Landlord Assistance Programs - City of Los Angeles

Daniel Leathers · 2019-10-18T05:58:20-07:00

Hello Bigger Pockets Community, My wife and I am in the process of evicting some non-compliant tenants. We purchased this duplex in September 2018 and inherited these tenants. The building was built in 1923 and will need some work to make it rent-ready for the next tenants. We had a trusted contractor walk through the unit and he recommended that we budget $30k for the improvements. This includes plumbing, windows, flooring, cabinetry, HVAC, and a few other items. This property is worth $580,000 and our mortgage balance is $531,000. We would have tried the BRRRR method, but the lenders we've talked to say we do not have enough equity to make it work as it is non-owner occupied. This property is located in a low-to-moderate income area in the City of Los Angeles. My question: does anyone know of programs with The Department of Housing and Urban Development, the City of Los Angeles, or any other programs that assist landlords in bringing older properties to modern standards? Thank you for your time and consideration.

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

6y

I don't have an answer to your question but I do have a question: why should the tax payers subsidize your investment? You bought it. You own it. So own it! Even if there are programs available, the responsible thing to do is renovate the property yourself with your own money and not request tax payers to foot the bill.

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Nicole Heasley Beitenman

Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes

6y

@Daniel Leathers Do you have the cash reserves to cover the repairs? Or are you just trying to avoid using cash?

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KJ L.

Rental Property Investor · Los Angeles, CA · Member since 2017 · 210 posts · 155 votes

6y

I would suggest using cash to cover your expenses. Don't rely on the one quote from the GC as many are over-charging for repairs. HVAC is not a necessity in LA - many rentals do not have AC. Cabinetry can be purchased from IKEA and installed by a handyman (or just get the cabinets painted), get discount flooring and have it installed by handyman, and wait on new windows. Where is your property located? If you're in South LA, you should be able to find some solid handymen who will do work for less than a contractor.

Also, how'd you conclude that your property is worth $580K? If the bank used their evaluation software to make that determination, you can ask them to order you an appraisal to verify the property's value but you will most likely be required to cover the expense of the appraisal.

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Daniel LeathersPro Member

OP

Investor · Los Angeles, CA · Member since 2018 · 8 posts · 3 votes

6y

Thank you all for your responses.

@Nathan Gesner: allow me to provide a bit of context. Last week I attended a realtors' meet-up and the guest speakers were two representatives from HUD. They explained the existence of these programs on both the federal and local levels to both help alleviate the abundance of dilapidated buildings in older urban areas like Los Angeles and encourage more ownership/investment in older properties. So it's not a matter of me thinking "the tax payers [should] subsidize [my] investment". It's the fact that, irrespective of anyone's opinion, the federal government and certain local governments have put these programs in place. This was news to me and I jumped on the BP forum to see if anyone had prior experience with these programs.

@Nicole Heasley Beitenman Yes, we are trying to avoid using cash. We engaged the services of an inept building inspector (family friend) prior to buying the place and he missed a substantial amount of defects in the property that would have allowed us to negotiate down the price of the property. When we started renovating one side of the duplex, we uncovered multiple issues that drained most of our reserves. Big lessoned learned here was not pick a building inspector because he’s a family friend but pick one who has good references from other real estate investors.

@ I like your suggestion of getting multiple quotes from other GC’s. The property is located in South LA and there’s work being done on many of the surrounding houses. That should make it easy to find a good handyman. I don’t have a problem walking up to random workers and asking for quotes.

I arrived at the value of $580k from using the average from Zillow & Realtor.com. I have friends that work at a bank and will ask them to pull comps to see if my number is off.

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KJ L.

Rental Property Investor · Los Angeles, CA · Member since 2017 · 210 posts · 155 votes

6y

Don’t rely on Zillow for your valuation. You can ask title or an agent to provide comps as well. Which neighborhood in south LA is your property located in? West Adams is valued differently than View Park and Watts. There’s been a good amount of appreciation in South LA over the last couple years, you could see if you have enough equity to get a small heloc for repairs.

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Mattaniah Yip

Investor · Los Angeles & Detroit · Member since 2014 · 52 posts · 17 votes

6y

@Daniel Leathers definitely don’t rely on Zillow and etc. I have a duplex in Mid City/West Adams area. Zillow values it at 835k. We just got appraised for 1.1 million. If you need a good handyman, just DM me. We have one we who is very dependable.

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Landlord Assistance Programs - City of Los Angeles

Landlord Assistance Programs - City of Los Angeles

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