Los Angeles too expensive to invest for newbie ?

[Alex K.]

I live in Los Angeles and I am trying to find my first deal to buy and hold . Should I look for deals in Los Angeles or out of state ?

[KJ L.]

Here's another thing to consider - its really hard to buy a deal in Los Angeles but you can MAKE a great deal in Los Angeles if you learn the laws and think creatively (consult a lawyer as well).

We bought our duplex (two - 2bed/1ba units) in south LA (walking distance from the coliseum and LAFC stadium) in 2017 for $400k; we got a deal because it had one rent control tenant.

We used FHA financing 3.5% down, moved into the vacant unit, transferred our mid-city rent ($2000) to a mortgage and collect minimal rents ($515) which helps pay our mortgage. Our P&I + PMI + Taxes + Insurance = $2570.

We're paying about $27k for eviction of our tenants including legal + relocation fees. 

Total renovation fees will be about $25k (it's all cosmetic and we're doing much of it ourselves).

Vacant and renovated duplexes sell for about $600k-$750k in our area.

Rents in our area for 2bed/1ba are currently $1600-$2400 depending on the proximity to school and renovations.  According to rentometer, average rents are $2052 and median is $1995. 

When searching for properties in LA, look at all the potential opportunity and try to calculate how to make something a deal.