Sometimes clients ask me why we’re so focused on Northeast LA (Silver Lake, Echo Park, Highland Park, etc.). After all, LA is a big place and there are plenty of other places to buy apartment buildings. So why the focus on the hipster areas?
Hint: It ain’t because we love asymmetrical haircuts, beards and artisanal pickles.
Regular readers know I would do deals on the moon if the numbers made sense.
The reason we focus on those key areas of NELA is because that’s where the money is!
There are still plenty of owners who have run-down buildings which they stopped maintaining years ago.
When those owners get sick of running slum buildings or pass away and leave them to their children, we have the opportunity to buy them, fix them up (a lot!), and charge rents sufficiently high to make the whole thing worthwhile.
I’m constantly on the lookout for more areas where our model works (using this equation), but for right now, NELA is where it’s at.