All Forum Posts by: Jennifer Stein

Hi- I just got a notice of non-renewal from State Farm insurance for my 6 unit apt complex in Long Beach. The policy was $2200/year ($1.1M Bldg coverage and $1M Business liability coverage in this apartment LLC) and I haven't had a single claim in my past 5 year history. Unfortunately I am told most admitted insurance carriers are out of the business for insuring apt complexes in the state of CA (this was even before the LA wildfires this month. So I am left getting a policy with a non admitted carrier for likely 2-3x the price for less coverage. However, someone brought up an idea that i wanted to run by this group. My apartment bldg has 6 units, so it's a commercial loan. HOWEVER, there are two completely separate apartment buildings on the lot. One building has 4 units in it and the other building has 2 units in it. Do I need to get a commercial insurance policy or can I just get two separate Landlord Renters Property Insurance for each building since both buildings are under 4 units? Are there any downsides to doing it this way? Should I be concerned the bank may have issues with this? One thing to note- the building is older (built in 1922), is considered in a historical district, and although each unit has been fully renovated, I have not upgraded all the electrical/roof and plumbing, so that's on the older side which I know is more challenging to get insured... Thanks in advance for any advice/feedback!

Hi All- thanks so much for your tips...really appreciate it! I think i'm getting a little progress...i'm actually hoping to talk to more of a licensed handyman who does rental rehabbing and know these guys charge significantly less than the licensed contractor who does more residential and luxury apartments from the ground up....If anyone knows of any licensed handyman who does rental turns, that would be great...I have one person I plan to reach out to...Thank you all again

Jen

Hello All- Thank you all in advance for looking at this email. I had a general question for the group re: rehabbing a rental unit in Los Angeles/Long Beach area.  I am currently looking into renovating a rental unit in Long Beach.  Does anyone have a licensed contractor they would recommend that is reasonably priced? I had to pull a permit on a kitchen remodel (like for like), but now I think I have to go the licensed contractor route?  But that's $$$$....(Kitchen remodel quote was $45K and bathroom was $17K...crazy priced for a rental)...Looking for any reco for reasonable licensed contractor rates?  Thanks so much in advance!

Hello LA Group- We have been investing in ad value, MF syndicate properties around West Adams and USC the past couple of years (Following the Expo line).  We are looking into purchasing a MF building ourselves after 8 different syndicate deals, and looking to get our "Core Four" contacts established (Podcast #257 advice from David Greene).  Does anyone have any property management companies in Los Angeles they recommend? Preferably a company that deals with Rent Control markets in B to C markets?  Also if anyone has a great mortgage broker that deals with MF, would love to know!  Open to any steller MF real estate agents as well that knows the West Adams, Inglewood, Koreatown, USC area. 

Thanks for any and all advice BP'ers!

Best, Jen Stein

Hi Ruddy..thanks for posting this....I would love to join a regular meet up in Culver City/west side area anytime for networking, discussion. I’m particularly interested in discussing multifamily, and ad value opportunities, experiences in Los Angeles. Thanks for starting this thread!

Wow- thanks everyone for your feedback and advice- great points to digest...

Just to add more context on the #'s...

The purchase price is $850K for 4 apartment units & 1 commercial unit. The unit mix is four 1 bedroom, 1 bath apartment units and 1 commercial unit. The purchase price per unit/sq foot is $170K/$186. The acquisition strategy is a repositioning opportunity- two of the four apartments will be delivered vacant, and these will be renovated and leased at market rate. The other two units occupied will be given a 3% rent increase (this is a rent control market). The restaurant operator is paying significantly low rental amount and is currently out of compliance with their lease. The restaurant is currently paying $1833/month vs. market rent of $4950. If they can get the restaurant out, they will rent out to a more hip/trendy restaurant (this market is gentrifying). The GRM is currently 11.45 and the Cap Rate is 5.18 with a 3.6% cash on cash. After the unit is stabilized (2+ years), the GRM goes down to 7.3 and the cap rate (at the existing $850K purchase price) increases to a 9.8 (this area cap rate is between 4-5%...). This managing company's terms are changing to a more favorable term for them, and it will be only a 5% annual preferred cash on cash return, and the net profit from a capital event will be distributed 60% to the investors and 40% to the manager. Their previous returns on multifamily units was 70% to the investors and 30% to the manager (and 5% annual)...seems like for a new riskier proposition, the terms should be better..

Thanks again for reading. If anything sticks out at anyone re: the deal analysis, would love to hear your thoughts.

Much appreciated

Jen

Hello All...I am new to this community and also fairly new to multifamily investing. I have a full time job, so I am dabbling into the multifamily real estate syndication market here in LA, SF and NYC. I have only invested in about 3 different properties so far (ad value, multifamily units). However, there is a new investment property in LA that is a hybrid 4 Apartment Unit plus 1 Commercial Unit that is currently a restaurant that is paying below market rates. This is an ad value investment opportunity. Typically this company repositions multifamily apartment complexes in the LA area (West Adams & Inglewood) that is an ad value opportunity. This time it's still an "ad value", however, the new element is this commercial unit attached, and two of the 4 apartments will be delivered vacant. I am not sure how to research this type of hybrid opportunity- is it more risky, less risky to have a commercial unit attached? Does anyone know what the cons are to have a commercial unit/restaurant attached to these multifamily units? Would love any feedback, or any articles/key words I should use to research this better....Thanks very much all!

Hello All...I am new to this community and also fairly new to multifamily investing. I have a full time job, so I am dabbling into the multifamily real estate syndication market here in LA, SF and NYC.  I have only invested in about 3 different properties so far (ad value, multifamily units). However, there is a new investment property in LA that is a hybrid 4 Apartment Unit plus 1 Commercial Unit that is currently a restaurant that is paying below market rates. This is an ad value investment opportunity. Typically this company repositions multifamily apartment complexes in the LA area (West Adams & Inglewood) that is an ad value opportunity. This time it's still an "ad value", however, the new element is this commercial unit attached, and two of the 4 apartments will be delivered vacant.  I am not sure how to research this type of hybrid opportunity- is it more risky, less risky to have a commercial unit attached?  Does anyone know what the cons are to have a commercial unit/restaurant attached to these multifamily units?  Would love any feedback, or any articles/key words I should use to research this better....Thanks very much all!