Investing in Long Beach: long-term potential?

Question

Hi all! I've been on the hunt for a buy-and-hold investment property duplex in LA County where I could live in one, rent the other, and cashflow after one year. South LA seems to be the only spot where this strategy is feasible, but the area isn't great and certainly decades from gentrification. I've since turned my attention to Long Beach, CA - where neighborhoods & properties are in much better shape for similar prices. However, rents are low.

I'd love to hear from any Long Beach and/or LA investors, brokers, general neighborhood experts - does Long Beach have long-term potential? Is it a wise area to invest in if I'm looking to buy-and-hold? Or is sticking to LA County a safer bet since rents are always on the rise?

Thanks in advance for your guidance!

Sophie

Damaso Bautista · Answer

@Sophie Latapie

If you can find a duplex in LBC with the idea of holding it long term, I think you will be fine.  What I mean by long term is if you are not overleveraged by the purchase and your plan includes contingencies for unpaid rent and a market correction you will come out on top in the long run.

Everyone is waiting for the market to drop, which could happen but If you are really long term and can survive a downturn, then the other side looks great financially.

Purist would never take this position but that is how I view it.

Good Luck!

Dennis Maynard · Answer

Sophie, all great questions.  It depends on your time horizon.  In the past, LA real estate has been high demand for rentals.  We are in the Covid period for a while in which we are seeing a trend towards suburbs and SFR. Rentals are under pressure across the board with the eviction moratoriums.   With this in mind, I like LBC.  I would say that a long term hold is not a bad consideration.  You will need to be able to hold it through the ups and downs.    There is a lot of growth in that area.  Let me know if you have further questions.  Happy to discuss.