Los Angeles: Where do I buy?

[Julian L.]

For those of you who are familiar with the LA area, I'm trying to buy my first place at 31 years young. I work in Santa Monica, currently live in Venice and rent for $1495/month.

I'm not even close to buying anything in that area - I'm totally priced out. Everyone says to buy the worse property in the best neighborhood, but I can't even find dumps or rehabs in Santa Monica / Venice for under $750k.

My budget to purchase is $500k - $650k and I'm looking for a 2 bed / 2 bath, so I can rent out one of the rooms to help me with my mortgage payment. I have $150k saved to use as a downpayment, closing costs and / or fix a place up. 

Ideally, I'd like to purchase a house for $500k, use $100k down, have a monthly mortgage of around $2200 and put another $20k - $30k in repairs, fix up, live and get a roommate and then sell in a few years. However, it's looking like I'll have to be in less desirable neighborhoods to accomplish that. Otherwise, I could go condo route, but then I'm stuck paying a $300 - $500 HOA fee.

I'd like to keep my commute time to 30 minutes during rush hour and would like to buy in a "up and coming area." What do you think are the neighborhoods that will be the "next big thing" somewhat near the Westside? I've been looking at Playa Vista, Ingelwood and Mid-City. I'm almost priced out of Mar Vista and I'm really not interested in Palms. 

I'm even open to Sherman Oaks, Topanga Canyon or some other further areas, but really not looking to sit on the 405 for an hour each way to work. 

Does anyone have any ideas on where to look and buy? 

[Matt Mason]

@Julian L.

I hear you about a condo. Only makes sense if you are going to stay at least 7-8 years but preferably longer. Keep in mind a $300-$400 HOA fee really isn't too crazy as that should cover your water, sewer, some insurance, gardening, and outside electricity among other things. You are going to have pay those things yourself on a house. The real bite is looking out for assessments on top of that for major deferred maintenance and capital items that may exist. A lot of condo HOAs are dysfunctional messes.

I am a bit lucky in that I have lived in the same 4 unit townhome complex for 16 years and we have a simple structure and I control 25% of the vote. The downside is that I have to run a lot of the HOA duties or they probably won't get done. The advice I have taken to heart on condos is either go small (4 or 5 units where you can control things) or go really big like over 100 units where they can afford professional management and a few bad apples don't muck things up and there is a big base to spread capital costs over.

On 90016, I own an income property north of the 10 Freeway (Mid-City).  There are still quite a few properties that need rehab.  Like most of LA, the real money is in value add, which I agree can be a little intimidating for a newbie, especially with the big numbers and RSO in LA.  For the neighborhood, the good is that Mid-City to the North along Pico continues to improve.  Culver City is just a mile or so to the West and this part of CC is about to really go to the next level.  Just to the South, the Expo Line Phase II is opening next year and will provide a 20 minute stress free ride to Santa Monica, which is a game changer IMHO because there is no other affordable areas near SM that can come close to that commute.  The bad is that there is really not much of a walking commercial street here so it is kind of a spillover neighborhood.  Also, this area used to be a swamp (La Cienaga means swamp in Spanish) and does not do well in major earthquakes - liquefication...