All Forum Posts by: Jeffrey Isenberg

@Sid Naik  I am in agreement with @Account Closed especially with respect to point 1 on increased rents.  Can't really speak for the NorCal market, but we have experienced 50% rent increases in our market over the last 5 years.    

Many investors are quick to discount a 4% Cap rate and modest 3% Cash Flow in this market without realizing the tremendous opportunities obtained in the near to mid-term from annual rent increases.   Not saying they will continue at this pace in perpetuity.   However, the underlying factors driving increased demand are not likely to change anytime soon, IMHO.    

@Sid Naik Cap Rates should also be viewed as an expression of risk based on the types of properties you can buy.  Within any given market, the lesser the area, the higher the Cap Rate.   

I am a big proponent of buy and hold in appreciating markets such as LA.  The appropriate use of leveraged appreciation will allow you to build a larger portfolio over the long run that you can cash flow off of instead of chasing yield.  Also the strong upside in rents in these markets will give you increased cash flow that is completely ignored by focusing only on cap rates. 

So the take away here is that appreciation and cap rates move inversely.  The challenge, however, for many investors is the cost of entry.

Please note that our Multifamily REI Group can also be found on Meetup.com at the below link:

https://www.meetup.com/Sherman-Oaks-Multi-Family-R...

The link to this month's Lender Panel on Meetup can be accessed here:

https://www.meetup.com/Sherman-Oaks-Multi-Family-R...

Please join us for this great panel as well as networking with other investors and industry colleagues in a casual and relaxed environment.   We hope to see you there!

Jeffrey

Just an update to introduce our upcoming Lender Panel!!!

Commercial Lenders @Alex Bekeza & Matt Landesman from Land Brothers Mortgage 

Private Money Lender Matthew Rabinowitz from Civic Financial Services

More Panelists are TBA!

Please Join us for an informative presentation with Guest Panelists from the Real Estate Financing Industry as they reveal the quickest path to funding your Multifamily Investment Projects.  Panelists will be announced by September 26th so be sure to check here for updates. Whether you are just starting out as an Investor or are already underway in building your portfolio, this Meet-Up will reveal what you need to know about today's lending market and is not to be missed!

Schedule as follows:

5:30pm-6:00pm Networking
6:00pm-7:15pm Presentation
7:15pm-8:00pm Q&A & Networking

@Lee Bell  We will delve into the Residential Income Purchase Agreement that also deals with 2-4 unit properties.

@Sheila Abadi and @Shabi Jafri  We look forward to having you join us on Wednesday!

@Nathan G The multifamily subgroup of LA South REIA meets on the 4th Monday of each Month starting at 6:30pm at CoWork South Bay in Torrance.

@Jeff Asher Thank you for the referral.   Please join us along with @Darlington Agu for our next installment on September 12th.   Our focus is strictly on multifamily and the presentations are informative and educational in a relaxed setting that lends itself well for networking.

Here is the link to our next event.

https://www.biggerpockets.com/forums/521/topics/60...

Thanks and hope to see you there.

Prop 10 calls for the repeal of the 1995 Costa Hawkins Act which was enacted to limit rent control measures statewide.   Voters will choose whether or not to repeal this legislation as it is included on the November ballot.  

In the event of a repeal, it will merely pave the way for individual cities to enact their own rent control ordinances.   The state of CA can look good by claiming neutrality and leaving it up to the local city governments to decide.

Many local governments (LA & Garcetti aside) know that rent control will not alleviate the housing crisis nor do they wish to alienate their investor constituents that are against rent control measures in any form.

Many studies have shown that rent control does not work and only degrades neighborhoods as landlords defer maintenance and improvements.   It also drives up market rents to even higher levels when units turnover (i.e. New York City).  Artificially tampering with a market driven economy simply does not work.    

Although the issue is not to be ignored, most investors in areas of high appreciation around LA are continuing to acquire property and benefit from above average returns in the market.