What are the good areas in Los Angeles to start investing ?

Question

Hello BP ! I live in Los Angles for only 2 years and I am new in Real Estate - I will be buying my first property pretty soon, what areas would you recommend ?

Thanks for your time !

Nabil Suleiman · Answer

@Jeremy Pelle

You have some options if you are looking valley. I am a fan of NoHo. There are pricey parts and no yet pricey parts but are getting there. If you can find something in valley village, that has some convenient and fun areas near by. I have had clients buy in Sun Valley and are happy with it, Tujunga if you like the mountains. In terms of one investment being better than the other that would be hard to say. I would look at the potential of the LA river and the places that surround it. It was getting a lot of love for a while, but honestly.. with budget cuts happening due to our current environment Im not sure how quickly those things will happen.

If you look at bigger developers like Curoso, or anyone like him and find the places they are putting new developments into, you can buy around those places and generally have a pretty good expectation that the properties around them will rise in value because of it. (aka look at Glendale after the Americana). also look up NoHo West. Those are just some ideas.

The conversation really goes a lot deeper but these are just concepts.

Nabil Suleiman · Answer

@Jeremy Pelle

Hey Jeremy. That question honestly depends on so much.

Where do you work?

How far are you willing to drive if its in a more expensive area?

Do you want a home, townhouse, condo? (price range more or so dictates that depending on question 1 and 2)

Are you looking to move in and house hack?

How much work are you willing to put into the home?

Lots of people will have their favorites. I live in Pasadena, but find a majority of NELA to have fun neighborhoods with their own personality to them. I also enjoy mid city, downtown LA, Culver City Larchmont, Los Feliz.. the list will go on, but it will depend on some of the questions above and then minute details once you find the neighborhood you truly enjoy.

Leeron Regev · Answer

@Jeremy Pelle Couple of questions for you.

Are you going for a long term or short term play?

What is your budget? I saw above you mentioned between 500k to 700k?

What is your goal? Do you want to flip something? or buy an already renovated property?

Is this for an investment or to live in?

Finally, how much are you trying to make on your money? Like what type of returns?

I think there is a lot of value to be made in many cities within LA depending on what type of return you're looking to make and your end goal with the project.

With your budget try looking here in SFV - Woodland Hills, West Hills, Canoga Park, Reseda, A lot of new development going on in -North Hollywood/Studio City/Toluca Lake Areas

You could also leave the SFV with your budget and get a "better bang for your buck" - By trying South LA, Palmdale, Lancaster

I've seen investors play in all of these markets and make money - all depends on your strategy (what type of returns you're looking to make and if you are trying to hold/sell) Also, huge factor is your basis or how much you are buying the property at.

Hope this helps :)

Austin Mudd · Answer

I am focused more so alongside the West LA markets surround the 10 FWY, so I can speak to those markets.

Generally, if you're looking for maximum appreciation from apartment properties in LA, you need to create value. This is usually from a combination of adding value by renovating the property and also from turning units over to market rent that were previously below market value (if you so happen to have units turn during your ownership).

For example, if you had a 1BR rented at $1,800 in Santa Monica and turned the unit over to market rent at $2,600, that $800 difference in rent equates to $9,600 more annual rent, or at a 5% cap rate, $192,000 of value. Imagine for example you spent $40k on renovations as well.

There's also the option of buying in areas with long term tailwinds pushing the market ahead. For example, Culver City is booming right now, so you can look further east to capture this growth at lower pricing.

Jeremy Pelle · Answer

Hey @Leeron Regev ! , Sorry for the late answer, for some reason I did not get the notification.

I love your questions, they actually make me think deeper once again about my goals !

So I am going for a long term play on the investor side and mid term for my first purchase. The goal is then to repeat the process so I will have to move out probably.

Unfortunately I don’t have the skills and knowledge to flip but I am do prefer property that needs cosmetic upgrade.

That’s for an investment and to live in! House hacking I guess…

About my return, my first goal would be to live for almost “free” by owning a duplex or triplex and live in one unit.

Thanks for the tips about the areas, very helpful!

Thanks a lot Leeron.

Brett Goldsmith · Answer

I personally would be willing to buy in basically any area in LA county at the right price for short term plays. For longer term plays I'd likely stick to the valley or better city's in LA that I feel would offer more appreciation.

Jeremy Pelle · Answer

@Nabil Suleiman

Woua! That is super helpful Nabil! I will check on that very soon.

Thank you so much !

Jeremy Pelle · Answer

@Nabil Suleiman Hey, right it misses some important information, let me clarify :)

I work mainly between Hollywood and Downtown LA. But the value of the property (appreciation/cashflow) is worth the drive if I have to (30/45mins max).

Yes I need to live in. I am willing to put up around 550K to 700K if really good deal. For now I am scanning only the Valley because it is a nice area and mostly because I am not sure which other area would work for me and for my investment

What are the good areas in Los Angeles to start investing ?

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