Looking for Apartment Rental 2-10 in California

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Looking for Apartment Rental 2-10 in California

Involved In Real Estate · Los Alamitos, CA · Member since 2014 · 22 posts · 0 votes

Hello All,

I am looking to buy apartments with 2-10 units, class C-C or better and with Cap rates of 7+. The locations that im looking for are in the (California) Los Angeles Areas, Orange County, IE, San Bernandino, Riverside, San Diego and Bakersfield. Really looking for properties that have potential of add value with sweat equity. Wholesales, short sales, and REOs are good. But will look at anything that makes sense. Thank you.

Ed Ponce

562-882-1036

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  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    10y

    Hey Ed,

    How much work are you willing to do on the properties in order to get that 7+ cap?

    At least in San Diego, you may be looking at some pretty extensive rebuilds/added sqft projects. Let me know!

  • Developer · La Jolla, CA · Member since 2016 · 23 posts · 8 votes
    9y

    Hi Ed - I realize that you posted a year ago, but I have a three-unit property under contract with a large buildable lot. My plan was to build out 5 new homes, but I now need to move on.

    This is a great project for a house hacker, flipper, buy/holder, or developer of new inventory in SD. Collect triplex rental income while developing the lot for buildout.

    I've been looking at this under three separate scenarios:

    Scenario A: Teardown and build on RM 1-1 lot. (15,814sf lot supports 5 units)

    5 1,800sf units

    3bdr/3ba 2-car attached garages

    $2.4MM all in for acquisition, lot development, construction.

    $3.125MM exit at $625k/unit ($347.22/sf). Pro forma and due diligence available upon request.

    Scenario B: Buy/hold

    $5,400/mo gross=$64,800/yr x14 GRM - $907,200 theoretical value.

    Effective cap rate at purchase = 7.5

    Value at prevailing cap of 4%, at $47,620 NOI = $1.19MM

    Scenario C: Flip

    Purchase: $650k

    Rehab: $60k

    ARV: $930k

    Happy to share analysis and due diligence upon request.

    I have this property under contract at $650k right now, closing set for 1/24, but could be extended. Here's the listing:

    https://www.redfin.com/CA/San-Diego/7478-Hyatt-St-92111/home/5225746

    Thanks for taking a look and considering.

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