Hello BP friends, does anyone invest in Southern California? I’m traveling for work from Alaska and currently staying in Granada Hills area near LA. I’ve noticed many run down properties on my way to and from work in nicer neighborhoods that would possibly be good brrrr candidates. My question is, how complicated is the permitting process here? Does the GC usually take care of that stuff or is it the owners responsibility? Any insight is greatly appreciated!
The permitting process is different city by city. The GC generally takes care of it. From a BRRRR perspective, properties around here will generally be a long term appreciation play as with current market prices you'll have a hard time cash flowing them.
So Cal is my area of investment and Grandad Hills is one of several areas I have and would still invest in as I know it very, very well. I'm typically in the Sherman Oaks, Studio City neighborhoods though and my strategy here is SFR redevelopments. I don't do BRRRR here simply because you simply can't cash flow at these high price to rent ratios in the San Fernando Valley. Even with an excellent purchase price and value add into it, you would be hard pressed to break even let alone cash flow simply because of the price points for even the run down homes. Granada Hills will kick off your standard 3+2 1500sf home at a low purchase of $450k in the lower end neighborhoods and would only get you about $3000 in rent of fixed up decent. That spells negative cash flow so the play in doing that is appreciation which, at this point in the market cycle would not be a prudent choice.
Thank you for the insight!