Real Estate Investor · Los Angeles, CA · Member since 2017 · 6 posts · 5 votes
BP Community,
Has anyone has success in acquiring Multi-Family properties in the LA area that cash flow upon purchase? How did you find these deals? Am I going to have to suck it up and buy a property that operates at break even or a loss until I can raise rents or can I find cash flow gems? Are there particular sub markets to focus on to give me a better chance without worrying about a buying in an unsafe area?
The market is so hot right now, most properties are being sold based on proforma or have unrealistic asking prices. I have cash and the desire to purchase, but having trouble finding good deals. Any advice or thoughts on this market would be appreciated!
I've had success with fixers that are underperforming. Nothing sexy. Improve it, add a couple of rental units and couple months later you have cashflow. I focused on properties that had been sitting for a while and had bad agenting. I tried to avoid rent control areas and got lucky.
There are ways to make it work, but you have to figure out what you're comfortable with have patience and be ready to act.
As a real estate agent and investor, I've had luck in Long Beach, Compton, San Pedro ,Inglewood and South Central LA. Any other areas are difficult because the of the current high LA prices. San Bernardino county, Inland Empire provides the best cash flow but the equity builds at a lower rate then that of the greater LA are. In my opinion, if you are an FHA buyer, chances are you will not be cash flowing upon purchase. However, at 25% conventional, there is absolutely no reason why you should not be cash flowing Day 1 on a triplex or fourplex.
I've had success with fixers that are underperforming. Nothing sexy. Improve it, add a couple of rental units and couple months later you have cashflow. I focused on properties that had been sitting for a while and had bad agenting. I tried to avoid rent control areas and got lucky.
There are ways to make it work, but you have to figure out what you're comfortable with have patience and be ready to act.
If you don't mind me asking, how are you financing your deals?
As a real estate agent and investor, I've had luck in Long Beach, Compton, San Pedro ,Inglewood and South Central LA. Any other areas are difficult because the of the current high LA prices. San Bernardino county, Inland Empire provides the best cash flow but the equity builds at a lower rate then that of the greater LA are. In my opinion, if you are an FHA buyer, chances are you will not be cash flowing upon purchase. However, at 25% conventional, there is absolutely no reason why you should not be cash flowing Day 1 on a triplex or fourplex.
As a real estate agent and investor, I've had luck in Long Beach, Compton, San Pedro ,Inglewood and South Central LA. Any other areas are difficult because the of the current high LA prices. San Bernardino county, Inland Empire provides the best cash flow but the equity builds at a lower rate then that of the greater LA are. In my opinion, if you are an FHA buyer, chances are you will not be cash flowing upon purchase. However, at 25% conventional, there is absolutely no reason why you should not be cash flowing Day 1 on a triplex or fourplex.
Agreed. Not sure what kind of deals everyone else is looking at, but everything we buy or look at in SGV and IE are cash flowing from day 1 (given 30-35% down payment). Latest one we have under contract will give ~5% cash on cash in the first year.
single family house in Palo Verdes or Manhatten Beach
ocean side
3 bed 2 bath
how much can i buy it for
PV and Manhattan Beach are two different markets, but probably at least $1.1 million, and that's probably for an OK house, more for a better one. I don't know that I would buy in those areas as an investment unless you find something that needs work and could be flipped, or you are prepared to hold it for a while, because prices are high, and cash flow is limited. For that price, you could buy a 4 or 5 unit in an area like Hawthorne or Gardena with some cash flow and lots of appreciation potential.
As a real estate agent and investor, I've had luck in Long Beach, Compton, San Pedro ,Inglewood and South Central LA. Any other areas are difficult because the of the current high LA prices. San Bernardino county, Inland Empire provides the best cash flow but the equity builds at a lower rate then that of the greater LA are. In my opinion, if you are an FHA buyer, chances are you will not be cash flowing upon purchase. However, at 25% conventional, there is absolutely no reason why you should not be cash flowing Day 1 on a triplex or fourplex.
Interesting, I''ve been looking at Compton (already invested in Gardena, and it's just a few miles away), and Watts, other parts of South LA. There are some good opportunities there, a bit of cash flow and I think the areas will continue to improve.