Non Rent Controlled Cash Flow Areas Near Los Angeles?

20 Replies

Hey Everyone,

I'm looking for recommendations withing 1-2 hours of LA of places that don't have rent control and have decent cash flow options. San Bernadino, Oxnard, etc. SFR or multis.

Thanks for your input!

1-2 hrs could be 10 miles. hehe.

Try up in antelope valley - Palmdale, Lancaster.

Rialto is having a major renaissance. The City of east LA does not have rent control but is close to DTLA.

Also Twentynine Palms and Yucca Valley in the mountains near Palm Springs and Joshua Tree Natl Park.

Neighboring Kern County just an hour or two North of Los Angeles is a great place for cash flowing non-controlled rental properties within a short drive of LA.  Pretty much all my clients from LA buy properties a few hours outside of LA, most oftentimes in the Central part of the state.  LA itself is a nightmare for finding cash flow, but I think you'd be surprised at the cash flow opportunities just an hour or two North.

Cash flow really depends on how much you're willing to put down and what condition the property is in.  A lot of what I have seen for multifamily especially is properties that are below market rent, but once rehab is complete and rents are raised they should cash flow modestly.  the Inland Empire also has very little to zero rent control, so it is a good option.

not what you're asking, but I just sold my California properties and bought in Kentucky because california is very tenant biased.  I haven't looked much into Palmdale but I know a few people who rent there. Most of them do so via section 8 and it'd probably go so far as to call Palmdale/Lancaster downmarket.  

Originally posted by @Max Gradowitz :

Neighboring Kern County just an hour or two North of Los Angeles is a great place for cash flowing non-controlled rental properties within a short drive of LA.  Pretty much all my clients from LA buy properties a few hours outside of LA, most oftentimes in the Central part of the state.  LA itself is a nightmare for finding cash flow, but I think you'd be surprised at the cash flow opportunities just an hour or two North.

 Hey Max, interesting info. What kind of cash flow does Kern County offer? 

Originally posted by @Ali Boone :
Originally posted by @Max Gradowitz:

Neighboring Kern County just an hour or two North of Los Angeles is a great place for cash flowing non-controlled rental properties within a short drive of LA.  Pretty much all my clients from LA buy properties a few hours outside of LA, most oftentimes in the Central part of the state.  LA itself is a nightmare for finding cash flow, but I think you'd be surprised at the cash flow opportunities just an hour or two North.

 Hey Max, interesting info. What kind of cash flow does Kern County offer? 

As mentioned before, cash flow in the form of a dollar value will ultimately depend on the financing situation (how much you put down, how your loan is amortized, etc).  But for some objective numbers, I tend to see simple cap rates ranging around 7 to 10 percent, sometimes as high as 12 or 13 percent.  Your typical good triplex or fourplex in the $200k to $300k price range will usually get you a couple hundred per door after all estimated expenses and accounting for a conventional mortgage.

Can you send one of those triplex or fourplex listings to me to check out? Either to my email or direct message on here? I'd like to look at it....could be something I'd be interested in. It sounds too good to be true, so curious to see one laid out. But if it all really does pan out as you say it does, I could actually be interested (and I'd have lots of buyers who would be as well).

@Max Gradowitz Whoops, forgot to tag you. See previous response

Originally posted by @Manolo D. :

1-2 hrs could be 10 miles. hehe.

 No doubt. One would need to time their drives accordingly or add a couple hours.

Kern County areas are not that much of a mystery, just check the mls to get a general idea.

Here is a triplex example today.

Triplex 270k

Rents 2100 maybe a little under market and maybe could support $2300-$2400.

Rates a little better than national average for rent collectability.

Good luck Nick!

Las Vegas, 4 hours from LA.

@Ryan D. - Thanks for the suggestions, I'll check those areas out.

@Max Gradowitz - I love Kern County for backpacking, I'll definitely start exploring the cash possibilities up there.

@Aaron Klatt - Absolutely! I'm a huge believer in value adds. Any place specifically in the IE?

@Christy Gaines - I understand, I had a rental in Virginia and have a 4 unit in Missouri. The COC ROI is very different then California! I'll also check out Palmdale/Lancaster.

Thanks everyone for the great suggestions! 

@Matt R. - I like it Matt, thanks for the numbers. Definitely some potential in Kern. My goal is to buy a weekend/retirement house their one day.

Originally posted by @Nick Hedberg :

@Matt R. - I like it Matt, thanks for the numbers. Definitely some potential in Kern. My goal is to buy a weekend/retirement house their one day.

 Right on. Kern County is very large and has a very diverse RE landscape...mountains near 10,000 ft, city, suburbs, country, farms, oil, lakes, rolling hills and everything in between. When oil comes back in the saddle it will get even stronger. Plus some very large mega developments, casinos etc...in the works. I have almost bought a couple and the opportunity is there for the taking for anyone in LA LA land. Some areas of Kern county are actually very close to LA too. Keep us posted!

Good luck!

@Nick Hedberg looking at Bakersfield would be good.  No rent control and there is a pretty solid growth plan in place for the future.  If you're interested I can share some of the plans with you.  I would definitely caution when moving into some of the more small communities due to vacancy rate, and rental rates, but there are some good deals to be had in these markets as well.  

@Ali Boone Kern County does offer good cash flow, and is definitely worth looking at due to the lower price point and actual cash flowing properties, as opposed to the LA market right now.  It really depends on the type of property you are looking for and the area in which you are willing to deal in.  For example, if you look at multi-family you will see a 5.5-8.5% cash flow rate at the lower levels, which can level up as you get into the commercial multi properties.  If you are looking for class A properties you will most likely be held under 6.5% c-o-c right now due to the competition in the market.  But still if you are looking for the old days with the 10% c-o-c returns you will have to venture into the C-/D/F neighborhoods.  I would definitely caution against this and talk to people you trust about the areas you invest in because I have seen some investors make some detrimental decisions because they did not research the areas.  

Originally posted by @Manolo D. :

1-2 hrs could be 10 miles. hehe.

 Isnt this the truth!

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here