All Forum Posts by: Ewa Reza

@Dustin Cook Have you thought about buying 2-4 units in Los Angeles and living in one? This way you'll be able to afford way more here. I'm assuming you don't own anything in CA yet. With $20K-$30K down (using FHA financing) you can get a decent property in LA. I'm not opposed to out of state investments (although I wouldn't invest out of CA myself) but going out of state before you purchase something here seems like a lost opportunity.

You can definitely assign a purchase contract. Except REOs!

Yes.

@Bryan Christopher

By "not hot" I mean I don't know anybody who is thinking about buying 2-4 units in these areas. And I know quite a few people :) The numbers just don't work. Also the rents are relatively stable comparing to other North East areas like atwater, cypress or glassell park where rents went up 30+% within last 2 years. 30% is my observation only. You could find a one bedroom apartment here at $1250/month 2 years ago. Now I see ads on craigslist between $1600-$1800. 

@Michelle Mapp

 I live close by but I wouldn't buy in Pasadena, Glendale, Burbank etc... You will premium there simply because there's no rent control there. Also I don't see these areas as being "hot" both sales and rental market wise.

Right now I'm putting a deal together for one of my clients in North East LA...

It's $700K duplex. We should get it lower though. The listing agent made some mistakes and the property does not get adequate exposure. Lucky us! :) But assuming we can get it for $680K the PITI would be under $4300 and than (without any renovations) the rents will bring $4000/month. A lot of inexperienced people would think it's not a good deal but:

A) when you consider all tax deductions and depreciation the buyer will be still in plus. A lot.

B) if buyer does renovations this would bring the rents up to $5000

C) projected yearly appreciation for this area is 7% so it's like $47K extra equity (profit)

And it's not that hard to qualify for FHA assuming that renting one of the units will add minimum $2000/month as your qualifying income.

I would consider this a very attractive deal for decent up and coming area of Los Angeles.

I usually can find for my clients 2-3 interesting properties a month. Obviously depends on areas you're searching in. I  focus on NELA and mid city.

I would rather get en entry level duplex in LA. You can find these under $450K in decent areas. It will cost you under $20K to get it. Super easy to rent out, better appreciation and low maintenance.

Yes, it's an overpriced market. As a buyer agent I see realtors in Los Angeles every day coming up with the most ridiculous listing prices. And they still manage to sell! There is so little inventory and people search for the right home for months and months and eventually give up and take anything that they didn't get overbid on.

I was telling my friend last night about a tiny property in Mt Washington (area that most of Angelenos is confused as of where it is located - near Eagle Rock) that came on the market about 2 months ago at $405K. It's a tiny 550SF cottage. The listing agent herself admitted she overpriced it. The first open house over 80 people showed up.It closed at ridiculous $470K! 

Was it overpriced? Yes

Was it bad idea to buy at this price? No.

Seems like these rents are kinda high for such a small space in rural area. At the end... if you're looking for cash flow only these numbers work. Without knowing the area I can't tell if it's a good deal appreciation wise. I like what @Clarence Johnson

 said: "You don't want a slow appreciating $50k property out of state to get in the way of a strategic Ca purchase that can net $100k equity in a few years."

@Kevin Kim

In a good part of Los Angeles you may not be cash flowing right away, it may take a few years; but in a final calculation you'll be in plus (considering interest and insurance tax deductions, depreciation, building equity instead of paying for someone's mortgage), etc). Buying 2-4 unit is definitely the way to go. Just keep in mind that closing on 3-4 unit is much more complicated. It's not only you that needs to qualify for FHA but also the building itself and with low rents (rent control) 3 & 4 units hardly ever qualify. But it happens. And when one comes up on a market you have to be ready to pounce.

BTW there's a good duplex on the market right now in North East LA... You can PM me if you're interested in this area.

@sherry 

@Sherry G. The answer to your dilemma is quite simple actually. Buy a 2-4 unit! You'll only need 3.5% down. If that's all you have duplex is your best option as 3 and 4 unit purchase will require you to have significant reserves in a bank (among other difficulties 3&4 unit financing creates).

If you're expecting decent appreciation on your condo in NYC do not sell it now. Sell it when you're ready to buy next investment property.

Feel free to reach out privately if you have questions.