All Forum Posts by: Joshua McGinnis

@Susan Capeta

What is your house zoned for? If you don't know, you can look it up here: http://zimas.lacity.org/

I'd also suggest reading the LADBS Homeowners Guide to Permits and Inspections:
http://ladbs.org/LADBSWeb/LADBS_Forms/Publications...

There's a permitting fee calculator here:
https://www.buildla.lacity.org/epermit/faces/wcnav...

The fee schedule can be found here:
http://ladbs.org/LADBSWeb/fee-schedule.jsf

I'm not one for generalizations, but it typically takes months for the plans/permits to be approved. Because the margins for flips are so small in LA, the added wait time can make a project un-feasible.

I hope this helps!

http://www.padmapper.com/ is a great resource that aggregates Craigslist and several of other sites.

If you think your new property is will rent for > $3K /month, you can find some comps in the MLS.

@Benjie DeVera

We had a client from BP buy an incomplete reno in Pasadena and the process of finishing it out in regards to permitting was straightforward; not at all like LA County. I'd argue the rehab financing was more cumbersome.

It's much easier to get approved plans if you approach the project as an owner/builder. What I'd do is walk into Building and Planning with the parcel or listing sheet and meet with a planner. Ask them what you are allowed to do and what the process for getting approvals looks like, timing, etc. It might take a total of 1-2 hours out of your day for first-hand knowledge.

I've not personally been to B&P in Pasadena, but in LA County, it's a lot like the DMV. You walk in, take a number, and then wait for your number to be called.

The larger the ratio of lot size to total structure sq. ft, the better chance you'll have at not running into any size restrictions.

Adding sq. ft is a great flip / investment strategy in the LA area. There's a premium for sq. ft in the market vs. just flipping an existing structure.

This just isn't true based on the numbers.

Homeless Numbers are Indication of an Issue
We have 40,000 homeless people living on the streets in LA, for a variety of reasons, not the least of which is housing affordability. Last month, the city declared a "State of Emergency" where it plans to allocate part of a $100M fund towards housing and housing-related subsidies.

Overcrowding
Los Angeles County has seven of the ten zip codes with the worst housing overcrowding in the nation and 64 zip codes that are in the worst half percent for housing overcrowding.
Source: http://graphics.latimes.com/crowding-map/

Rent Control
We have an exorbitant amount of rent-controlled housing. L.A.’s rent control laws, passed in 1978, also limit supply by reducing turnover, thus taking a large portion of units off the market. For example, 80% of the city’s 880,581 multifamily units are rent-controlled. This forces newcomers to compete for the far smaller stock of available market-rate units.
Source: http://www.forbes.com/sites/scottbeyer/2015/04/10/...

We Have the Least Affordable Housing According to 2015 UCLA Report
Source: http://www.scpr.org/news/2015/08/06/53625/LA-least...

The Mayor's Primary Initative
Mayor Garcetti has made it a goal to build 100K new units of housing by 2021, a number many experts say is what we should be building per year.
Source: http://www.scpr.org/news/2015/08/28/54043/la-mayor...

AirBNB is growing in LA, taking valuable rental units off the market
Source: http://www.laane.org/wp-content/uploads/2015/03/Ai...

California's Home Prices have Consistently Risen / Outpaced US Home Prices
Source: http://cdn.cstatic.net/images/gridfs/55099ab2f92ea...

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The biggest issue is that we just aren't building fast enough.

LA's Population is growing by 8-11% each year and we are only adding about 3% of growth to inventory.

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Will we face a macroeconomic shift which might change pace for a period of time? Absolutely. But over the long haul, until we ramp up production, we're going to be dealing with short supply and the high prices that follow.

Hi @Joshua Schneiderman - great name.

I think you will find LA still has many opportunities for cash flow and long-term growth if you know where and what to look for.

Welcome aboard.

@Justin Landesman

Welcome to BP. 

I love you goals. You know why I like big goals? Even if you only get to 75% of your goal, you're usually well ahead in two areas: a. what everyone else is achieving and b. what YOU thought was possible for yourself.

I'd try networking with a securities and/or real estate attorney so that you can start to understand the structure of a REIT and specifically, the best way to structure your REIT to make it attractive to investors.

I'd also focus on networking with potential investors or those with access to institutional capital / family offices. Get a sense of what types of deals they're looking to invest in, what the market will bear in terms of risk tolerance, the returns investors are looking for, time horizon, and REIT structure that will make it most appealing.

You're in a great place (BP) to start making some of those connections. I wish you tons of success.

Hi @Suzy Crawford Welcome to BP!

Hi @Tony Ku

I get a few REO's in my inbox every week and most of the time, they're in areas I personally wouldn't invest in (not near centers of economic development/growth, etc).

"REO Brokers" are not very common in LA - probably because REO's are not that common. That said, any agent who has experience working with short sales foreclosures - transactions which involve working directly with the bank - can probably help you if there is a specific property you want to make an offer on.

I'll shoot you a PM. We're happy to help you if we can.

I did a little digging into these properties and spot checked several of the listed properties for sale. 

They are all owned by the same individual (and sometimes his spouse). While OP states the owner has kept 2000 units for himself, I was only able to find about 106 properties under the same ownership as the units listed above. Perhaps 2000 is inclusive of properties he doesn't own, but manages for others?

The owners are associated with http://oceandevelopment.com/ which states that they manage over 700+ properties.

Potential buyers should be know that the many of the units are Section 8:

I also see that the product type is very similar across the units just by doing street view on the list. They're a run-of-the-mill duplex with 1 up / 1 down and separate entrances. Nothing wrong with this in my opinion.

I don't see any red flags in regards to the asking price. Many of the properties were acquired 10+ years ago and it seems the owner is looking to liquidate some of his portfolio in an up market. Nothing wrong with that.

The biggest issue I have is the location of these properties.

In August this year, Los Angeles had 39 homicides out of the 484 homicides we've had this year. Here's a map of the homicides in LA for 2015.

Now, compare that to the map above of the properties available for sale...

All that said, there's absolutely nothing wrong with buying or developing properties in these areas. In fact, I'd argue that the quality of product is relatively decent (from what I can tell), but it is important for buyers to know where and what they are buying into.

It goes without saying, be sure you research any area you plan to invest it in.

Hi @Christina Lanoux

Welcome to BP! It can absolutely happen and we'd be more than happy to help you with the search. We've helped other local BP members and first-time investors find a suitable investment in the LA market. Just sent you a PM!