palmdale lancaster los angeles

[Alex J.]

Hello all

I know this msg board has infinity wisdom but if i dig up the old posts on my question the answers might be different given the market has moved.

Ive been mulling over the idea of buying some rentals in the palmdale lancaster area

the thing i am having reservation about is the following:   1)  i am not sure if cap rates north of 8 or 9 exist there, i was really trying to find some 10 caps so that the risk of vacancy or damage to property by tenants get covered.... DO 10 CAPS exist in this market anymore? Am i being too too optimistic in thinking that they should?

2)  I know that the key to good tenants is screening screening screening and I actually have rentals in South LA etc so i am aware of the C markets but for those that are investors in the area...do you see a lot of damage in your rentals after the tenants move out? I have heard a lot of horror stories

My objective is to find some lower price point cash flowing rentals as I feel the LA market has matured and peaked quite significantly... my idea is that if i lose 10% on a 300k property mark to market (unrealized and potentially cover the note if i have to in a worse case scenario ) its not as bad as losing 10% on a 1,000,000 property mark to market (and potentially realized due to an inability to stay solvent if it remains unrented longer than i have reserve)

any feedback would be appreciated sorry if this post is in the wrong category