@Chris Gawlik we do D class only because that’s all we can afford. Then metropolitan LA area is running out of develop-able lands so the value is climbing rapidly. It’s both good and bad. Cons: Yes, we can be in the slumlord category because we don’t improve unless absolutely necessary. Nothing fancy just bare minimum with the cheapest material. Next, with the rapid appreciation, the repair cost has nearly doubled. When we acquired this properly in 2015, we used to pay handyman 20-25 per hour. Now it’s minimum 45 and usually 60 and up. Thus, our funds must be preserved for the event any of the tenants leave so we can improve and charge market rent. Indeed, one of our tenants moved out because the crime rates became unbearable to them. After they left, we cleaned it up and posted on the Craigslist with 40% higher rent than previous tenant paid. We did one showing and the lease was signed 2 days later after we did all the background check. So I guess this should have been categorized in the pros section. Trash on the street is terrible. We have to file a report at least once in 2 months for illegal dumping in the alley. Pros: tenants are super grateful to have roof over their head. Even though it’s rent controlled, we don’t feel the level of tenant entitlement is as high as A or B areas. They pay on time and if not they pay 6% late fee with no complaint. Our tenants seem to understand the simple fact of no rent, no roof. Thus, none of our tent missed rent / late fee with or without covid19. There’s no entitled nonsense the state of California promotes. Best of all, it breaks even or cash flows positive while most of A and B class neighborhood in LA do not.
