There are no profitable single family rental homes on todays L.A. housing market, with the possible exception of the least expensive properties in town. The example that you mention in Sherman Oaks would need close to $3000 a month in rents just to cover the debt service on your downpayment and loans not including maintenance and repairs. There are also plenty of homes for sale south of the Hollywood Hills in the L.A. Basin proper that will have a lot stronger appreciation in the long-term.
Here's a link to a blog that I recently wrote about investing in Los Angeles which may be helpful.
Please feel free to contact me through my profile if you need specific property searches run or if you would like to discuss your options further. Best of Luck.
I would say that it is pretty much impossible unless you are willing to work with a major fixer and you would probably need all cash. When banks lend money on a home they use all comps within the last 3 months. So, in Sherman Oaks, over the last three months, there have been 12 homes sold under 450k with only 2 under 400k. One of the two was boarded up by the city and the other was an REO from Indymac. It was near the corner of Burbank and Van Nuys. If you know the area it is behind the car dealerships, not the best of locations.
If you want more bang for your buck, there are about 90 3 bedroom 2 bath homes in the Mission Hills/Granada Hills are under 450k. If you want to stay near the strip, Encino/Tarzana has about 15 such homes. If you want to expand your rental base by being near really good schools, Burbank has 8 such homes. I can email you a list of all these or other areas if you like.
I do agree with the agent below, right now the rental market is strong. Even though housing prices are not rising significantly, the rental market is very competitive. And many of my rental customers are looking at condo's. However, I would say that my view of the quality of the rental customers is not that exciting. In our apartments we have had applicants with FICO scores in the 400's. You will find some that have 700's but our experience is that those are not too common. Everyone that is losing their homes to foreclosure or short sales are going into rentals and many have taken a beating on their credit scores.
Let me know if you need help.
The rental market is strong - if you price it right. I know that sounds obvious, but it is important to note that there are quality tenants out there! I just rented out a property in 2 days with over 10 applicants.
Let me know if I can be of any help.
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