Running Numbers for LA Duplex

[Henry W.]

Hi Everyone - longtime lurker, first time poster! I'd love to get some collective wisdom and learning from all of you. I'm looking at purchasing a duplex in Los Angeles, CA and house hacking it by living in one of the units and renting out the other. With the area, it's more of a buy and hold rather than a cash flow investment.

Details:

Duplex, owner-occupied, no shared walls, (1st unit: 2/1, 2nd unit: 1/1, Total: 1545 sq ft, Lot Size: 7240 sq ft, Garage with attachment - 15'7x5'9)

List price: $900K; Redfin Estimate: $920K; Purchase Price: ~$850K (15% down, 30 year, 3.6-4% interest rate quotes)

Built: 1900-1940 (does not look that old, but agent checking actual date; paperwork might have been lost), roofs - 1990s, upgraded electrical in both units, possible copper plumbing

Zone: R3, can build maybe another unit? 

Rents/Leases in area: 1/1 - $1500-1800+, 2/2 - $2000-2500+

Property Tax: $2200, Insurance: $2000

Property Management: For now, would be me, but eventually would like to factor in Property Management fees

Repairs: $20-30K (estimate)

Area: good schools (8/10), walkable to grocery stores/restaurants, lots of development in area (MFU, new community of townhomes being built nearby)

Cash flow calculator: Break even or slightly under (would make more sense if able to add 3rd unit)

Buy and hold idea: renovate, maybe add another unit down the line, sell with big assumption property value continues to significantly rise in area

Thank you for your input!

[Lee Ripma]

@Henry W. R3 doesn't mean 3 units. This is actually a great zoning for developing MF. I buy lots like this and put 4 units on them. Lookup and understand your zoning. You can often build more "by right" than you can actually physically fit with required parking. ADUs may also have less parking requirements so might be a great way to start without needing to go through the City's permitting process. I'd buy that lot just for the zoning (depending on where it is).