Duplex not selling in Los Angeles

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Duplex not selling in Los Angeles

Lola Ajilore
Investor · Rockville, MD · Member since 2012 · 5 posts · 2 votes

Hello All,

I have a duplex that I put on the market in Los Angeles 30 days ago and it has been really slow for showings and no offers.  One of the units is vacant and updated which I thought would make for a good owner occupier opportunity, as that is how I used the duplex before moving across the country.  The rented unit is bringing in $1750 which is just a little below market rate and the tenants are very stable and have been in the property for 5 years.  I thought I would put it here to get some input from the community as to what I could be doing better in order to get it sold or if the market is just a little difficult right now for multifamilies in LA.  Thank you!

https://www.redfin.com/CA/Los-...

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Nick Hedberg
Real Estate Agent · Venice, CA · Member since 2015 · 182 posts · 125 votes
5y

West Adams is RED HOT right now. Anything reasonably well priced will have a ton of showings and get snapped up with multiple offers. You are on a very busy street which has a major impact on value. Many people looking to live in the property won't consider living off a busy street. 2nd is the property is tenant occupied which makes it harder to sell, especially during Covid.

In West Adams 31 DOM means it's overpriced. Either buy out the tenant or lower the price. 

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  • Carmen Dettloff
    Investor · Bellevue, WA · Member since 2018 · 37 posts · 43 votes
    5y

    Hey Lola, Your listing is super cute! But duplexes can be slower to sell and it is a slower time of the year. 

    Are you under contract with a relator? Do you have to pay them a fee if you find a buyer? I have sold several houses on craiglist before. But you can't be under contract when you self-list it on CL. I always list it for 3-5% off what the list price would be since I am not paying for a relator. Many investors love getting a good deal this way and you might be surprised at the interest level. 

    Good luck, 

    Carmen Dettloff

    BigfootEquity.com

    0Reply
  • Jonathan Barr
    Rental Property Investor · Los Angeles · Member since 2019 · 146 posts · 101 votes
    5y

    Hi I would repaint the exterior give it a little more pop.   If you can use of the parking area to create some more outdoor space I think that could be huge.   Removing some of the concrete pad and putting some grass for like dog run I think could be a big plus.   If you possibly easily vacate the other unit I think it'll make easier for you. Though I know with rent control that would be tough.

    0Reply
  • Marco G.
    Investor · Dallas, TX · Member since 2015 · 446 posts · 197 votes
    5y

    @Lola Ajilore

    Is it a 4bd 4ba as the headline states, or 4bd 2.5 ba as the details state (2+1 and 2+1.5)? The walk through garage comment is hard to understand as well.

    The photos looks nice, I’m guessing that’s the vacant unit. What does the occupied unit look like? Has the tenant been paying?

    The moratoriums are probably making people anxious.

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    5y

    You are only showing the vacant unit?  where is the other unit.  I count 5 pictures of the couch and are there 3 pictures of the same bathroom when you have 2 bathrooms?  The duplex part isn't highlighted and I would not say non-rent controlled (because a quick read might miss the non).  I would just say something that targets owner occupants like rent one unit at market rate and owner occupy the other. Highlighting that it is a duplex. 

    0Reply
  • Nick Hedberg
    Real Estate Agent · Venice, CA · Member since 2015 · 182 posts · 125 votes
    5y

    West Adams is RED HOT right now. Anything reasonably well priced will have a ton of showings and get snapped up with multiple offers. You are on a very busy street which has a major impact on value. Many people looking to live in the property won't consider living off a busy street. 2nd is the property is tenant occupied which makes it harder to sell, especially during Covid.

    In West Adams 31 DOM means it's overpriced. Either buy out the tenant or lower the price. 

    6Reply
  • Amelia G
    Realtor · Las Vegas / Los Angeles · Member since 2020 · 32 posts · 14 votes
    5y

    For someone who needs the tenant occupied unit rent to qualify for financing, the amount under market the rent is could be an obstacle.

    Mostly the description doesn't highlight the benefits of it being a duplex and the great location. In that market, I'd target owner occupants who could afford to buy in this instance but not otherwise.

    0Reply
  • Lola Ajilore
    OP
    Investor · Rockville, MD · Member since 2012 · 5 posts · 2 votes
    5y
    Hi Carmen,

    Thanks for your reply.  I am under contract with a realtor so this option isn't going to be available to me.

    Originally posted by @Carmen Dettloff:

    Hey Lola, Your listing is super cute! But duplexes can be slower to sell and it is a slower time of the year. 

    Are you under contract with a relator? Do you have to pay them a fee if you find a buyer? I have sold several houses on craiglist before. But you can't be under contract when you self-list it on CL. I always list it for 3-5% off what the list price would be since I am not paying for a relator. Many investors love getting a good deal this way and you might be surprised at the interest level. 

    Good luck, 

    Carmen Dettloff

    BigfootEquity.com

    0Reply
  • Lola Ajilore
    OP
    Investor · Rockville, MD · Member since 2012 · 5 posts · 2 votes
    5y
    Hi Jonathan,

    Thanks for your reply.  I will consider repainting the outside as it could use some help. The property isn't actually rent controlled (built in 1989) but the current tenants are almost at market rent and have been very steady for the past five years with rent increases every year except this year.  I will see what I can do for the backyard. The area is rather narrow so I thought parking would be a better amenity than yard space but I will look into it.  Thanks again.

    Originally posted by @Jonathan Barr:

    Hi I would repaint the exterior give it a little more pop.   If you can use of the parking area to create some more outdoor space I think that could be huge.   Removing some of the concrete pad and putting some grass for like dog run I think could be a big plus.   If you possibly easily vacate the other unit I think it'll make easier for you. Though I know with rent control that would be tough.

    0Reply
  • Lola Ajilore
    OP
    Investor · Rockville, MD · Member since 2012 · 5 posts · 2 votes
    5y
    Hi Marco,

    The tax records have that as the bathroom count but it is 2+1 and 2+1.5 in actuality. It was listed that way as well when I purchased. The existing tenants have been on time and never late in 5 years. They actually overpaid this summer when they received their UI benefits so I thought they would be a bonus to someone who was looking to have some of their mortgage paid by a tenant. As for condition, it was updated before they moved in and they have been good about maintenance issues so it should only require light cosmetic work if they were to move out. I do understand that the moratoriums could be causing concern though for prospective buyers. Thanks for your reply!

    Originally posted by @Marco G.:

    @Lola Ajilore

    Is it a 4bd 4ba as the headline states, or 4bd 2.5 ba as the details state (2+1 and 2+1.5)? The walk through garage comment is hard to understand as well.

    The photos looks nice, I’m guessing that’s the vacant unit. What does the occupied unit look like? Has the tenant been paying?

    The moratoriums are probably making people anxious.

    0Reply
  • Claudio Salvatorelli
    San Diego, CA · Member since 2020 · 150 posts · 54 votes
    5y

    Hello Lola,

    In my opinion, this property is going to fly off the shelves. Probably you just need to wait until 2021, after the new economical forecast is projected and the Federal Reserve along with the congress agree on the second stimulus package and Biden gets in the white house. 

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Looks like there is only pictures of 1 unit.  Id get pictures of the 2nd unit and also do a floor plan. It is not evident in the pictures that it is a duplex, so you want to tell that story with the pictures.  People are lazy, and click through pictures, but do not end up reading the descriptions....so there may be a number of people who click through a few pics without realizing its 2 units. 

    [email protected]301-893-4635Podcast Guest on Show #192
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    2Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    5y

    Price ALWAYS solves this problem.  If you don't have any offers, lower the price.

    0Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    5y

    @Account Closed it's not really an investment at $875k.  It's a residence with a little bit of income, $1750 a month, on the side.

    Based on the $875k pricetag, the taxes alone will over 11k.

    This property is for someone who wants to live in that area, but have a very small 'subsidy'.

    1Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    5y

    @Account Closed, this is the case everywhere.  Cap rates have been smashed to the point of ridiculousness.  Rents are not really affordable in much of Cali.

    Then the Cali person sells out, moves to NV, TX, or AZ, pays cash and drives up prices in the new locale.😱

    1Reply
  • Karl B.
    Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
    5y

    The staging is nice and I like the location. Price isn't bad. Maybe ask the selling agent to emphasize the advantage of owner occupancy: having a tenant pay a hunk of the mortgage is amazing. 

    I'm surprised there has been little interest. In September I sold my 1039 sq.ft. house in Crenshaw for stupid money (the price per square foot I got is ridiculous). 

    Don't fret - I'm confident you will sell. 

    0Reply
  • Steve Milford
    Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes
    5y

    @Lola Ajilore I am curious, are you selling a fridge or a piece of real estate? In my MLS, I use every character available to describe property (400+). Where is the flowing verbiage talking about how great the duplex is? Or all the updated features? Your marketing (pictures and marketing) needs to invite and if there is little movement then there are either few buyers or everyone has looked at it who is going too and the price needs to be adjusted.

    0Reply
  • Victor S.
    WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    are you getting any traffic at all, any feedback? I think Russell and Nick nailed it.

    i looked around your area using redfin and there are a lot of multis around you that have also been sitting for a while, so your 30 days is actually on the low side of things. your price/sq.ft is also near the top, so if you want to sell this one, you'll have to lower the price, from what very limited research i just did. 

    1Reply
  • Jon Schwartz
    Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    5y
    Originally posted by @Lola Ajilore:

    Hello All,

    I have a duplex that I put on the market in Los Angeles 30 days ago and it has been really slow for showings and no offers.  One of the units is vacant and updated which I thought would make for a good owner occupier opportunity, as that is how I used the duplex before moving across the country.  The rented unit is bringing in $1750 which is just a little below market rate and the tenants are very stable and have been in the property for 5 years.  I thought I would put it here to get some input from the community as to what I could be doing better in order to get it sold or if the market is just a little difficult right now for multifamilies in LA.  Thank you!

    https://www.redfin.com/CA/Los-...

    Lola,

    I'm a realtor who works with house hackers, and I was literally analyzing your duplex with a client on Monday!

    Long story short, it's priced too high for my clientele. I'm looking for duplexes that will allow an owner-occupant to move out and cashflow within three years max. At this price and by my math, a new owner-occupant is looking at 6 or more years until they can move out and cashflow.

    Are you enjoying Rockville? I'm from DC originally, and my family did all of our big shopping in Rockville.

    Best,

    Jon

    2Reply
  • Jon Schwartz
    Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    5y
    Originally posted by @Account Closed:
    Originally posted by @Jon Schwartz:
    Originally posted by @Lola Ajilore:

    Hello All,

    I have a duplex that I put on the market in Los Angeles 30 days ago and it has been really slow for showings and no offers.  One of the units is vacant and updated which I thought would make for a good owner occupier opportunity, as that is how I used the duplex before moving across the country.  The rented unit is bringing in $1750 which is just a little below market rate and the tenants are very stable and have been in the property for 5 years.  I thought I would put it here to get some input from the community as to what I could be doing better in order to get it sold or if the market is just a little difficult right now for multifamilies in LA.  Thank you!

    https://www.redfin.com/CA/Los-...

    Lola,

    I'm a realtor who works with house hackers, and I was literally analyzing your duplex with a client on Monday!

    Long story short, it's priced too high for my clientele. I'm looking for duplexes that will allow an owner-occupant to move out and cashflow within three years max. At this price and by my math, a new owner-occupant is looking at 6 or more years until they can move out and cashflow.

    Are you enjoying Rockville? I'm from DC originally, and my family did all of our big shopping in Rockville.

    Best,

    Jon

     ...what happened to "buying for appreciation" in LA? You've argued it a few times on these forums. Can't you sell them on that?

    Not if the cashflow is negative!

    It's incorrect to equate "buying for appreciation" to "buying with negative cashflow."

    I think this duplex is in a very good location for appreciation, but like I said, a house hacker is married to the property for 6+ years in order to avoid negative cashflow on move-out. I find deals in areas with as good or better appreciation prospects that cashflow within two years of hacking.

    I don't sell bad deals to my clients.

    0Reply
  • Rachel S.
    Investor · Los Angeles, CA · Member since 2019 · 127 posts · 63 votes
    5y
    Originally posted by @Account Closed:

    Just came back to this one. Wish the OP well of course- but aside from that, from an investment perspective and this being an REI site, it cracks me up how none of the rest of you people have addressed 4k/mo total market rent justifying an 875k purchase price for an investor.

    Exactly, there are a ton of multifamily properties in my area that have not sold. One example (priced at 800k), both 2 bed/1 bath units currently rented at about 1k per month. No pictures of the inside to judge the condition. Description has an aggressive "This property will NOT be delivered as VACANT, all tenants will continue TO STAY even after close of escrow. Property sold AS-IS with NO repairs (including termite) or credits." 

    I think many owners of multi family make the mistake that potential buyers are viewing their property through the eyes of an overly emotional buyer of a SFR that they intend to occupy. They don't quite understand the value of a SFR is based on the potential owner/occupant and can be very subjective. For the former, this is usually not the case. If you are renting at well below market rate and will not deliver the property vacant, that very much impacts the value of your property to a buyer.

    0Reply
  • Rachel S.
    Investor · Los Angeles, CA · Member since 2019 · 127 posts · 63 votes
    5y
    0Reply
  • Eggy Myagmar
    Member since 2018 · 1 post · 0 votes
    5y

    Your property looks nice! However the lot sq ft is under 3000 and the it’s not cash flowing. I agree with other comments as it’s not an investment property and is more for first time home buyer to live in and get the second unit for income. But if the buyer wants to live in the unit they would want a yard especially during Covid. 

    0Reply
  • Daniel Kane
    Member since 2019 · 1 post · 0 votes
    5y

    Lets face it, La Brea Avenue is a horrible street.  Loud with traffic 24/7. 
    Further the foot traffic along La Brea is often times sketchy.  homeless, etc. 
    And the intersection of La Brea and Jefferson has been notorious for crime at the corner gas station. 
    Furthermore, who would rent there?  not a well to do professional for that kind of rental rate.  You will not attract class A renters. 

    0Reply
  • Kareena Sharma
    Riverside, CA · Member since 2015 · 13 posts · 4 votes
    5y

    In continuation to this thread, I am trying to analyze a duplex deal in LA, asking price is $860k, rent looks about $5500, this was bought back in 2015-16 for $460k, doesn't look like a right time to buy with prices soaring all over in Southern CA, however, the duplex does end up with positive cash flow of at least $1,000 

    Would you buy in this market or wait for the dip to come?

    0Reply
  • Kareena Sharma
    Riverside, CA · Member since 2015 · 13 posts · 4 votes
    5y

    In continuation to this thread, I am trying to analyze a duplex deal in LA, asking price is $860k, rent looks about $5500, this was bought back in 2015-16 for $460k, doesn't look like a right time to buy with prices soaring all over in Southern CA, however, the duplex does end up with positive cash flow of at least $1,000 

    Would you buy in this market or wait for the dip to come?

    0Reply
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