As the other agents have mentioned kudos to you for realizing now is a great time to buy for long term appreciation. Your interest in investing "sweat equity" should also pay off in the long term as you personalize your space.
In terms of identifying the paths of progress I always suggest using the "bookend" theory. Identify areas which are already highly desirable, like Hollywood, or places where large amounts of public money has been spent, like Downtown LA (eg. Staples Center, LA Live), and find the neighborhoods in between.
In your $200,000 +/- budget I'm a big fan of the West Adams Neighborhoods and Mid Cities. This is the area between Culver City (Bookend #1) and Downtown LA (Bookend #2) running along the 10 freeway. The homes are vintage 1920's and similar to the homes you'd find in more expensive neighborhoods like, Silverlake, Westwood, or Hollywood. The area is also centrally located between the city center and the Westside. Another added benefit is the pending expo line http://www.buildexpo.org/ which will connect the area to USC, Downtown LA on the east and Culver City (and eventually the beach) to the west.
Happy shopping, and remember finding an emerging neighborhood is like antique shopping, you've got to get out there and rummage. Eat in local restaurants, find the local coffee shops, watch for local retailers.
Best of luck and feel free to call or email should you have any further questions.
-Allan S. Glass
ASG Real Estate Inc Â®
Here's a link to a blog that I wrote about this question last year. I hope it helps. $200k may be a little low for these areas, but $250 to $300k is not. This is for prime-time, L.A. Basin real estate not the valley or other areas. Please feel free to contact me if you'd like more information. Best of Luck.
First of all, congratulations on a great plan to invest, fix up slowly, and hold. Real estate is best as a long term hold; the "fast turnover" approach with skyrocketing appreciation we saw in the past decade is an anomaly. Real estate, in the long run, with 20% down, an eight month reserve of funds for principal, interest, taxes, and insurance, and monthly payments you can afford, is still, I believe, one of the best investments you can make. And historically, the facts bear this out. (Don't forget the current Homebuyer Tax Credit, and the interest income deductions you may be able to take advantage of.)
Anything you purchase in the $200,000 range at this point will appreciate nicely, because there is always demand in the "bread and butter" lower end of the market.
For purposes of this answer, I'll assume you want a single family home.
If you are looking for areas predicted to catch fire over the next decade, Downtown LA is hot hot hot. Investors are pouring money into revitalizing the downtown, and surrounding neighborhoods will benefit. New restaurants, businesses, lofts, and renovated apartments make this an investor's dream. Even forward thinking real estate firms are opening satellite offices there!
I just sold a property in the Inglewood area, and some of the neighborhoods there are charming, populated with both families and singles. You can get a lot of home for the money, and not necessarily a short sale or foreclosure, but a real retail sale.
I agree with Rebecca that San Pedro is lovely, but I am not confident that the upside potential is as good as some other areas.
Set yourself up with a ListingBook account, so you can search every MLS in the LA Basin, and have properties delivered to your inbox daily. ( http://thebremnergroup.listingbook.com/ )Educate yourself on various markets before you make a buying decision. And be sure you check neighborhood demographics on crime, income, schools, etc. before you purchase. Those items will directly impact property values, now and for the long run. Do your homework, and this will be a wise investment that pays off for years to come.
Good luck, and let me know if I can be of further assistance.
Certified Short Sale Professional
Blogging at: http://TheBremnerGroup.com/blog
I have to agree with Eric also, that 90028 and the Hollywood flats are an INCREDIBLE opportunity right now. If you are in it for the long haul, there are not many better investments than properties near the east Hollywood area that is being gentrified and overhauled with new businesses, residences, and young money. Go for it!
To be honest, I really like the 90028 where you are now as an investment over the next 10 years. Hollywood is exploding with Billions in new development and will emerge as one of the most desirable urban places to be in all of Los Angeles over the next decade. I just closed a deal for an out of state investor client of mine, who purchased a loft in Hollywood for this very reason. The only problem is that I don't think you could really buy anything for $200,000 unfortunately. I have had a client looking for a house in this price range for some time now, and it is tough. We have found a few in the Valley (Van Nuys isn't bad as it borders on more expensive Sherman Oaks), but most require patience, as they are either run down and foreclosed or short sales that have not yet been approved.
I would be happy to do some research within your given criteria in areas you are open to (ie how far outside of Hollywood you are willing to go), and see what we can make happen. A qualified buyer has a lot of power to negotiate right now and there are definitely deals to be had out there. There may be other loan options, depending on your specific goals, that would allow for a higher purchase price also that may allow you to live close to where you want to be.