All Forum Posts by: Coty H.

I'm looking for any real life examples of relocating tenants in Los Angeles. I do not need to know the rules/requirements but am curious of the actual process, including; time frame, hurdles, actual costs, communication with tenants, local government involvement, etc. 

Any feedback is greatly appreciated. 

Thanks

Does anyone know of any regional lenders in the St. Louis area who lend on residential investment properties under $50K (after dp)? Trying to avoid the hard money route if I can but the few lenders I spoke with won't lend under $50K, regardless of the property. 

Thanks for the assistance 

@David Faulkner

Thanks for the suggestions. 

Los Angeles stats:

(1)

Bull market (first quarter of 1975 through the third quarter of 1980): real home price increased by 69% over 23 quarters.

Bear market (1980 Q4 to 1984 Q2): real price decreased by 9% for 15 quarters.

(2)

Bull market (1984 Q3-1989 Q4): up 67% for 22 quarters.

Bear market (1990 Q1-1997 Q2): down 37% for 30 quarters.

(3)

Bull market (1997 Q3-2006 Q4): up 166% for 38 quarters.

Bear market (2007 Q1-2012 Q2): down 43% for 22 quarters.

(4)

Bull market (2012 Q3-2015 Q1): so far the price is up 27% for 11 quarters.

If history is any guide, the L.A. housing price cycle seems to last about 12 years on average, of which seven years is spent in the bull market with at least 65% real price appreciation, and five years is spent in the bear market. We are three years into the housing recovery that started in 2012, with 27% appreciation so far. On average, there will be four more years or 38% more price growth before we reach the turning point. - William Yu is an economist at the UCLA Anderson School of Management.

@Duke George Brady I found the property via co-workers family member

@Ciprian L. Thanks for the response.

The off market aspect stops any bidder wars from increasing an already expensive property, which seems to be the norm in Northeast Los Angeles neighborhoods. Especially for an end user/owner occupant looking for a solid home.

Topline Numbers

Purchase price: $800,000. Property is under rent control, much like 90% of buildings in the area.

If you look at comps for the past year, it seems you cannot get into Silver Lake/ Echo Park for under $750,000, unless property needs over $200,000 of capital to achieve market rents (only a few of those seem to have sold). How will the area properties continue to appreciate?

Unit A: Lease signed for Aug 1, $2,800/mo, 1 bd/1 ba + den. This rental income decreases my mortgage to below market rents, far below what I am paying now for an inferior unit, I can then save  the difference.

Unit B: I would occupy: 1 bd/ba, conservative market rent is $2,000/mo.

Intangibles to note are location in the Echo Park Hills with expansive outdoor space including views of both the hills and downtown skyline plus a garage and parking for a few vehicles.

Thanks for the insight!

I have an opportunity to purchase an off market 2-unit property in the Elysian Heights section of Echo Park.

To those familiar with the market:

First and foremost, the property would be my primary residence and would greatly decrease my personal basis as my % of the mortgage would be less than my current rent in a much inferior unit. Saving money from that alone.  On a $/psf basis, this transaction would be at the very top of the market which is scary, however, applying the rent for the unit which just had a lease signed at very high rents and applying market rent to the other unit (which I would occupy), the deal breaks even in year 1, (including all operating expenses, mortgage, mgmt. fee. etc.).

So my question:

Echo Park has seen significant rent appreciation over the previous few years. How safe is it to rely on appreciation in a market as desirable as Echo Park. Even if we see some sort of market correction in say 2018/2019, I honestly only see this neighborhood appreciating, especially as this would be a long term hold due to the location and the functionality of the site/property.

Thanks for guidance