All Forum Posts by: Joseph M.

Update : 

Discovery / HGTV bought the house and will be restoring it to 1970s style 

“HGTV will restore the 2,500-square-foot, two-story home, which backs up to the L.A. River, to the height of its 1970s appeal and will be used in future televised shows, Zaslav said.”

https://therealdeal.com/la/2018/08/07/hgtv-has-big-plans-for-the-brady-bunch-house/

@Sanjeev Advani  

Yeah in that case it doesn't seem to make much sense unless they are just betting on appreciation/speculating  or hoping for a lot of rent growth.... which hasn't been a terrible strategy in a market like L.A  

In L.A I see a lot of properties being marketed as "great income property" that would actually result in the buyer losing a lot of money each month.  So these aren't even 4-5 caps. 

I can't see buying them unless it's some kind of future development play and they figure at least they are getting some income, even if it doesn't cash flow. 

Interesting about Downtown Bakersfield, that is good there's been some gentrification. I have relatives in Bakersfield but not sure how often they are in Downtown. I saw that downtown Bakersfield was selected as an "opportunity zone" recently as part of the latest Fed government tax plan.  https://www.bakersfield.com/news/opportunity-zones-provide-chance-to-increase-private-investment-in-our/article_7d6edc20-8539-11e8-b51f-5b83cd1713cd.html

 Nice, that's a great cap rate especially in this market. Best of luck! Look forward to hearing more of your experiences as things progress. 

@Jeffrey Almonte

Yeah there is a lot of uncertainty right now in the current environment here in CA especially with the upcoming vote on Prop 10... It is a shame because we have a lot of these buildings that are really run down and like you said it's because the landlords don't have incentive to keep the buildings up and invest in them. 

@Julia Fergo , yeah and I've been seeing these tenant groups organizing and even doing "rent strikes" where they go to the landlords home and harass them with bullhorns ...pass out flyers to the neighbors. This is with non rent controlled buildings. I know that happened with one landlord and he negotiated with the tenants, maybe he feared for his life/safety. The ones i've heard of just stopped paying rent altogether for many months. 

I didn't know about the sealing of eviction records, that is really bad. It is a shame people take advantage of the system like this.

Some articles about these rent strikes 

https://www.washingtonpost.com/national/los-angele...

https://losangeles.cbslocal.com/2018/08/02/tenants...

 Yeah that is true. L.A is home to a lot of mom and pop landlords. I've noticed the same thing in the minimum wage debate too...a lot of people talking about multinational companies but it's the small 'mom and pop' businesses that will be affected. They can't afford the automation. 

What i've seen in L.A is the mayor and local politicians are constantly promises "affordable housing...coming soon" ...it's the carrot they use to get people to vote for them...even though they know getting one of those affordable units will be like winning a lottery just as it always has been. False promises. 

Disappointing for sure how things are being run here. Bad policies left and right.

I don't own rentals in L.A , but as a native of L.A and living here I've seen that rent control is a bad policy. We have some of the most unaffordable market rents . Rent control also benefits some that earn high incomes and have just lived in their apartments for a long time which doesn't seem too fair. Many of these buildings in L.A are really rundown and they are eyesores even in nice areas because either the landlords don't have the money to fix them up or they have no incentive too. 

If I did own mutli family rental property in L.A , I'd  be looking into how it could be redeveloped and getting out of the rental business in L.A too much uncertainty and anti business/landlord mentality with the current regime in L.A and CA.

Oakland for example wants to put an additional tax on landlords , who knows if that great idea will be coming to L.A soon.

@Julia Fergo , thanks for the info and links , I joined the effort to stop Prop 10.

@Sanjeev Advani

People are buying at caps lower than that in L.A There are a lot of stories these days in the news about new owners buying apartment buildings and kicking out the tenants but the reality is if someone buys at market and continues to operate the property as is at current rents they would lose money after all expenses and debt service .

I’ve been looking at the Bakersfield market again recently and I do see prices have gone way up for Multis . Prices have definitely gone up a lot more percentage wise versus L.A.  It's not common to see stuff today for 3 -4x more than prices during the crash. 

I don’t see quite the same opportunity in Bakersfield though in terms of value add like one might be able to do in a market like L.A . I haven’t heard much about neighborhoods in Bakersfield gentrifying much. But I could be wrong.

4-5 cap doesn't mean much if someone is going to improve units and drastically increase rents or if they are going to redevelop the property to best and highest use into new luxury apartments, condos/townhomes or small lot homes etc.

@Julia Fergo 

If it passes I see more people that rent their single family homes deciding to sell since they won’t want to be restricted by rent control . This will take more rental housing supply off the market . 

Rent control is a bad policy and they are doubling down on it . Good example of why CA is always considered one of the least business friendly states.