All Forum Posts by: Nick Hedberg

I have a similar experience and my thought is there are probably certain areas where Section 8 is more popular due to rent prices. Below is the voucher payment standards for Section 8 in LA. I can see how Section 8 would be great business model (tenant risk reduction) if you can get the numbers to work out. @Shiva Bhaskar - I'll send you a PM.

http://home.hacla.org/abouts8

Great job! I've done similar things for clients but none were nearly as slick.

@David Eiges is spot on and I would add one addition: an ADU. I would find a home in livable condition with a 2-3 car garage or one that already has an ADU. Adding an ADU is one of the single best investment opportunities in LA now.

It's going to be hard to find a 'deal' but your main concern should be finding a house that is livable and has great potential to add an ADU as a rental property. IE large yard, easy access, etc. A two car garage is roughly 400 SF and adding that SF will have a great impact on value above just fixing up a property. You can re-fi and cash out down the road once the home is complete. You will have the added benefit of a rental unit!

Bonus if you can live in the ADU and rent out the main house! Just be aware adding an ADU is a serious project that can cost $80k - $120k+. Do your research and talk to contractors and companies ahead of time.

West Adams is RED HOT right now. Anything reasonably well priced will have a ton of showings and get snapped up with multiple offers. You are on a very busy street which has a major impact on value. Many people looking to live in the property won't consider living off a busy street. 2nd is the property is tenant occupied which makes it harder to sell, especially during Covid.

In West Adams 31 DOM means it's overpriced. Either buy out the tenant or lower the price. 

Hi @Aaron K. - you bring up some good points about the data from that article. Accurately tracking rented units is difficult since there is no single source of truth and the data is certainly volatile. Plus few sites actually track on "Sold" price for rentals. The listing just disappears once it's leased, or they change their mind about leasing it. The MLS does, but it's not a main source of rental listings, especially cheaper units.

My main point is that we are seeing the rental market changing. People are moving from expensive areas to more affordable areas. I would appreciate feedback on what people are seeing in their market. Here are two additional articles:

https://patch.com/california/s...

https://www.usatoday.com/story...

Due to Covid we are seeing many people moving out of higher priced areas and move to more affordable "Zoom Towns" where they can work at a fraction of a price with more space. As a result rents are dropping in many expensive areas. 

Are you seeing this in your area? How is this impacting your investing? How long do you think this will last?

• Los Angeles down 11%
• Santa Monica down 15%
• Oxnard up 15%

https://www.zumper.com/blog/lo...

Hi @Marcos Urvina. Have you considered adding an ADU? This would generate cashflow for your current property and would increase it's value due to the additional square footage.

I would not recommend selling and renting unless there is a significant difference and the numbers are rock solid. I have seen too many people that have become wealthy owning real estate to advise selling and moving to renting. Most people on this site buy properties to rent them and don't sell their properties to become renters.

Another option would be to sell/cash out your current place and buy a multi-family. The tenants can help pay down the mortgage and you can potentially AirBNB a unit for up to 120 days since you would be an owner occupant. 

Hi @Pedro Cardoso,

Great questions. First one of the keys is to get more familiar with the rents in the different areas. I like www.rentometer.com, www.Zillow.com and www.Apartments.com for checking rents. 

Learning about rent control is critical in a renter friendly place like Los Angeles. The Apartment Owners Association is fantastic resource (https://www.aoausa.com/). Also use google to find the specific rent control laws for the areas you are looking.

For overall California market trends my favorite podcast is by Bruce Norris at the Norris Group. https://www.thenorrisgroup.com... Bruce has been doing California forecasts for years now and does a fantastic job in breaking down the data and explaining WHY he thinks the market is going to move the way he predicts. 

Having a great real estate agent is critical. I recommend you search around here on Bigger Pockets and find a good investor friendly agent.

Crime is important and love using the Trulia Crime Map to see how rough an area is. Search for the property and click on 'Crime'. Best of luck and let me know if these resources help.

@Khen S. - If it's an old unpermitted garage that doesn't surprise me. I've seen many rehabs where they have to re-do so much of the old building, they would have been better off scraping it and starting fresh. I would swallow the cost and re-build or build an ADU. It's more upfront costs, but I think you will be happier in the long run.

@Hsiang Lo - It really depends on where in Hawthorne. There are some great areas and some rough areas. I always tell my clients to avoid busy streets unless it's a rental and you are POSITIVE the cashflow is too good to pass up. Remember the 3 most important things in real estate... Location, location, location.  

@Matthew Forrest is right. We need more information before we can give a real answer. If you are flipping, then avoid the busy street. If it's a rental then how do the numbers look? Do they look significantly better for the Torrance home?

The Del Aire area of Hawthorne has great schools but the schools are rough in the other areas, this makes a huge difference for buying in Hawthorne.