter is: what can I legally build here, and does that buildable product pencil at today's costs?
- 6moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 968 votes
Quote from @Tyree Johnson:
I’ve been seeing a lot of deals lately that don’t really make sense unless there’s a decent amount of work needed.
Curious how people who are actually buying right now are looking at things. Are you being super selective or still finding deals pretty consistently?
You’re not wrong. Most on-market deals in CA right now only make sense if you’re taking on heavier value-add, so a lot of buyers are getting way more selective or just skipping them altogether. That’s why many active investors are shifting out-of-state into Midwest markets, where you can still find under-valued deals that cash flow without needing massive rehabs. It really comes down to going where the numbers actually work, and right now that’s not as common in California unless you’re playing a very specific strategy. - Financial Advisor · Tallahassee, Americas · Member since 2025 · 25 posts · 10 votes6mo
@Tyree Johnson, I agree with the both of you. The deals aren't obvious right now, they're buried in complexity.
As a former underwriter for private money, I've seen most people focus on price instead of feasibility. The real edge is understanding what a property can legally become, not just what it is today.
ADUs, zoning issues and "problem" properties are where the opportunities are if you can properly evaluate them.
Curious, are you leaning more toward adding units and holding or still trying to flip in this market? - Member since 2026 · 3 posts · 1 vote6mo
@Tienna Matthews I’m kind of flexible right now. If the deal is strong enough I’ll flip it, but I’m not against holding if the cash flow and location make sense.
- Financial Advisor · Tallahassee, Americas · Member since 2025 · 25 posts · 10 votes6mo
That's actually the best position to be in.
The investors I've seen do the best are the ones who let the deal dictate the strategy, not the other way around. From the underwriting side, lenders love hearing that because it means you're thinking like they do. They're evaluating your exit strategy just as hard as the property itself. When you can clearly articulate both paths, flip or hold, it makes you a stronger borrower no matter which direction you go. Just make sure your financing is structured for flexibility too. A short term bridge loan gives you room to flip or refinance into a DSCR if you decide to hold. Lock yourself into the wrong product upfront and you lose that optionality. If you ever need assistance with financing feel free to submit your deal here.
Otherwise, I am always open to further discussion with assisting you in the right direction.
- 6moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Tyree Johnson:
I’ve been seeing a lot of deals lately that don’t really make sense unless there’s a decent amount of work needed.
Curious how people who are actually buying right now are looking at things. Are you being super selective or still finding deals pretty consistently?
You would need to first stop buying in Los Angeles @Tyree Johnson. Find a different market where it is landlord-friendly, your dollar goes much further, and where there is tech, job, and population growth.
Connect with an investor agent. Have him connect you with his team of lenders, contractors, property managers. Look at off-market deals and buy them 80-85% of its true-value in turnkey shape or buy them at 75% of ARV for BRRRR/Flip deals.
Make sure to watch out for location, condition (Roof, HVAC, hot water tank, electrical, foundation, and sewer scope), and rentability.
When you re-finance, make sure deal cashflows and breaks even.
ReafCo | Ahmed Group 533 Reviews Quote from @Tyree Johnson:
I’ve been seeing a lot of deals lately that don’t really make sense unless there’s a decent amount of work needed.
Curious how people who are actually buying right now are looking at things. Are you being super selective or still finding deals pretty consistently?
I am super selective. I do not actively invest in RE to do a little better than passive options. 20% annual return is a pass for me unless I benefit from the property via other means than the return.
>unless there’s a decent amount of work needed.
Value adds provide that initial return booster. Buying without a value add means not getting that initial return booster.. Have you heard the term sophisticated value add? They leverage a knowledge more than a level of effort (such as a rehab or addition).
there are so many paths in RE: alternate rent models, below market financing, sf/mf, commercial (storage units, industrial, office space, retail, large residential, NNN, etc). There is always a path for the educated RE investor.
The Midwest agents are marketing their area because they can financially benefit by sales in their market. I invite you to look up historical rent growth and appreciation in their markets versus your CA market. The reality is if you purchased any time in your ca market more than 5 years ago without a refinance, you made more cash flow and appreciation than virtually all the properties in their market. There is a reason those markets are cheap and it is not because they have experienced good rent growth or appreciation.Good luck
- 4moGarrett CrosbyPro MemberReal Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
Working this market daily as both an agent and investor here in LA/Ventura, and I think Landon and Dan are both pointing at the same truth from different angles — the deals are there but they require a specific lens to find them.
What I'm seeing right now: the deals that are moving have either a distress component (estate sale, divorce, deferred maintenance scaring off retail buyers) or a density play that the listing agent completely missed. The ADU/JADU angle is real — I've reviewed properties where the seller priced it as a plain SFR and the lot could support a 1,200 sqft ADU plus a JADU. That's not priced in. That changes the math significantly on a buy-and-hold when you're underwriting at today's rents.
To Alfath's point about leaving LA — valid strategy for some investors, but the long-term appreciation data in LA is hard to argue with, and rent control reform, Measure ULA context, and post-fire rebuilding dynamics are creating unusual pockets of opportunity right now if you know where to look. This is my local market, happy to chat through specifics if you want a ground-level perspective. Feel free to DM.
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