do 7cap or better even exist in los angeles?

[Alex J.]

hey all

Los Angeles investors I need some help/insight!

I am looking to do a 1031 exchange on one of my properties and its sounding like i might be getting an offer worth selling for...the problem is i just did a search around town and I am not really finding anything thats better than a 5-6cap 

Does anything better than a 6 cap exist in los angeles anymore?  I am looking at a range of 500k-2m  and striking out pretty bad

[Archie Robb]

Hi @Alex J.

In order to get a better cap you'll have to do some work. It's damn near impossible to buy a property that's above a 5-6 cap. If one is listed it usually goes extremely fast and all cash buyers will most likely get it. Many investors in LA are relocating the tenants and remodeling/rehabbing the units to up the rent and then refinancing. This usually turns into an additional hundred grand or more (depending on the number of units) spent on the initial purchase price but then it allows rent increases that offer a much better return.