Author Topic: RE opportunities near Los Angeles  (Read 2867 times)

dragonwalker

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RE opportunities near Los Angeles
« on: November 29, 2024, 12:43:55 PM »
My spouse has a SFH that we live in, and I have a condo that I rent a room from. We live in the suburbs of Los Angeles and we were thinking about potential real estate opportunities. Our goal is to create different sources of income, diversify, and slowly begin to replace our regular income. We wanted to get some advice about our thinking on the issue to see if we are going about this the right way. 

Prices and interest are still high in the areas that we live so when looking at home whether they are SFH, condos, townhomes it doesn’t seem to yield positive cash flow if only putting 20% down and renting out using the estimated rates on Zillow. My thought was that there could be more possibility further out from Los Angeles in areas that are between 30-50 miles away. Comparing prices to rent suggests that there is some room to at least break even or make a profit in theory after accounting for housing expenses, HOA, etc. If we used a loan perhaps refinancing in the future will allow for lower payments.

Fortunately, we do in theory have the ability to pay cash for houses up to a certain amount but it would require paying capital gains from sales of stock.
We each own homes and I’ve rented/rent out my family has had even more experience with owning and renting so we have some experience doing this however I am not sure if there is an opportunity at this time?   

We don’t have any special skill to do any extensive repair or remodeling of homes on our own and would need to hire someone so we can’t really buy fixer uppers.

clarkfan1979

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Re: RE opportunities near Los Angeles
« Reply #1 on: November 30, 2024, 07:02:01 AM »
This seems like a personal decision based on personal preference. You said you want multiple income sources. This means that you want cash flow. However, do you really want cash flow? Cash flow properties typically involve more work and less appreciation.

For me personally, I'm not really looking for cash flow. At this point in my life, I don't need the revenue stream and I don't want the extra work. Due to higher interest rates, the current market is slower than normal. The last time I remember it this slow was 2007. Class A location property that used to get multiple offers over asking and all cash are now willing to negotiate and accept 20% down. This means these properties that were previously not accessible for me are now accessible. As a result, in this current environment, I would only offer on class A location real estate.

When conditions change, I'm sure my buy box will change. 


 

tj

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Re: RE opportunities near Los Angeles
« Reply #2 on: January 26, 2025, 12:46:38 PM »
California is not the best place to own renal property in, especially Los Angeles. My landlord has been trying to evict my neighbor for weeks, neighbor refuses to answer the door. Allegedly his next step is to get the cops involved. Dude's been living rent free for a while, as I understand it.

GilesMM

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Re: RE opportunities near Los Angeles
« Reply #3 on: January 26, 2025, 02:33:37 PM »
With rents going to the moon after the fires I guess some LA landlords are making a fortune at the moment.


I've also heard that short term rentals near Anaheim can be lucrative due to the year-round onslaught of theme park tourists.


I recently helped a friend look for small houses and condos in the $8000/mo range and the pickings were pretty slim. He ended up in a marginal area of Silver Lake.

Dicey

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Re: RE opportunities near Los Angeles
« Reply #4 on: January 31, 2025, 02:46:34 PM »
VTSAX or equivalent all the way, baby!

Signed,
SoCal Native and Landlord
« Last Edit: February 12, 2025, 02:04:48 PM by Dicey »

nancynartins123

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Re: RE opportunities near Los Angeles
« Reply #5 on: February 03, 2025, 11:17:23 AM »
Real estate near LA is tough for cash flow, but areas 30-50 miles out might have better potential. If you can pay cash, you avoid high interest rates, but capital gains tax is a factor. Have you considered REITs or short-term rentals near tourist hotspots like Anaheim?

SeattleCPA

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Re: RE opportunities near Los Angeles
« Reply #6 on: February 03, 2025, 05:08:37 PM »
Based on making this point to @Glendale in another thread, I did a blog post on how one can make short-term rentals work.

Here's a link: https://evergreensmallbusiness.com/short-term-rental-tax-tips-and-tricks/

And here's a TLDR summary: If you do a short-term rental--meaning your average rental interview is 7 days or less--you can generate enormous tax deductions. In effect, this becomes another way to save large amounts of money pre-tax. So some multiple of what you can save in a 401(k).

Glendale

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Re: RE opportunities near Los Angeles
« Reply #7 on: February 05, 2025, 11:58:52 AM »
Based on making this point to @Glendale in another thread, I did a blog post on how one can make short-term rentals work.

Here's a link: https://evergreensmallbusiness.com/short-term-rental-tax-tips-and-tricks/

And here's a TLDR summary: If you do a short-term rental--meaning your average rental interview is 7 days or less--you can generate enormous tax deductions. In effect, this becomes another way to save large amounts of money pre-tax. So some multiple of what you can save in a 401(k).

Super helpful - thanks!

ChpBstrd

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Re: RE opportunities near Los Angeles
« Reply #8 on: February 12, 2025, 11:06:16 AM »
Maybe the opportunity is to sell before the insurance market locks up and mortgages become unavailable?

If you need cash flow, I see lots of attractive bonds or preferred stocks yielding 5.5-6%. Seems a more direct way to buy cash flow than negative cash flowing RE.

 

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