Los Angeles County multiplexes

7 Replies

I am thinking about looking at multiplexes for a house-hacking/investment property.  I was wondering if anybody investing in or around the 90035 zip code had thoughts on the applicability of the 50% or 2% rule.  If these are not good rules of thumb for this area, could you explain why and suggest some other criteria or rules of thumb?  

Hi @Micha Adler  

90035 is in my back yard. I'm very close to Pico / Robertson and know the area well. Duplexes typically start at $1.2MM and go up from there with rents going as high as $5000 or as low as $1000, depending on all sorts of variables.

In general, you will be hard-pressed to meet the 50% or 2% rule in Los Angeles. 2% of $1.2MM is $24,000 so you can see how challenging it will be in L.A. to meet these criteria.

If you're looking for a duplex in the Beverlywood, Cheviot Hills, Pico/Robertson, Century City, Beverly Hills, or anywhere in LA for that matter, let's connect and I'd be happy to point you to some additional resources.

In that area, you will find it almost impossible to find a deal that makes sense.

What do I mean by "makes sense"? I mean that your total out of pocket expense to live in whichever unit you select will end up being considerably more than what you would pay to rent that unit on the open market.

If you are willing to do a deal like this, then you might as well just speculate on a single family home.

If you actually want to do a good multifamily deal, then you need to try to keep the GRM to 11x or under.

Shameless plug: Check out Kagansblog.com for much more information on buying LA apartment buildings.

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@Micha Adler    I am going to agree with @Moses Kagan on this one. I live on the Westside, and I think I've scouted every neighborhood west of the 101... and probably some east as well. You are going to have to find a GREAT deal to break even. I don't see that happening because people in LA know that they live in a hot market, and know that people will over pay for a home. It may not be impossible, but it is not likely with a 2-4 family. You may have to go commercial, and that would change the loan type.

Also be careful with rent controlled units. Google search RSO LAHD tenant etc

Also be careful with rent controlled units. Google search RSO LAHD tenant etc. Also in la you should shoot for 1% rule. It's impossible to find 2% in la city

Also be careful with rent controlled units. Google search RSO LAHD tenant etc. Also in la you should shoot for 1% rule. It's impossible to find 2% in la city

Sorry on phkne