Cashflow x Appreciation Areas in LA

[Armand Farr]

Hey guys, I'm looking to buy a multifamily prop in LA next year and could use some help nailing down target areas.

I'm looking for an area with the following:

- <$300k/door purchase price (or close, will look for an off-market deal)
- Over 10% CoC return
- Upside for appreciation (not crazy about areas like Lancaster for this reason)
- Ideally rent control-free (or workarounds)

Here's my initial list of areas:

- Culver city (expensive)
- Inglewood (Rams stadium/Silicon Beach trickle down)
- Mid-city/Fairfax
- Pasadena

Not crazy about North of LA (ie: Studio City, Granada Hills, Sherman Oaks)

Any insight into the cashflow potential of each of these areas and target price ranges/door would be super helpful. Happy holidays!

[Irina Costea]

In my personal opinion, Inglewood is going to be showing the most growth over the next few years. With the Rams stadium going up, there will be a lot of jobs formed and more people wanting to move to that area. Also, as you said, there should be some trickle down from silicone beach.

Culver City is quite expensive and so is Fairfax/Midcity. Unless you are going for large multi, 300k/door might be challenging.

Unfortunately I am not sure about Pasadena as I am not very familiar with that area, but as far as I know, Pasadena is a bit expensive as well. I would look at areas more like Highland Park nearby which is getting a lot of Echo Park and Silver Lake trickle because of how expensive those areas have gotten.

What is your overall budget? How many doors do you want to buy at max 300k/door? I think that is going to make a big impact on whether you can hit the.m revenue you are looking for. I think the best course of action would be to find a junky Inglewood building close to the Culver City border and put some money into updating finishes and the exterior/landscape to attract young professionals that will be moving in the area in the next few years.

Hope I helped!