Tag: Apartments

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Buying a Home in LA – What Kind of Home Can I Buy?

So you’re ready to buy a home in Los Angeles. After many months of searching and saving enough money to afford the house of your dreams, you are finally ready.  

That’s good and all, but have you thought about the kind of property that you want to buy?  

With LA being a sprawling megapolis with many different types of properties, it is very easy to get confused as to what kind of home you’d like to live in. With that case in mind, let’s help you get that dream house of yours. 

Checking your Budget 

You’ve already established your need to buy a house. But since we’re going to decide on the kind of house that is right for you, you’ll need to rethink your budget once again. Also, buying a house in LA is no laughing matter. The city is notorious for selling the most expensive property known to man. 

In fact, LA County’s median price was 650,000 for a single-family home while a condo would fetch up to $530,000. These prices are from November of 2020, so you can just imagine how much it’d cost people to buy homes in Los Angeles now.  

Keep in mind that this is not to threaten you into buying a home in Los Angeles. This is simply to educate and to give people a good perspective on how much preparation and money you need to prepare for in buying a home in Los Angeles. 

What Kind of Homes can I Buy in LA? 

Once you’ve already determined and prepared your budget, it’s time to have a look at the kind of homes that you can buy in Los Angeles: 

Duplexes/Triplexes – A property with more than one self-contained unit, this house usually has its own kitchen and bathroom. These houses are often quick to disappear since they are always snapped at once by investors. However, these homes are good options for buyers who want to buy homes with an extended family in mind. This property is also a good option for those who want to take on a renter who can help pay for the mortgage. 

Single-family Homes – The classic American-style house that just sits there on its own in its own plot of land. There’s also the option of adding a white picket fence and a pool. Of course, those are sold separately! 

Condos – Now we come to the more luxurious type of home. The condo is basically an apartment that you can buy. Unlike the single-family homes, the condo building and the land beneath where it stands are co-owned by everyone who each bought a unit. The amenities and upkeep of the condo are paid for by a homeowner’s association, which is funded through monthly fees paid by the residents of the condo. 

Townhomes – Townhomes are often attached to neighboring units. These houses offer the space and feel of a single-family home, but they function more like condos. Residents share the ownership of the land around the homes while paying for the monthly homeowner dues. 

Small-lot homes – A unique type of home that can only be seen in LA, the small-lot home look like townhouses from a distance, but they are actually more similar in function with the single-family home. The unit in small-lot homes do not touch and each unit sits on a tiny piece of land. In fact, the land is barely any larger than the small-lot home unit itself! 

Co-ops – Co-ops are still around in LA, but not nearly as much compared in other cities, like New York. These units are similar to condos, except that buyers don’t technically own their units. Instead, what the buyers own are shares in an association that are run by a very powerful board that often vets potential residents. 

Vacant Lots – Finally, you have vacant lots. It is possible to buy land and then build your very own house in Los Angeles, but there are rules and permits that you have to check and follow. Also, the process of building your own house can be very costly.  

Whatever kind of home you’ve decided to buy, always remember to check with an engineer on local building codes. If you’ve decided to get a co-op, a townhouse, or a condo, check in with your local homeowner’s association for more information and for help regarding issues with your unit.  

As for those who managed to buy a single-family home or vacant lot, always make sure to check on building permits and regulations before you start with any construction to avoid issues. 

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Steven Taylor Taylor Equities on 3 Different Ways of Investing in Apartment Complexes

Steven Taylor Taylor Equities on 3 Different Ways to Invest in Apartment Complexes
Steven Taylor Taylor Equities on 3 Different Ways of Investing in Apartment Complexes

Investing in multi-family units can be a fantastic way to add to your portfolio and earn passive income.  According to Steven Taylor Taylor Equities, there are many different ways to invest in apartment complexes. The strategy you use will depend on your desired level of involvement, your available capital, and other factors.

Here are 4 different ways of investing in apartment complexes:

1. Purchase units yourself.

The first way of investing in apartment complexes is the most simple – buy the building yourself. This would require extensive upfront capital. For many, this method might sound impossible. You would need to do extensive research and the responsibility of the deal would fall on you alone. In order to purchase multi-family units on your own, you would need to first save the proper amount of funds, and come up with a clear picture of your budget. Research the market and examine different deals. You may choose to take out a loan. This method requires you to later find property management and other decisions in regards to handling the property.

Purchasing on your own requires more work, but also has many benefits. As the sole owner, you get to choose your investment strategy, how you would like to run your property, and when you would like to sell.

2. Purchase with a partner. 

For many new real estate investors, it is easier to purchase for the first time with a partner. If you don’t have all of the funds you need to get started, partnering up with someone you trust can be a great way to pool capital. Another advantage of buying with a partner is that you can learn and grow in your strategy together. Having someone to discuss a deal with can be valuable. 

The negative aspect of purchasing with a partner is that you will not get to make decisions on your own. For this reason, I only recommend going into business with a partner if you are someone who can handle compromise. Before you get in too deep, make sure you are on the same page about your strategy, vision for the building, and what you are hoping to achieve. Document everything, and get anything important in writing. Working with the right partner can be a rewarding experience, but communication is key.

3. Purchase by Syndication

A syndication is a group pool of funds used to purchase a property, usually run by one person (the syndicator). In this case, the syndicator, or general partner, is running the investment. As an investor, or limited partner, you would be joining in to purchase a small stake of the property. Usually, general partners make decisions, run the property, and follow their own strategy. As a limited partner, you are a passive investor. But, you still collect a share of the profit when the property is sold. This option can be a good way to invest in apartment complexes without spending a lot of time or getting extensively involved.

There are many other ways to invest in apartment complexes, but these three options are some of the most common ways to get started. If you’re interested in learning more about how to invest in multi-family real estate, consult a professional or mentor like Steven Taylor Taylor Equities.

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3 Uncertain Conditions that Impact a Landlord and Apartment Building Investments

Landlord Steven Taylor, Taylor Equities Apartment Photo
Landlord Steven Taylor, Taylor Equities Apartment Photo

Multi-family properties can be a great investment. But, if you’re considering being a landlord and investing in an apartment building, it is essential to first evaluate the local market. Some influences are fixed, but multi-family real estate is affected by many changing circumstances. These factors can evolve over time. Responsible investors need to be aware of the changing conditions that can impact their properties. Before buying an apartment building, build and understanding of the uncertain factors that can affect your investments.

Shifting Demographics

A changing population can significantly affect your investment. If you are a landlord, depending on income from renters, an increase or decrease in a population can easily influence your success. Age, income level, race, and gender can all be relevant factors to the profit of your investment. If an area is growing, the demand will grow as well and you are likely to see higher occupancy rates. If a circumstance or trend causes the population to migrate away from your building’s area, your property could sit vacantly. It is notably important to consider the factors that affect an area’s demographics before investing in a property.

Fluctuating Job Markets

The economic conditions of an area play a large role in decision making for multifamily investing. The health of the economy in an area will impact the demand for rental properties. If new jobs are created in a region, people will consequentially move to the area to fill those positions. Many new employees would often rather rent from a convenient and local multi-family property than buy their own home and commute to work.

A downturn in the economy can also affect a landlord’s apartment housing investment. When unemployment rises, homeowners often look for more affordable places to live, and many switch to renting an apartment. When the job market fluctuates, your investment could as well.

Landlord Changes in Access

It may seem obvious, but it is essential to pay close attention to the geographic location of your investment. In an era of climate change, our world is ever-changing, and the physical location is playing a more significant role than ever in housing choices. Renters want to live in a location with good weather, safe conditions, and access to the things they need. Before becoming a landlord and investing, look at the history of properties in the area. Have they been affected by any natural disasters? Do they experience an influx of population during certain seasons? Is the area becoming more or less convenient? Locations all have their strengths and weaknesses that will affect your real estate investment. Don’t skimp on the research. When purchasing a multi-family building, consider all the factors to make sure you are in the right place.

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4 Factors to Keep in Mind When Investing in Apartment Complexes

Apartment Steven Taylor Taylor Equities
Apartment Steven Taylor Taylor Equities

When considering investing in anything, according to Steven Taylor of Taylor Equities , the question you should always ask is: Why is this a good deal? A good deal isn’t just about numbers – a good deal has a compelling story and makes sense. Is the property mismanaged? Stressed? Under foreclosure? The facts should tell a story that explains why the property has value. Developing the instinct to recognize a good deal takes time, but with research, study, and experience you can learn to find the right investments.

Here are four factors to keep in mind when investing in apartment complexes.

1. Cash Flow

The probability of cash flow is a crucial factor to consider. It is important to evaluate how the property will generate cash flow in comparison to other potential properties. To start, ask yourself these questions:

  • What is the strength of the rental market in the area?
  • What type of market you are buying into (For example, C class buildings often have higher rates of tenant turnover. They can also call for more maintenance and repairs.)
  • Financing (How much money are you putting down? What is the interest rate? What type of loan?)

2. Equity

The next thing to consider is if the apartment complex you are purchasing holds equity. If the property doesn’t have equity, can you create it?  Equity in a property can take many forms. A few to look for are:

  • Discounted listing price
  • Foreclosure
  • Upside potential (Fixer-upper)
  • Poor management
  • Opportunity for rezoning

While there are ways to create equity, you are better off buying into it. Be on the lookout for motivated sellers who want out of their property – they are often willing to give up the building’s equity for less.

3. Appreciation

Purchasing in the right location and during the right time will result in profit and appreciation. But, evaluating timing can be tricky. The real estate cycle is often very uncertain. Therefore, if you purchase an apartment complex without the certainty of cash flow or equity, with the goal of short-term appreciation, you will be taking on a risky investment.

Often, aiming for moderate or long-term appreciation will be a safer bet. Study neighborhood and city trends over the long term to choose areas that hold their value and grow at a steady rate.

4. Risk

Those investing in apartment complexes often neglect to consider risk. Regardless of the amount of research you do, risk will always be a factor. Even if you have considered all the factors, you presumptions can be incorrect.

Have a backup plan for risk. If you are buying a building for appreciation, and the apartment complex does not appreciate, can you instead gain positive cash flow through renting units? If you have vacancies in some of your units, will you be able to balance the negative cash flow?  When investing in apartment complexes, you should expect a positive outcome, but always be prepared for your plan to take a turn. Real estate investment in a risky business, and if you want to play the game, you have to be ready to pivot when things go wrong. But, when things go right, investing in apartment complexes can be an exciting and rewarding endeavor. Steven Taylor Taylor Equities