All Forum Posts by: Ramon Wilson

Kenneth Mooney Thanks for the reply. Sorry it's taken me a moment to respond. I just got back in country. The market rent growth of 4% to 7% is in excess of the rent control cap of 3%. In my experience the only way to get tenants to sign a lease after the initial lease period ends is to give them an incentive (ie, 1.5% increase vs 3% if they do m-t-m). Either way, if i turn the units every 18-24 months i can get 5-10% rent bumps. Even with turn costs, as long as i dont have more than week of downtime im still better off than if the tenants stays for 5 years at a max of 3% rent bumps...

I'm looking to invest in a supply constrained, rent controlled area with good rent growth (eg, most major west coast cities). I know in many non-rent controlled (or over-supplied) markets investors typically prefer longer-term tenancies, but that seems like a disadvantage inf this situation. Given the rent control rules, the only way to take advantage of the strong market rent growth is to turn units ever year or two. So, why would it make sense to buy units with more than 1 bedroom in this type of area since studios and 1 bedrooms typically turn much faster than bigger units?

Great discussion. Thanks for all of the feedback and various points of view. Seems like the consensus is that investors in la have 10 to 20 year timelines to hopefully realize appreciation and are ok generating minimal cash flow during that window...

Originally posted by @Brett Goldsmith:

In LA you can make big money in rehab projects if you get a home at a steep discount. It's tough to find a decent cap rate in LA. If you get a decent cap rate you can probably sell the home and make six figures. I think for rental income, you need to get more creative in LA. In my opinion, I'm bullish on LA long term buy and hold. 

This makes a lot of sense. Of course the key in what you're saying is "if you get a home at a steep discount". The many properties I saw that had 10+ offers were definitely not discount prices. In your experience, how does one go about finding properties at a steep discount? 

Thanks all for the thoughts. Glad to know i'm not missing some big secret. It's amazing how many gamblers there are in LA (several of the properties with 50% down and negative cash flow had more than 10 offers). You would think it was Las Vegas...

I have been looking around at multi-family investment properties in gentrifying areas of Los Angeles. I received the email below which is representative of feedback I've received from many brokers in this area. Are RE investors in Los Angeles crazy, stupid or do they know a secret about real estate investing that I don't?