3 questions about investing in LA/SoCal

[Catherine Underwood]

I am looking for Cash flow properties in LA and SoCal.

I’ve been doing research and have 3 questions. I am from England, so my questions might be culturally related.

Question 1: “Ghetto areas” in LA



I’ve found a few promising properties in LA zip codes that, according to Best Places & City Data, have high levels of violent crime.

In the UK, we’d call such areas ghettos and they are not worth investing in, as the tenants lack income, the monthly rental prices are low, and the property management companies provide a poor service.

However, I notice that these ‘ghetto’ LA Zip codes tend to have high monthly rental asking prices. There also seem to be several property management companies that service these areas and the companies have stellar reviews. The average income of people who live in these areas is also reasonable.

So are these ‘ghetto’ areas worth investing in? Also is there a definitive list of bad areas in LA? I found this list (and all the properties I have found are in those zip codes), but the author doesn’t state what his list is based on.


Question 2: Family homes vs apartments 

In UK cities, apartment tend to be rented out by younger people. They usually stay for 1 to 2 years before moving on. They don’t tend to be so fussed about the condition of the property, as they are desperate for housing.
Family homes tend to be rented out by families who usually stay for 5 to 8 years. They are more fussed about the condition.

Is it the same in LA?


Question 3: Areas outside LA 

I have been looking at Riverside, Redding and Sacramento and these areas seem to have potential.

I have seen people recommend Niland, North Edwards, Chico, Palmdale and Bakersfield but from my initial research, these seem like duds.

Anyone have any other recommendations?


Background information

I know, I know, you can’t get cash flow properties in LA/SoCal and it’s better to wait for the LA property bubble to burst.

But as mentioned I live in England. I am going to an extended family function in LA & SoCal. There’s going to be a lot of waiting around, so I thought I’d use the time to look at properties.

[Tyler Hungerford]

@Catherine Underwood Hi there! So as an expert in the Inland Empire Real Estate Market, I can tell you that cash flowing properties are far more abundant in the Riverside area than they are in LA. While our appreciation might not grow as quickly as LA County, there is a reason why Riverside and San Bernardino Counties are the fastest growing areas in the state of California and have helped the state recover from the terrible recession. Our properties have seen on average a 15-30% growth in appreciation since 2010. Houses that were purchased at $100k are now worth $300k+. 

Listen, LA is a great market, but you get the most bang for your buck by coming out to the Inland Empire or ancillary areas. Your money goes a lot further and you can ride the appreciation train in the fastest growing real estate/economic market in California. 

Best of luck finding solid cash flowing properties. You've got a good eye for solid areas to purchase properties, but your choice on areas just depends on your certain investment goals. Feel free to reach out should you want some more information or help!