Newbie here. I have been very interested in Long beach real estate after going to multiple REIA meetings in my area of Torrance. Ideally I'd like to get a multifamily unit, live in one and rent out the other units. The problem is that I can't afford any that me and my fiancee would actually live in.
We've looked into condos in downtown Long Beach and are excited about all of the construction going on
So we've turned our search into condos in downtown Long beach.
I've talked to a couple of lenders and my purchase price budget would be max $700k and I'm able to put 10% down. There's two types of condos in our price range. Older units in the 300-400k range located west of Pacific and newer units in the 500-700k range.
My question: From a purely real estate investment standpoint, is it better to buy something in the lower range that may have a bigger return on investment?
2 bed 2 bath 2 parking spaces with in unit washer dryer located a bock west of pacific $320,000 HOA $220/month https://www.zillow.com/homes/for_sale/2090937594_z...
2 bed 2 bath 2 parking space in unit washer and dryer with a gym in the complex located a block or two away from where they are going to build a brand new trader joe's $595,000 HOA $486
Feel free to ask questions, blast me, make fun of me all criticism is welcomed so I can learn.
Sorry, I should have put the square footage the $320k hoa 220 is 867sq ft
the $595k HOA $486 is 1420sq ft
Hi Mark. I'm new to the BiggerPockets forums and just ran across this post on my way down the rabbit hole...
I've been following the transformation of Downtown Long Beach first hand for the past several years and it's truly amazing how much has changed. It's where I own a condo and also do most of my business, so I can assure you your interest is warranted. I know this post is several months old so just curious, did you end up deciding between 505 Cedar or 300 E 4th? If not, I'd be happy to provide current insights to both as well as any other building in DTLB.
Hey Amy! Thanks for replying! I did not make it to a move on either. The 505 cedar sold really quickly, and I wish I had moved on it faster in hind sight.
I've been looking at multifamily. I actually have a property under contract but after walking through it and re running numbers it's not cash flowing at all. If I were able to get market rents day 1 it'd be negative cash flowing about 583 per month. So I'd be down 7k the first year. It wouldn't have positive cash flow until year 4.
Since I'm a newbie I'm stuck between taking action and getting my feet wet and gaining experience vs being patient and finding a really good deal (which I know is difficult in today's market)
505 Cedar has had some great comps sell in the building this year, but be grateful you didn't purchase in 300 E 4th! The HOA is currently in litigation and it's really affected the resale value of those units. As for the multi-unit that you're currently in contract on, how many units is it and would you and your fiance be living in one of them? If so, I'd look at the -$583 per month as really cheap rent for you two while having others pay down the bulk of your mortgage. Also, when you ran the numbers did you consider all the tax deductions if it's going to be your primary residence?
We intend to live in one of the units, but they need to be rehabbed first anyway. The -$583 would be if we're not living there. The proforma includes some basic tax benefits but it doesn't seem like anything major. I'd have to talk to my accountant. But I guess the tax benefits might be the same if I could find a building with better cash flow
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