Cash Flowing Multifamily Los Angeles

[Wiley Strahan]

Hi All, I have been looking at some properties in Los Angeles (Long Beach) and I keep coming up with calculations that yield me barely any cash flow. [they are 3-4 units] My question is, is this to be expected in LA? My realtor seems to think that most investors don’t cash flow until a few years in , but I have also talked with others and they are definitely finding properties that cash flow especially when the markets below rent. Am I on a wild goose chase for cash flow or is my agent right about having to take loses or break even for a few years? I am guessing many of you will say it depends, but I am just trying to level set. Thanks!

[Seth Borman]

Principal pay down is your friend. Basically at these rents and valuations you build equity every month. Eventually you can either sell the building or refinance to get it out.

That said, you absolutely can cash flow a property here, you just need to be very careful and spend a lot of time looking.