All Forum Posts by: Allan Glass

Everytime I hear the 2% rule I think of Achorman and Sex Panther by Odeon...

http://youtu.be/pjvQFtlNQ-M

Short and sweet request. We have capital and need more deals.

I'm also posting a need in the residential section, but commercial we need the following:

1) 500-5,000 sf retail office space on major streets  Looking for small inline units can be vacant or with tenants mid block ok, corners preferred

2) Hotels prefer San Gabriel Valley areas and/or Downtown Los Angeles

3) small industrial.  manufacturing and/or warehouse spaces under 10,000 SF prefer to be near emerging creative areas, eg. silver lake, echo park, downtown LA, Santa Ana, etc

4) Land in Downtown Los Angeles we need parcels anywhere within the freeway ring surrounding DTLA

5) last minute saves... we can quickly help you close the deal that's about to fall apart, before it goes away, give us a call.

We have the capacity to handle 15-20 deals in our pipeline at a time and buy with cash and/or our established credit lines/private funds. Our group has completed over $1 Billion in transactions and have been in the Los Angeles area for 20+ years.

Our request:

1) Please do not send us properties on the MLS

2) Please do not send us properties on which you are not in direct contact with the seller. We protect our sources, can/will sign NCND and request direct access to sellers.

Thanks everyone in advance for thinking of us.

Best of luck to everyone!

Allan

Short and sweet request.  We have capital and need more deals.

I'm also posting a need in the commercial section, but residential we target the following:

1) light/mid rehabs in all areas of Orange and LA metro areas.  We target homes we can deliver to market for conforming borrowers and/or at a retail price below $750,000.

2) tear downs - targeting Los Angeles metro area, 2-4 units and/or land that is zoned for 2 or more units.  

3) empty lots or tear downs 7,500 SF lots or larger City of Los Angeles - all zoning except R1,R2 (no R1, R2)

4) 5-10 unit under performing / dilapidated apartments.  NO rent control please.  Non paying tenants, city violations, all problem properties considered.

5) last minute saves... we can quickly help you close the deal that's about to fall apart, before it goes away, give us a call.

We have the capacity to handle 15-20 deals in our pipeline at a time and buy with cash and/or our established credit lines/private funds. Our group has completed over $1 Billion in transactions and have been in the Los Angeles area for 20+ years.

Our request:

1) Please do not send us properties on the MLS

2) Please do not send us properties on which you are not in direct contact with the seller.  We protect our sources, can/will sign NCND and request direct access to sellers.

Thanks everyone in advance for thinking of us.

Best of luck to everyone!

Allan

Decorium,

Welcome and good luck!  My quick tips to start:

1) California not Cali... 

2) determine your budget

3) grab a map and get to know the difference between West Los Angeles, South Bay, Mid Cities, South Los Angeles, East Los Angeles, San Fernando Valley, San Gabriel Valley, Downtown and surrounding areas like Silverlake, Atwater Village, Los Feliz, Echo Park in a general sense.  These can all be considered "Los Angeles" but vary dramatically in price, demographics, and demand

4) rent a car when you arrive, get to know how the areas connect to each other and where the "center of gravity" is for each of these areas

5) Once you've set your budget find 2-3 brokers who have several listings in the areas you'd focus on, buy them a cup of coffee and pick their brain on what direction the areas is going, where the deals are, how to best position yourself to buy

6) bring proof of funds, your conversations with brokers will go much farther once you show them you can close.

7) understand that what you see in spring will not be around in December if it's worth buying.  This is a highly competitive market and good rehab deals don't last more than a couple days.

8) have fun and tell us what you think after your visit.

Cheers,

A

great work @Eyal B. 

may your buildings always be full!

-A

Hi @George Lopez 

 @Account Closed is right cap rates reflect risk on a cash flow to help you compare the NOI from one property to another in a particular market. Further, it only provides a peek at cash flow for one year which can be very dangerous.

As was noted in another comment "proforma" or "projected" cash flows can be completely fabricated and should not be relied upon.  We always buy off Actual cash flow and after reviewing rent rolls and actual expenses.

Be very careful not to make assumptions about areas or properties simply based on cap rates and even more careful about applying cap rate advice (rate specific) from one market to another.  For example a 9% may be difficult or impossible to find in Los Angeles, but commonplace in Ventura or Riverside counties.  A 3% cap rate may be common in New York City but ludicrous in Phoenix, Az.  You get my point.

Another note, if you're buying 2-4 unit properties, specifically in metro Los Angeles markets you can set all of this aside.  These properties are difficult to buy off income for the present moment in this market.  You're competing with homeowners who buy units to live in one and offset their mortgage payment with the other units, and/or investors who buy, renovate and quickly sell these properties to those same owner/users.  It may be temporarily impossible to find small units (2-4) in Downey and the surrounding cities that will cash flow as buy and hold properties, especially if you need to get a loan.

@Wayne Brooks thanks for the blast from the past, I haven't heard anyone discuss a FMRR since graduating college.  Love it!

Best of luck

A

 -

@Account Closed you're off by at least half.

I'm not clear what you consider to be mid class neighborhoods, but for apartments, by this I mean 5+ units, we underwrite hard costs at $135 psf.  When you add in permits/fees and soft costs (engineering, arch. etc) we underwrite another $75-$90 psf.

This is assuming flat land and parking on ground level.  If you have to go subterranean for your parking you can assume about $25k per spot.

The examples on the MLS you pointed to are 2-4 units which can be done less expensively and are in neighborhoods where more cost effective materials and finishes could be used and still sell. I'd expect all in costs (again SFR and 2-4 not larger apartments) at $135-$150 psf.

Several of my clients who build/sell 50-100 2-4 unit properties a year in the neighborhoods you've given as examples could build at $80-$100 psf only because they use the same architectural drawings have crews on salary and don't bid out via General Contractors and buy materials in bulk and at wholesale trade prices.

The markets we consider Mid Class would be Culver City, Palms, Mar Vista, Silverlake, Echo Park, etc. In those areas we expect all in costs for SFR and 2-4 units at $250 psf.

Best of luck

A

Hi again @Lindsey Drumheller 

Try searching by APN numbers instead of address.  If they don't show up in Zimas, confirm they are city of Los Angeles, not part of the unincorporated County of LA.

Also, less is more with this system.  meaning "123 main" is a better search term than "123 s. main street"

Hi @Lindsey Drumheller 

Google zimas

And navigate la

Best

A

Hi @Ariel G. 

I do a lot of work Downtown and can't think of any buildings that have a formal position on vacation rentals, I'd doubt any HOA would take such a position in the early stages of that industry.

Your success here would likely hinge on the same factors you'd find anywhere for this strategy.  1) how open and transparent you are with your neighbors 2) how selective you'll be with your guests/tenants 3) how responsive you'll be to complaints and problems.

Condo owners in urban areas, such as Downtown, will be very concerned about their safety and ability to limit access to their buildings.  If you're consistently giving unsupervised access to visitors/guests that will undermine those security concerns.  Make sure you've addressed this before you make your purchase.

Having said all that, there's always a "first guy" why not you?  I'd target buildings that are investor friendly and perhaps where there are a greater number of tenants vs. owners in residence.  You'll likely want to pick an area that either targets a specific niche (think Arts District for culture travelers or Financial District for business travelers) or pick the tourist/convention centers such as South Park, near Staples Center.

There are a lot of hotels planned Downtown and that are coming online and under construction make sure you understand hotel rates and have a value proposition to set you apart.

best of luck!

A