Los Angeles, CA · Member since 2017 · 2 posts · 0 votes
Hi All!
I'm looking to identify my target location for my first real estate investment. I understand Los Angeles is a tough area to get started, but I believe I can find a way to make it happen. Before I do, I'm trying to understand the best location to make my first investment and I know gentrification is an important indicator to look at. Does anyone have any idea of some locations where gentrification is happening in Los Angeles?
Any thoughts or links to useful resources would be greatly appreciated.
I recommend avoiding the neighborhoods where gentrification has already started because the prices have already jumped, making it tough to cashflow. Look for the neighborhoods that will be next to change in a couple years. As I mentioned below, look at curbedla.com, urbanize LA, Los Angeles Business Journal and as much content as possible to gain an informational edge on where development will occur and that should be your next neighborhood to focus on. My fiance and I recently purchased a 4bd/2ba duplex near USC (Vermont Harbor area) for less than what it costs to purchase a standard SFR on Crenshaw. Also, look for pulled permits and transactions of larger multifamily properties in your target neighborhoods and you'll identify the larger investors. I've found that larger investors typically have an informational advantage or they have a project in mind.
We have a few flippers in the South Los Angeles area and as the elderly leave their homes and the local turnover increases, we're going to see more RE transactions and flips because these neighborhoods have homes that maintain a lot of character, they're still relatively affordable compared to the rest of LA, and the commute to DTLA is also really short (it takes us 15-30 minutes to get to DTLA depending on the traffic). Drive the neighborhoods and work your magic.
We also have a South LA BP meeting every month - our Facebook group (South Los Angeles Biggerpockets Meeting) has meeting updates and we also post the events on BP. Hope this helps!
Los Angeles, CA · Member since 2016 · 62 posts · 20 votes
9y
Look into Boyle Heights. Downtown is getting so expensive lots of people are starting to look at it. Rents are getting pretty high as well for renovated units close to 1st st. Obviously the closer you are to Downtown the better.
Cincinnati, OH · Member since 2016 · 116 posts · 83 votes
9y
Archie Robb is right about Boyle Heights. I live there and can see the changes happening. I would consider 3 developments in that area.. the new 6th street bridge, gold metro line extension into expo line, and redevelopment of the old Sears building. Buying a property near those hot spots might get you some extreme appreciation. But thats just my speculation, take that with a grain of salt.
Cincinnati, OH · Member since 2016 · 116 posts · 83 votes
9y
Kevin, I think you are late to the party in those areas... Houses go for 800k - 1.2 mil. South Central might be a good place to look, but it will probably take 3 - 4 years before things really take off there..
Los Angeles, CA · Member since 2013 · 19 posts · 13 votes
9y
I'd have to say not too late since I still see a lot of flip deals going on there. Not sure how much net profits these flippers are seeing, but I'm seeing purchase prices of low 600s with sales prices of 850k+
Not sure how much more that area can sustain though.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
9y
I agree about Boyle Heights given it being right next to Downtown L.A and the arts district. There has been quite a bit of backlash against gentrification in the area and some protesting, but i'm guessing it's not too likely to affect housing prices . If not for rent control and the difficulty of developing new property in L.A , areas like Boyle Heights would already be quite gentrified I am sure with many new developments.
The thing in L.A is that even gentrified areas are still pretty expensive, so it's going to be hard to cash flow.
Highland Park , Glassel Park seems to have a lot of those hipster type flips that are selling for good money. Personally I think the prices in that area have gone crazy as you can get bigger homes in nicer safer areas like parts of the valley for less...but Downtown and the neighborhoods more east have become really popular over time.
I look at other cities and you see homes in' up and coming..kind of rough areas' for a fraction of the cost of the 'nice' areas, but that's not how it is in L.A
I think NoHo Arts district will become more desirable and there are more and more businesses opening there and new large developments, but property is still pretty high there.
You are talking like $600,000+ for a home there , what is it going to go up to? I guess that's the question.
People are also talking about Inglewood because of the new stadiums and development going on there too..but again it's not even cheap now.
South Central / Inglewood. We just bought a SFH off Crenshaw and Slauson. It will be a Gold Mine in 5 years
As an L.A native, It's kind of crazy to hear people saying South Central or Inglewood will be the next hot area. Of course many other neighborhoods have gone up that many probably never expected like Echo Park, Highland Park etc.
Prices have gotten nuts in Culver City which used to be affordable , but now I see homes are over $1 for smallish homes..
Does the property currently cash flow? What do you expect it to be in 5 years? Do you buy off the MLS or off market deals?
South Central / Inglewood. We just bought a SFH off Crenshaw and Slauson. It will be a Gold Mine in 5 years
As an L.A native, It's kind of crazy to hear people saying South Central or Inglewood will be the next hot area. Of course many other neighborhoods have gone up that many probably never expected like Echo Park, Highland Park etc.
Prices have gotten nuts in Culver City which used to be affordable , but now I see homes are over $1 for smallish homes..
Does the property currently cash flow? What do you expect it to be in 5 years? Do you buy off the MLS or off market deals?
Sorry for the late response. It will actually be our personal residence. The wife and I bought a condo years ago in Santa Monica and it's done quite well. We kept the condo (bought for $440k and now appraised at $650k) and will be renting it out at $2800/month (mortgage / HOA is $2405).
We bought in South LA / Inglewood boarder because of lots of development happening in the area. We plan to move out of LA in the next 5 years, but with everyone being priced out of the Westside with Baldwin Hills Mall, Crenshaw line, Rams Stadium, parks and lakes they are putting in...etc... we hope it appreciates nicely in the next 3 - 5 years.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
Regarding Inglewood this recent article is pretty interesting
---
Inglewood exploring new development plan
New residential, office, retail and green spaces could shape up around the city’s Metro stations
https://therealdeal.com/la/2017/11/08/inglewood-exploring-new-development-plan/
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
Kuba F.
Jefferson is Jefferson Park ?
I should check out the area sometime as I haven't been for a while . Used to be around there back in the day as I went to USC.
Also would like to check out the new USC Village sounds pretty awesome .
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
Kuba F. Yeah I know West Adams has been a desirable area for a while because of the architecture . But now with Downtown L.A becoming so popular it's even hotter and looks like it's spread to other parts of South L.A. Plus all the development plans for Inglewood too .
I noticed some nice flips in South L.A with really nice staging but saw they seemed to be sitting on the market a while.
I was thinking they had maybe been done by the same flipper since they had a certain look .
These were homes that looked like they were bought off market for low prices like $250,000
Rental Property Investor · Culver City, CA · Member since 2012 · 403 posts · 246 votes
8y
I've been told some buyers are offering homeowners in Jefferson Park 10% over retail in cash. That neighborhood is on fire. Has been for a bit. No shortage of wholesalers/flippers/investors trying to get in there. Know people who have door knocked the entire neighborhood.
I think South LA is interesting. There's even a newish BP meetup group down there run by @Account Closed. I have yet to make it, but want to.
Los Angeles, CA · Member since 2016 · 156 posts · 113 votes
8y
Hey @Jason Carter, thanks for the mention haha. South Los Angeles encompasses a lot of various neighborhoods such as Leimert Park, Vermont Harbor, West Adams, Inglewood, Crenshaw District, Watts, South Central, etc (I think our first handout identified 14 different neighborhoods) but I do recommend driving the various neighborhoods because each one has their own activity and development going on.
If you want to learn about future projects in a neighborhood, I strongly recommend checking out CurbedLA.com and Urbanize LA. Also talk to the local councilmen and police because they're pretty aware of future projects. I think our neighborhood (vermont harbor) will start getting hot in 2018 when they break ground on the George Lucas Museum and the Honda Dealership is erected. Also, check zillow neighborhood report to see what properties are moving and you can check Next Door App to see how many properties in a neighborhood are on the market. Hope to see you at the LA County Holiday Meeting tomorrow and also a future South LA BP meeting!
I recommend avoiding the neighborhoods where gentrification has already started because the prices have already jumped, making it tough to cashflow. Look for the neighborhoods that will be next to change in a couple years. As I mentioned below, look at curbedla.com, urbanize LA, Los Angeles Business Journal and as much content as possible to gain an informational edge on where development will occur and that should be your next neighborhood to focus on. My fiance and I recently purchased a 4bd/2ba duplex near USC (Vermont Harbor area) for less than what it costs to purchase a standard SFR on Crenshaw. Also, look for pulled permits and transactions of larger multifamily properties in your target neighborhoods and you'll identify the larger investors. I've found that larger investors typically have an informational advantage or they have a project in mind.
We have a few flippers in the South Los Angeles area and as the elderly leave their homes and the local turnover increases, we're going to see more RE transactions and flips because these neighborhoods have homes that maintain a lot of character, they're still relatively affordable compared to the rest of LA, and the commute to DTLA is also really short (it takes us 15-30 minutes to get to DTLA depending on the traffic). Drive the neighborhoods and work your magic.
We also have a South LA BP meeting every month - our Facebook group (South Los Angeles Biggerpockets Meeting) has meeting updates and we also post the events on BP. Hope this helps!