I get this a lot. Why have you continuously invested in the "HOOD" South Central LA? Why should I invest here instead of Hollywood or Beverley hills.
From experience, I invested in an area (south central Los angles) that the price compared to other areas is far far lower and cash flow is much much better averaging 13% cash on cash within the first year of the investments with this particular product. The booming market itself will help with appreciation. No one in the world can tell if the market will go up or crash, but we have all the right signs that south central is the next booming market. A lot like echo park was 10 years ago if your familiar with the area. If you look at south central on the map it is in the middle of all prime real estate. You go north you have down town LA, Echo Park, Pasadena, Silverlake. You go west you hit Santa Monica, Venice, and the beach. You go south and you hit orange county prime real estate or you go east and you have more prime real estate. South central is the last pocket of affordable housing in LA. We have been consistently developing the same product for the last 20 years and it has worked in south central. We currently Manage over 4,000 duplexes within a 30 mile radius of USC and DTLA. In the last 2 years we have seen a $125,000 dollar jump in our product and its not stopping there. There is billions of dollars being poured into the south central market by very big names. We have always been in south central, but now we see the investors following the big money and investing in the "hood". Cash flow is there we average 13% cash flow in the first year on our 4,000 location and it has increased. We are getting million dollar listing in south central now. Unheard of in thew last 5 years. The change has begun and investors are staring to notice.
1. USC Village (Caruso Affiliated, 1 billion dollar project)
2. Vermont entertainment center (250 million project)
3. MLS Soccer stadium by USC
4. Carson football stadium approved
5. Inglewood football stadium under construction
We have seen a spike in prices and we feel it is because there is a new tidal wave coming. We went from selling at 450k last year to this year we are pushing 650k mark. Last year we constructed 190 of the same product 110 were sold of to investors/homeowners and the other 80 were just added to our own portfolio and we are collecting rents. We own about 4,000 of our own and have sold over 2,000 to investors and homeowners in the last 20 years. Our property management is bar non the largest in South LA. So to answer your question, I think if not South LA, I would find a market where the signs of appreciation are indisputable and cash flow is already there. If you are interested in a market like this I can send you a confidential Pro Forma that has been consistent in our returns for the last 15 to 20 years. Consistency is key and this has worked for our investors continuously. I hope it will work for you and your ventures! Best of luck to you all.