All Forum Posts by: Jeffrey Isenberg

@Ara Abrahamian In answer to your question as to which strategy is better, it depends on your long-term investment goals.  As you know in the 2-4 unit space financing is typically conventional.  However there are market rents programs out there with 70%-75% loan to value that will not consider your personal income.  With that said, valuations will predominantly be based on comparable sales at price per square ft.

In the 5+ unit commercial space, property valuations are determined solely based on income (calculated on GRM). Under this scenario, if you can force the appreciation through value-add, this will typically exceed the upside associated with acquiring several additional 4 unit properties.
     

Join our Buckingham Investor panelists for an informative evening as we take an in depth look at Multifamily property analysis from a Buyer's Perspective. Learn to identify fact from fiction by carefully scrutinizing the data found in Offering Memorandums.

We begin with an overview on how to evaluate properties based on market data including GRM and Cap Rate. We then compare a deal from both seller and buyer perspective and explain why the numbers may differ significantly. Use the knowledge to failure proof your investments and boost your returns on your next multifamily investment.

Whether you are just starting out or an experienced investor looking to expand your portfolio, you will not want to miss this event!

Schedule as follows:

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

This is a No Sales Group and we provide a relaxed environment for investors to learn and network. Refreshments will be served.

We look forward to seeing you!

I have used Gorsuch Plumbing out of Signal Hill for Sewer Pipe inspections for several real estate transactions and have been extreemly satisfied with their service.  



 

You may also join our Multifamily Investor group on Meetup via the below link to receive updates on future events.

https://www.meetup.com/Multifamily-Investor-Network-Los-Angeles

Although the inital event post denotes a free event, please note that there is a $10 charge per person to help cover the cost of the event space so apologies for the error.

Join me along with guest presenter Robert Chuang of JPR Construction for an informative evening "All About ADUs." We will break down the latest ordinances to help investors successfully navigate the new landscape. We will also outline how to approach your ADU projects from the development perspective. Profit by adding ADUs to your strategy and boost your returns on your next multifamily investment.

Whether you are just starting out or an experienced investor looking to expand your portfolio, you will not want to miss this event!

Schedule as follows:

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

This is a No Sales Group and we provide a relaxed environment for investors to learn and network. Refreshments will be served.

We will look forward to seeing you!

@Jesselyn Fearing

Agree with @Saul Levy , but also recommend Long Beach due to all of the recent development and investor capital.  Also not considered LA City from a rent control perspective so better upside under the recent state wide legislation.

@Myles Taccini

 @Robert Chuang is correct in that FIBI Long Beach has just relaunched.  The most recent meeting just took place last Thursday evening on Investing Fundamentals.  February's topic will be on ADUs.  Below is a link to the group.

https://www.meetup.com/forinvestorsbyinvestors/

We use 5% for vacancy and 5% for maintenance on multifamily property in SoCal.  Vacancy rates are currently at 2%-3%, but we will look at it the same way underwriting would.  Cap Ex is a little trickier as it depends on several factors including the hold period and condition of the property.   Specifically if a given property has updated systems and is held for a shorter period, the Cap Ex budgeted would be lower than a long-term hold with dated plumbing, electrical and requiring a new roof.

Better to over estimate and have plenty of reserves just in case instead of the alternative.

These deals are typical in the Sherman Oaks area north of Ventura Blvd.  Single story ranch homes under 2,000 sq ft. sell in the 900K range and are typically developed into 2,800-3,700 sq ft. luxury homes in the $1.8M and up range. 

@Paul Wolfson Of course $1,000/month cash flow is significant, but keep in mind that interest rates on investor loans are at or near historic lows and this is reflected in market pricing. 

I agree with @Nathaniel Hovsepian in that if you are cash flowing, a short-term drop in value has no effect if you are not forced to sell. Even under this scenario you are still getting a return on cash flow, equity build up through amortization and tax benefits.

Say prices go up 15% before they drop 10% and then rebound.  You will have already missed your market low, so timing the market is not recommended.  It is important to weigh the opportunity cost of sitting out while your capital could be working for you.  

Not to sound cliche, but in appreciating markets such as LA its all about "time in the market" and not "timing the market".