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12-02-2012 03:38 AM - edited 12-02-2012 03:40 AM
Every time I put an offer at asking price, I have lost. What would be a good offer for this and is it a good buy - will be renting all three units
12-02-2012 07:55 AM
Seems like a terrible idea to me. Someone on a recent thread said that with respect to investment property, the mortgage should be no more than the annual rent times ten. If you subscribe to that formula, this property is way over priced for the rent it is currently collecting. Furthermore, this is Los Angeles and therefore subject to rent control, so you can't expect to collect higher rents any time soon even if you could get them.
12-02-2012 08:05 AM
Regardless of the purchase price, it appears (from the previous listing and the city planning website) that this property is legally permitted as two units and there is an unpermitted studio apartment on site. As a landlord in Los Angeles it is illegal to collect rent from a non-permitted apartment and if your tenants were to investigate further and find out that rules you may be required to refund all of the collected rent from that studio.
You can use the excellent tools on Redfin to learn about property conditions and legal uses from checking the previous listings and public records data at the bottom of the listing. In addition, you can use these tools from the City of Los Angeles to verify the property attributes, code compliance issues and complaints at the LAHD. Bookmark them if you are buying multi-family properties in Los Angeles.
Zimas City Planning (excellent compilation of city data) - http://zimas.lacity.org/
LAHD Code Compliance site - http://http://cris.lacity.org/cris/informationcent
For more background on the fees you might have to pay to 'relocate' your studio tenant see this article from 1999. Fees are double this amount now.
12-02-2012 08:10 AM
Your mortgage tax and insurance will be around 4K/mo. Your rental income will be about 4K/mo.
Add repairs and vacancies and you'll be losing money on this every month.
12-02-2012 11:34 AM - edited 12-02-2012 11:35 AM
The house has only one meter of every type. Are you going to let the renters to pay all utilities or you pay all. The former option means renters have to share the bills and there is a flight almost every month. End up nobody pays and utility companies have to send you (the property owner) the bills.
12-02-2012 02:22 PM
i haven't seen a single property that sold in the prices we're looking that sold for asking - they all (and i mean ALL) sold above asking 5% to 15% higher. the others didn't sell at all - they're over priced and sitting.
i wouldn't say it's a good buy, and making a reasonable offer doesn't mean that the owner will sell. my experience over the last few months is that those who price their properties too high aren't willing to accept a reasonable offer. we're the highest offer on a condo that's been sitting for over 50 days in an area where most accept an offer within 10, yet the owners are hoping for more than any similar condo has sold for in that area for years.
12-02-2012 09:54 PM
Thank you for replying to my post and for taking the time to valuable links that one needs but dose not know it exists. I really appreciate your input and everyone else on here.
12-02-2012 11:03 PM - edited 12-03-2012 11:50 PM
On a side note, that is a good location, and yes I agree it's overpriced. Seems like a loser if you consider the rental estimates. I believe the flipper may have paid too much considering the amount of work that the property needed. Now he's trying to make a HUGE profit. Even at 600K I don't think it would be profitable investment. Wow, people are greedy!