All Forum Posts by: Ilva Kibare

@Stefan Isaksen

The owner occupation was my 1st thought as well, I just have not reached the personal capital for 25% down for investment property vs. 3.5% down if the property comes with an open unit already. I am working on getting more or less solid interested investors lined up to co-invest with down payment. Stay tuned.

But there is a bidding war for rentcontrolled units, like the one I described. The buyers must have something in mind? 

I am looking in to small multifamily units in promising areas in Los Angeles, but the rent control is really tampering with my projections.

My latest interest a 4-plex near USC ~$450/month /unit in the area where market rents are $1400 for refurbished unit or ~$800-900 for one with similar conditions. This kills my numbers considering rent control issues.

What tactics have proven most profitable out there to overcome rent control obstacles besides annual rent increase of mandated 3% or so max.

@Nabil Suleiman

That's right. I did consider that and just acquired rent info - ~$450/month /unit in the area where market rents are $1400 for refurbished unit or ~$800-900 for one with similar conditions. This kills my numbers considering rent control issues.

I will start another thread to see what tactics are most profitable out there to overcome rent control obstacles besides annual increase of mandate 3% or so max.

@Mark Pedroza

Thank you for the input. The property needs a complete refurbishing, I estimate 75K to 100K to bring it to the price of the adjacent compatible properties. But of course it is LA where bidding wars and high prices are the norm regardless of the condition of the property. 

I have several questions regarding probate process for small multifamily (4-plex in this case) that is listed with an agent. The property is in Los Angeles, is over 100 yrs old and has 60+ yrs of deferred maintenance, is fully occupied, and is subject to rent control. With my assumptions on the current rents being collected and me needing to finance the property, I would have to offer below asking price to make the numbers work with current tenants in place. The plan is to fully upgrade the units as the tenants move out and raise the rents to market level or find the way how to turn them with cash for keys or some other ways.

1) Are there any legal obstacles why the offer below asking price could not be accepted?

2) When typically can I get access to the information to complete my due diligence (rent roll, etc.)

3) What are typical contingencies that probate sales do not accept in compare with regular sales.

I appreciate all input.

From my inquiries the construction costs these days have a huge range for the same type of construction. From 100 to 400 for 2000sqft project. And such variation can simply kill the profit. That for me is the hardest part to run the numbers.

Most of the infill builders have their own crew on payroll, but even then they are complaning about costs creeping up.

Have you researched if 203K loans are still available in LA and if any sellers in a lower priced market are willing to wait through the FHA process?

I am in the same mindset as you are. I will be actively prospecting in the No Ho area starting in August. I have thought of a possibility to look for a 4-plex with a like-minded person in a similar situation so we could put the downpayments together to get a higher cashflow chance. So far my estimates are that with 3.5% down and me living in one of the units and paying market rate rent to myself, I would have to offer $100K less than asking price to break even ($0 cash flow). The break-even would work with 10% down, but I can't deliver that on my own.

Is anyone working with a wholesaler friendly title company in Los Angeles area?

Is anyone in this community doing wholesaling in California, Los Angeles county? Where or who would be a good source for assignment cantract and the wholesaling process in general review? Would realestate agents have that knowledge? Is my best option to find and solicit local cash buyers based on their bandidt signs or other advertisement?