Los Angeles County Real Estate Forum

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Spencer Wardwell
  • Los Angeles, CA
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Building from scratch in Los Angeles

Spencer Wardwell
  • Los Angeles, CA
Posted Jan 4 2022, 11:17

Hi all!

I'm looking to get some advice on my next real estate endeavor in Los Angeles.

My current goal is to not only make a wise investment, but I'd also like to upgrade my current living situation (I currently live in a 5br 2ba SFH in an "up-and-coming" neighborhood I purchased back in 2016, and want to live in a nicer neighborhood with fewer roommates).

Since buying in LA is insane right now ($900+ per sq ft.), I'm considering either buying a lot and building from scratch or doing an extremely extensive rehab on a very distressed property.

By the end of 2022, I expect to have about $250,000 in capital and have great credit. I figure I can get a loan of approx $1.25M and build / rehab a decent property with that money (where as simply buying wouldn't get me much).

Ideally, I'd get a 2/3br 2ba in a decent neighborhood and build an in-law-suite on the property, with the plan being to move into the in-law-suite and rent out the home.

Neighborhoods I'm looking at are in NE LA: Mt. Washington, Eagle Rock, Cypress Park, etc.

Any advice is appreciated!

Does anyone have any experience doing this? Any pitfalls I should be aware of or things to avoid? Is $250,000 enough capital to execute this plan? Pros & cons of building vs. rehabbing? Recommendations for build & design firms? Anything information helps!

Los Angeles County, California

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