All Forum Posts by: Ewa Reza

@Lee L. Downtown Los Angeles is the place to be if it comes to SFR. Especially Chinatown. That's where "big fish" buy everything they can put they're hands on these days.

Otherwise small 2-4 units is the way to go.

@Daniel Mawyin Not sure what the problem is on your credit, but it will take you a couple of months to fix it (unless it is bankruptcy or short sale issue). You need FICO score to be above 580 to qualify for FHA with 3.5% down. I usually see a couple of good 2-4 unit buildings a month in Los Angeles that seem like a smart investment. If you're doing conventional loan with 25% down, you won't have a problem finding even more of them. If you're doing FHA that's when things get tricky, especially on 3 and 4 units.

@Decorium Johnson rehab business here is extremely competitive. A couple of months ago there was a property in Silver Lake that popped up on the market. It's an interesting, older, hipster area of LA. The asking price was $599K for pretty much a tear down. Within 2 weeks there was 62 offers on the table. I'd say anything under $800K has competition that's just too hard to beat. So I moved my flips to Arizona :)

But if you're into buy&hold there are definitely some interesting properties you can pick up. No SFR tho! These just don't bring cash flow unless they're in not so great neighborhoods...

@Daniel Pierson Is this your first property you're trying to buy? If not, I wouldn't disqualify LA just yet.

Sorry @Kenneth Z. but you're only right in theory. Practically buying 2-4 unit $500K property in LA using FHA is not the same as buying 10X $50K properties out of state. You'll be out of pocket $$80- 90K more!

And you don't take into consideration costs of operating/maintaining these properties out of state which will be much higher. 

Just as you don't consider way higher tenant turn over out of state. When I have a vacancy in LA I do one open house on weekend and have multiple applications. I don't even have a break between tenants to paint the place. I do improvements/ repairs AFTER new tenants move in. That's a very unlikely situation anywhere else, even Temecula :)

I don't know the current numbers but 1Q of 2014 vs 1Q of 2013 Playa Vista had "negative appreciation". Basically the median prices went down 13% year on year. Great place to buy if you ask me!

I think you need to upgrade your screening process, not the property!

But seriously... it's an area specific question. I only know one person who lives in Murrieta and she's a professional cat breeder. So it's all about who lives there... I think if your rents are at or below market value you should not concern yourself with upgrades. Does it matter if you'll have 5 applications or 10??? Would you know how to choose the right one and be 100% sure you made good decision?

I have rentals in LA and they are OLD. I mean 20s old. But they're clean and in safe area and I manage to rent them what's considered above market value. Clean + hardwood flooring is already "upgrade" for my area :)

Like @Jesse T. suggested, get the list of work done on paper. Rehabbers like to take shortcuts so you want to make sure they didn't just put a lipstick on a pig.

LA market is very specific. It's always nice to hear different opinions from around the country but you have to do what works for your market and reading about your situation, go with the $700K duplex. No doubt.

@Lee L. you may change things on lease like the method of paying lease or the requirement of all repair request to be done in writing, etc. But you can impose "curfew hour" at 9pm like Francis suggested or change a smoking apartment into non-smoking. 

I agree with @Josh Prince What @Francis A. is doing is coercion and it's illegal. You can not force a tenant into signing lease with you as a new owner. They are legally obliged to sign a lease ONLY if it doesn't change terms of the original lease, otherwise they don't have to and you can do nothing about it. I'm shocked your real estate attorney didn't tell you about it.