Investing in the San Fernando Valley?

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Investing in the San Fernando Valley?

Richard Naimy
West Hills, CA · Member since 2018 · 23 posts · 9 votes
Hello my LA BP Peeps, Was hoping someone with experiences in buying Multi Family properties (4 units) in the San Fernando Valley could help with what is a realistic Cap Rate, Cash on Cash and NOI deal in our current market? Am I being unrealistic thinking I can find 8 to 10% Cap rate, or 10 to 12% cash on cash in the current market? Thanks for the help in advance :-) Richard
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Nabil SuleimanBusiness Member
Real Estate Agent · Los Angeles, CA · Member since 2016 · 596 posts · 299 votes
8y

@Richard Naimy

Hey Richard. For our area, those Cap's are definitely hard to find, but depending on how you are coming across deals there are numerous ways you can achieve 10-12% cash on cash.(I.e relationships/ off-market) If you are primarily using the internet and agents to find you deals it may be tough because most listings are attempting to sell closer to pro forma prices vs whats realistic to its current condition & rents. You are more likely to find those caps out of state or in rural areas of CA. I have had investors find multifamily deals that met their CAP expectations as far as 29 palms, you just have to be willing to take the drive.

Good Luck. 

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  • Nabil SuleimanBusiness Member
    Real Estate Agent · Los Angeles, CA · Member since 2016 · 596 posts · 299 votes
    8y

    @Richard Naimy

    Hey Richard. For our area, those Cap's are definitely hard to find, but depending on how you are coming across deals there are numerous ways you can achieve 10-12% cash on cash.(I.e relationships/ off-market) If you are primarily using the internet and agents to find you deals it may be tough because most listings are attempting to sell closer to pro forma prices vs whats realistic to its current condition & rents. You are more likely to find those caps out of state or in rural areas of CA. I have had investors find multifamily deals that met their CAP expectations as far as 29 palms, you just have to be willing to take the drive.

    Good Luck. 

    [email protected]661-904-1725
    Atlas Elm | Nabil Suleiman4.47 Reviews
    WebsiteView Page
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  • Samuel Pawlitzki
    Malibu, CA · Member since 2018 · 77 posts · 32 votes
    8y

    Hey @Richard Naimy,

    Ya for 'The Valley' I think 6-8% would be more realistic. I haven't seen anything close to 10%...especially not considering how hot/competitive the market is right now. 

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    8y

    If you are referring to the cap rate at purchase, then you are in Fantasyland at Disneyland if you are looking for 8 caps or better. In the SFV and surrounding areas of LA, multis are going for 3-5 caps. That said, if you can find a value add play and then increase the NOI after purchase, you may be able to add a few points to your purchase cap but getting anywhere close to 10 would remain a dream in this market. That said, nothing is impossible but I did want to point out the difficulties you would face looking for that.

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