SenorFish wrote:
First of all, you can't buy investment property with FHA unless you plan to move in and become part of "that demographic". So plan on minimum 25% downpayment for investments of this sort.
Second, your cash for keys idea is regulated by LAHD rent control laws... $7000 for a short term single male tenant, or up to $19,000 for a long term elderly family with kids. And that is only the cost for you to move in to one unit and become part of "that demographic". You cannot legally clear the place out by offering them donuts on the front lawn and then changing the locks while they're out front.
Third the projected rents in that listing are total dreamland.
Fourth, I would never bailout some speculator investor who bought the place for $295k 17 months ago and now wants $464k. I want to retire to a private island too, not pay some other guys plane ticket.
I would agree with all of these comments (although I haven't checked recently to see what the Rent Stabilization Ordinance fees are to displace a tenant to allow the owner, etc. to move in).
There is absolutely no way that the $2,100 in "projected" rent is realistic. The $1,500 may not be too far off if it is rented under Section 8. But $2,100? No way.
The fact that the original poster was not aware of the Rent Stabilization Ordinance and the limits of what you can do to get tenants out of a rent controlled unit tells me that the OP has not done nearly enough research to even be contemplating buying such an expensive property.
I would never buy a rent-controlled property. Further, I would never buy a property that included 1 BR units. One bedroom units give you a very limited market of renters, and if you have to evict them for not paying rent, the court costs are high relative to the rent involved. It's just not worth the headaches.
Also, the estimated values for this property on Zillow and eppraisal--not to say that they are accurate--are far lower than the list price. And the fact that the owner bought it for under $300K is another negative.
I would not by this property under any circumstances.
