finding value-add small multis near greater LA area

[Rob Adams]

I'd like to look for value add small multifamily (anywhere from 2-12 units) near LA (within 0-2 hour drive). goal would be to buy, rehab, push rents, stabilize and refi after Y1. assuming i have access to cash and contractors what would be candidate neighborhoods for this sort of thing. everything is overpriced out here but I've read this can happen in san bernadino, or possibly bakersfield. i've found it's hard to do a deep dive into a vast area, so i want to target one or two small areas that are known to have a lot of deals taking place. 

[David Faulkner]

Sounds like the Antelope Valley (Palmdale and Lancaster) may be a match for the type of things you are looking for. Be wary, though, any far inland market that has a good amount of distressed property to find, sure you may be able to pick up a good deal below market a bit easier, but you also have to worry about liquidity and your exit. These type of neighborhoods tend to be more volatile cash flow and price wise both. This affects renting it out, this affects the refinance yr 1, and this also affects an eventual exit through sale or 1031 exchange on down the road. So, really, it can very much be a double edged sword. That is not to say it still can't work out great for you, just that you need to be aware of both the upside and the downside and carefully craft and execute your strategy to maximize the upside and hedge your downside ... and if you can't or don't know how to do that, then you need to be honest with yourself and have the discipline to NOT buy anything until/unless you can. In many ways, the hardest part can be not in finding something that works, but rather in having the insight and discipline to pass on the stuff that does not.