Just had lunch with a potential buyer (hi Bill!) who’s thinking of dumping around $1MM into LA apartment properties. He is comparing the opportunities available here with those available in Vegas, Florida, Phoenix and other depressed markets. He’s looking for a very high, 10+% cash-on-cash yield with room for lots of appreciation. Obviously, getting to … Continue reading “The South LA Strategy”
Category: Buying
Hot rental market = hot market for apartment buildings
The LA Times had an interesting article a few days ago about the state of the LA rental market. Here’s the money quote: “Few new units and tight standards for home loans add to the pressure. The average monthly US rent is at an all-time high, and a 10% jump in Los Angeles County over … Continue reading “Hot rental market = hot market for apartment buildings”
Grandfathered zoning in LA
What does “grandfathered zoning” mean with respect to apartment buildings? To understand that, you first need to understand that zoning in Los Angeles has generally become stricter over time. For a long time, there wasn’t any zoning. You could just buy a few single family homes, rip them down, and put up an apartment building. … Continue reading “Grandfathered zoning in LA”
How to value a building that needs work
Rarely do you come across an apartment building in Los Angeles that’s in truly mint condition. Everything’s got a few dings on it; that’s just part of buying older buildings. For those normal, everyday buildings, you figure out a range for the multiples of annual rent in the neighborhood, multiply the annual rents times the … Continue reading “How to value a building that needs work”
More on dumb brokers
Further to my earlier post on dumb brokers: I am working with a couple now who came to me through this blog (hi guys!). They were previously working with another broker who had them in contract on a small building in the Miracle Mile area. The broker they were working with neglected to inform them … Continue reading “More on dumb brokers”
Buying REOs (bank-owned properties)
Recently, I’ve written offers on REOs (“real estate owned” – this is short for “owned by a bank because they foreclosed on the last owner”) for three readers of this blog. A lot of people are interested in these kinds of properties, either as potential flips or to fix up and hold as income properties. … Continue reading “Buying REOs (bank-owned properties)”
Miracle Mile Apartment Rules of Thumb
Have been spending a lot of time looking at 2-4 unit apartment buildings in the Miracle Mile area recently and let me tell you: That is one ridiculously hot market. First, let’s define what we mean by “Miracle Mile”: It’s the area loosely bordered by Wilshire to the North, Pico to the South, La Brea … Continue reading “Miracle Mile Apartment Rules of Thumb”
Brokerage Etiquette
I’ve got an offer out on a 4 plex for a couple I’m working with. It’s a pretty amazing REO (bank-owned) property in Miracle Mile. Knowing that the list price was a bit low for the area, we offered $115,000 ABOVE list for the property. We also jumped through a series of increasingly annoying hoops … Continue reading “Brokerage Etiquette”
Never Buy a Building with a Non-Conforming Unit
I was once in escrow to buy what I thought was a 16 unit building on Clinton St. in Echo Park, one unit in which was “non-conforming”. The owner had taken a common room and turned it into a studio apartment. The listing broker assured me that this was pretty normal in LA and, indeed, … Continue reading “Never Buy a Building with a Non-Conforming Unit”
14 unit re-positioning deal
The 14 unit deal I mentioned late last week is going out to the mailing list around 5pm today. If you want to understand how the numbers work on a larger apartment project, this is a good one to take a look at. To join the mailing list, click here and follow instructions. Should take … Continue reading “14 unit re-positioning deal”