Any multi family investor more then 20 units or building large apartments based in LA on here?
How did you overcome the price as it’s really expensive out here. How did you deal with the city, permits. Do you self manage?
Hi Alan, Most investors I know in this current market wouldn't buy their own complexes at their current cap rates. On the development side, the current price per square foot isn't worth it, those I know currently in development had contracts with their contractors before the rates began to climb higher and higher. When it comes to permits, every city is different. Ie. I'm working with the city of South Pasadena right now and they are significantly more challenging than LA. And for the self-managing part, most I know will have a live-in maintenance/ manager for a 20 unit, but thats really up to you if you are planning on living in the complex yourself? or attempting to manage from far?
A lot of questions to answer but to each their own on how you choose to invest and whats right for you.
I agree with @Nabil Suleiman, most investors I know that own large multi family properties in LA, have been in the business for a number of years, and bought 4 years ago or more. Due to some areas not having rent control, the cap rates that they are trading @ can be extremely aggressive, I have seen as low as 3% based on pure speculation and projections.
If you are dead set on buying multi family in LA, I would recommend trying to meet as many younger commercial brokers, and find a way to be their first call when they find an off market complex and move quickly because they will go fast. From my experience in buying and selling multi family in other hot markets around the country, the key becomes trust with as many brokers as possible who will call you when they have a deal before one of their other investors.
Good Luck man, don't hesitate to reach out with any other questions.
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