Home Buying in Los Angeles>Question Details

Jeff Beaulieu, Real Estate Pro in Los Angeles, CA

What are the best opportunities for real estate investors in this market?

Asked by Jeff Beaulieu, Los Angeles, CA Thu Jul 8, 2010

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Everyone has different ideas about what makes an attractive investment. However, I'd like to offer a couple of ideas that focus on the financial aspects of buying property in L.A., assuming that we're talking about long term investments.

The most important thing to remember about investing in L.A. is to never buy a mediocre property. There is a startling potential for appreciation on properties in the L.A. Basin proper and beach cities. This is going to get a lot of people mad... but everywhere else is strictly second rate. If you're not taking advantage of this when you buy a property in Los Angeles you should probably be investing somewhere else given the kind of deals that you can get in places like Las Vegas, Texas, and Florida right now.

This being said, L.A. isn't a great town for profitable multi-unit properties, especially from Downtown to the beach, which is some of the most expensive real estate in the country. Single family homes can't be rented profitably anywhere in the city and multi-unit properties that run close to, or in the black are unheard of in all of the upscale areas from the Beach Cities & Westside to the Hollywood Hills.

The best investments in the L.A. Basin are found in an arc from Downtown and Koreatown to mid-Wilshire, Picfair (Pico & Fairfax,) and the Baldwin Hills. This is essentially where the 'gentrification' of the L.A. Basin halted a couple of years ago. Profitable multi-units can occasionally (though not routinely,) be found in these neighborhoods and the potential for appreciation is considerable. I expect the Los Angeles basin to go high-rent from the beaches all the way to Downtown & USC, and southward to the LAX International Airport glide path over the long-term as the market starts to get healthier.

This leaves Long Beach. In my opinion, Long Beach (and San Pedro to a lesser extent) are the best investment opportunities available in Southern California. There are usually a more than a few profitable properties available as well as a hand full of really attractive investments on the market at any given time in these undervalued communites around the habor. As the only affordably priced coastal real estate from San Diego to Santa Barbara, the full revitalization of these cities is inevitable and in fact, already well underway.

Profitable muti-units by the beach with a lot of potential for appreciation, what's wrong with this picture? Maybe nothing.

Please feel free to contact me If you'd like more information about investment properties in Los Angeles. Best of Luck.
0 votes Thank Flag Link Mon Aug 2, 2010
Distressed Properties
(Short Sales, Foreclosures, Hardship Cases)
0 votes Thank Flag Link Thu Jul 15, 2010
The best opportunities for real estate investors in this market are in distressed properties, particularly pre-foreclosure short sales. Homes in pre-foreclosure already has a Notice of Default filed payments have usually stopped and the bank may want to avoid the cost of judicial foreclosure creating an opportunity for a good deal.

The Foreclosure process starts when a homeowner cannot pay the mortgage and ends when the home is resold.

The three stages of Foreclosure are: Pre-Foreclosure, Auction, and REO/Bank Owned.

Pre-Foreclosure is the time period a homeowner has to repay the delinquent amount of the mortgage.

If a homeowner does not pay the mortgage the home is auctioned

If the bids do not meet the reserve the lien holder (bank) reclaims the property and it becomes a Bank Owned REO.
0 votes Thank Flag Link Thu Jul 15, 2010
Buy low, sell high!! Right now is a good time to buy a home. Contact a good realtor, get some low interest rates, put 25% down to help you with that and go buy something. Good Luck!!

Matt Puzz
Citizens Choice Mortgage
0 votes Thank Flag Link Thu Jul 8, 2010
Buy to rent it out. That way every month you make money. If the house goes up or down in value is not a big deal. The renter is paying the price and you get the profit.

If you buy to see the house go up in value you could be very disappointed if it goes down, and those lower prices are likely to come over the next few years.
0 votes Thank Flag Link Thu Jul 8, 2010
Jeff your options have perhaps never been better than right now. No big mystery that immediately following a huge market drop that great bargains can be found. Many investors are rushing into the market as we speak. Competition is already getting fierce. Anybody with decent credit and 31/2% down payment can buy a REO or short sale. Guess what that means? Multiple offers on the best deals and selling prices that are squeezing out the profit margins.

One of the best ways to reduce the competition is to buy property at the trustee auctions. In Los Angeles as in most areas these are all cash only sales. This reduces the competition and therefore also typically reduces the selling price.

The company I work with for buying trustee auctions homes is tREO Capital Group. They have a great platform and they even guarantee title. This helps to reduce risk. If you have more questions please feel free to contract me at any time.

Seth Phillips
<a href="http://www.SmarteRealEstate.com/treo-properties">Los Angeles Foreclosure Homes</a>
0 votes Thank Flag Link Thu Jul 8, 2010
working with your Realtor to find the homes with the best equity. Foreclosures are a consideration, but may have to do more work on them. Short sales are also a consideration if you are willing to travel down an unknown road with unforseen risks - can work out really well if you have the patience.
Best of luck

0 votes Thank Flag Link Thu Jul 8, 2010
Short sales. OR if you have a couple million to work with & all cash, study up on bidding at the auctions.

You need an aggressive agent to find the best short sale deals, one who will also personally meet with appraisers & present the best case to the bank on why the price offered IS still a good deal for the bank & will net them more than if they let it go to auction.

562-430-3053 cell
0 votes Thank Flag Link Thu Jul 8, 2010
The best opportunity really depends on you, your financing, and your tolerance for risk. For investors with smaller amounts of cash and limited access to financing small houses and condos as rentals work best. With more access to cash, its a question of risk tolerance and expected return. I have clients who are fixing and flipping profitably, clients who are buying large apartment buildings, for steady, predictable cash flow and clients who are fixing and renting. Any of them make sense right now, it all depends on you.

Feel free to call or email with any questions.

Richard Schulman
#1 Listing and Selling Agent
KW Westwood
0 votes Thank Flag Link Thu Jul 8, 2010
Hi Jeff,

In my opinion, some of the best opportunities for investors right now is in the distressed property arena, more specifically purchasing short sale property. In many markets, more than half the given properties available at any one time are short sales, and many buyers and agents do not want to even pursue them, because they feel it is "too much trouble" or a "waste of time" considering the bank may not accept the offer after weeks or months of waiting - because of this there can be less competition among buyers. There are definitely some great deals to be had in this area, and if you are diligent and patient, there are some fantastic opportunities to purchase properties often below fair market value. Feel free to contact me if you would like any more information or have any other questions.

Have a great day!

John Barry
DRE #01856079
Coldwell Banker Residential Brokerage
Cell: 323-810-7976
Email: john.barry@coldwellbanker.com
Facebook: http://www.facebook.com/RealtorJB
Twitter: @RealtorJB
0 votes Thank Flag Link Thu Jul 8, 2010
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