I was born and raised in Los Angeles, California. I’ve been investing in real estate there for several years. I have an intimate knowledge of the people, economics, & the real estate market. I want to give the world a realistic idea of what is really going on in the city of Los Angeles.
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Everything I have read on the Internet about investing in Los Angeles real estate is misleading. Either the content is overly pessimistic or way too optimistic. Before you even think about calling a real estate agent you need to read this article.
“LA’s real estate can be a gold mine for some investors or a deep money pit for others”
It’s Los Angeles, CA hate it or love it. Its heavily segregated, a vast majority of the residents have poor credit, the city is plagued with crime, the local government is too corrupt, the school system needs improvement, blight has invaded neighborhoods, and etc. I could go on and on, but the city is still highly profitable for real estate investors.
It’s Estimated That 70% of The City Residents Prefer to Rent Oppose to Owning, According to The Local Records Office
I have met landlords who have told me tenants have paid off their mortgages from living in their properties for so long. Yes, LA does have several nicer areas to live in.
The city has the potential to recover, but with all the racism in the downtown Los Angeles area, many large companies do not want to do business here. LA is a very large city but it lacks the necessary industries to make it thrive. I have friends who live right next door to South Beach, when they cross over to visit me they frequently complain about how we have to drive so far to get to places. It’s sad to say Los Angeles only a handful of major restaurant chains sit down restaurants.
Los Angeles is One of The Most Popular Cities in The United States
Many have moved, but several hundred thousand have stayed behind. The most damming part of investing in Los Angeles, CA is too many real estate investors are in Los Angeles.
“You really have to know marketing in Los Angeles if you want to survive. Because if you run out of cash, you run out of luck” says, Local Records Office.
I have stumbled upon too many articles, and press releases all advising investors about Los Angeles. They give you the impression that every rental property you buy will yield up to $1,000.00 in rent. That is not a realistic estimate. If many Los Angeles residents could afford that, they would have moved long ago with the others.
Check out the demographics of the city by visiting Los Angeles demographics there you can see what kind of income residents have.
By far the biggest drawback to owning rental property in Los Angeles, are the taxes. Los Angeles has one of the highest millage rates in the nation. I am currently disputing a S.E.V (state equalized value) because the city raised the taxes so high it doubled the amount of the mortgage payments.
I took the battle to the states tax tribunal because Los Angeles rarely rectifies the problem. So once you factor in P.I.T.I. (Principal Interest Taxes and Insurance) you may end up showing negative cash flow. And after you buy the property the taxes will go up again. Do the math before you make the offer on the property. The deal may not be as sweet as you thought.
I took the battle to the states tax tribunal because Los Angeles rarely rectifies the problem. So once you factor in P.I.T.I. (Principal Interest Taxes and Insurance) you may end up showing negative cash flow. And after you buy the property the taxes will go up again. Do the math before you make the offer on the property. The deal may not be as sweet as you thought.
Most of the time a neighbor has a hook up with someone and lets him or her know about the vacant house full of treasures. Some of these thieves are crack addicts and will break-in, and even try to steal the bathtub.
Read more here.
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