What this letter is and isn't all about.
It isn’t about asking if you want to sell your home.
It is an explanation of how to make a bundle of money investing in real estate. And it is right in your “back yard” if you live in the South Bay of L. A. County. Have you noticed that about half of all South Bay residents are renters? That means half of all properties are owned by investors. It is also interesting that many investors live in other parts of California and other states. Why do so many investors buy properties in the South Bay? Here are a few reasons:
- Their investments are safer than in most other areas. That means property values continue to appreciate more and steadier than in any other part of California. In fact, it is hard to find an area in the U.S. with a more impressive record of property value appreciation. Of course, some South Bay cities have better appreciation records than other South Bay cities. But overall, there isn’t a better real estate investment area. Basically, the high appreciation rate is because of the desirability of the area and scarcity of buildable land. Generally, the closer to the ocean the higher the GRM (gross rent multiplier) and the lower the cap rate. That means the properties are more expensive and the rent is higher. But in most cases, the rent isn't high enough to offset the cost of the property. At the other end of the spectrum are lower-priced properties where the rent rates are high enough to have a positive cash flow. However, properties in those cities are often old with a lot of deferred maintenance, neighborhoods are run down, appreciation rates are minimal, so they aren’t as safe an investment as are properties further west. So what are the best areas to invest? Cities in the middle of the spectrum, like parts of Carson, Gardena, Harbor City, Hawthorne, Lawndale, Lomita, Torrance, and North Redondo Beach. In these cities the GRMs are about in the middle -- not too low or high. However, there are exceptions. Occasionally, apartment buildings in the heart of downtown Manhattan and Hermosa, and in South Redondo Beach come up for sale. The GRMs are not too impressive, but the chances of property values substantially increasing are good.
- Homeowners and renters are attracted to the South Bay for these reasons: 1) The best and most comfortable weather in the U.S. All year around sunny and warm weather, low humidity, ocean-swept clean air. 2) Close to the Pacific Ocean and beautiful beaches. 3) Near The Strand which is part of the 22-mile long South Bay Bike Trail. 4) Near LAX. 5) Near many attractions. 6) Safe from natural disasters. Unlike Malibu and the Orange County coastal cities, there are no mudslides, floods, trembles, or liquefaction. It's like this area is protected by nature.
- A continual strong rental market. Rentals are almost always in greater demand than supply, which is why rates continue to increase. Real estate investment properties come in all sizes – single family residences (SFRs), condos, townhouses, duplexes, triplexes, 4-plexes, larger multi-units, apartment buildings, and office buildings.
I know where the best deals are in any price range, and I know all neighborhoods, property values, inventory, and which cities are best to invest in and to stay away from. (I will explain which investments generate the most income, and which are the safest). I also know how to handle tax-deferred 1031 exchanges. Mostly, however, I know how to provide exemplary service to my clients, and to look out for their interests 100%.
It is common knowledge that most super-rich people became super-wealthy through real estate. "The best investment on Earth is earth."
Two tips for first-time real estate investors: Unless you have a ton of extra cash, begin with SFRs. They are the most liquid (in case you ever need or want to sell fast). Avoid condos and townhouses because dealing with HOAs are often troublesome.
I will help you reach your financial goals, and your questions are very welcome. Contact me via email, phone, or text.
Flavia Brown, Realtor®
CA DRE #01729313
Realty One Group United
310-702-6335 (assistant – cellular/text)
P.S.My website contains a lot of real estate information. Click on "More" near the top of this page, then scroll down to various subjects.