If you’re a first time multifamily investment buyer, getting a loan may seem like a daunting task. There are a lot of confusion regarding the different types of loans, rates, and terms for an apartment building. Here is a basic guide showing the difference between 2-4 units financing and 5+ units financing: 2-4 Units Apartment Building Financing: • Residential Loan • Down payments are usually 20-25% of the purchase price for a conventional loan if not owner occupied. Down payment may be less if owner occupied and depending on the type of loan. • Currently, interest rates range between 3.5 – 5% • Typically most borrowers opt for the 30 year fixed loan terms. However, there ar

Currently, there doesn’t seem to be a real estate bubble. Speculation of an interest rate hike has been halted yet again during a press conference earlier this week with Fed Chair Janet Yellen. The Fed continues to push forward their agenda to not raise interest rates due to the volatility of the recovering economy. According to Yellen, there is a possibility of a slight interest rate increase later this year. The interest rates will increase at a constant pace in the coming years. With interest rates remaining low, it looks like the real estate market will continue growing for at least the next 18 months. This will drive real estate to peak prices. Even at such high prices, many investors a

Los Angeles, one of the largest cities in the world, has one of the most congested roads and non-functional metro system. The continual population growth forces the city of Los Angeles to make an effort to expand the metro system. With a budget increase of nearly $120 million dollars, the city of Los Angeles released an extensive 81 page metro expansion report, showcasing all the planned projects for the next 40 years. So far, the Metrolink is working on the Regional Connector Transit Project and the Metro Crenshaw/LAX Line. Here are the projects at a glimpse: Regional Connector Transit Project This project is a 1.9-mile underground light-rail system connecting the Metro Gold Line to the 7th

As rent control gets tighter in Los Angeles, landlords have been looking for other ways to keep afloat. The Ellis Act has given landlords some room to get out of the rent control situation; however, it has become highly criticized as developers increasingly abuse the law to mass-evict tenants in cities such as Santa Monica where property value is high. The Ellis Act is a California provisions that gives landlords the right to evict tenants if the landlord plans on demolishing or permanently withdrawing the units from the rental housing market. The Los Angeles Housing and Community Investment Department (HCIDLA) outlines the provisions to withdraw units from rental housing use. The problem no

Rent control has become a hot topic in the last several months, especially in Los Angeles where rent control is widely enforced. To put in simpler terms, rent control is a law that limits the yearly increase of rent charged to a tenant in cities that have housing shortages. In Los Angeles, in particular, most apartment buildings built before October 1, 1978 are subject to a 3% yearly rent increase cap. Currently, there is debate on appealing the Costa-Hawkins Rental Housing Act, which was put in place in 1995 to ensure no rent control on apartment buildings built after 1995, single family homes, and condominiums. It further ensures the deregulation of rents after a tenant moves voluntarily,

Prices are high, it's a great time to sell your property. But what about your tax ramifications? Here are few solutions to help defer yo

When buying or selling real estate, especially an apartment building, be sure to check the Certificate of Occupancy to make sure the property is legal and in compliance to all laws and regulations. If not, there may be a hefty price to pay in terms of fines and legal headaches. Here’s why the Certificate of Occupancy is so important. What is a certificate of occupancy? A certificate of occupancy is a document issued by a local government agency or building department. It certifies that a building is in compliance with all applicable building codes and laws. It usual indicates that the condition of the property is suitable for occupancy. Why get a certificate of occupancy? Generally, most peo

Many apartment buildings are not living up to their income potential, making it difficult to sell at the highest price. The next time you’re thinking of selling your apartment building, consider the few things listed below to ensure that you can increase the value of your apartment property. 1) Increase rental rates once a year to increase the value of the property. 2) If mastered metered, install separate electric and gas meters per apartment to minimize operating costs. 3) Acquire buildings within the same geographical region to consolidate like services to achieve efficiency, such as utilizing the same maintenance crew or gardener. 4) Inspect interior of property every four mo

Real estate has always been highly regarded as one of the avenues to increase wealth. Purchasing apartment buildings has been a great way to increase your cash flow and create tax write-offs. If you’re looking for ways to increase your wealth, here is a step-by-step guide on how to use real estate to your advantage. Step #1: Create a Model to Determine Cash Flow First, you will need to create a model to project the cash flow over the life of your property. You will consider the income relative to the expenses that the property incurs. For income, you should consider rental income while accounting for vacancies and delinquencies. Expenses should include property management fees (if applicable

Should I invest near USC? I have received many questions about clients looking to invest near the University of Southern California (USC) and here’s why maybe you should. The area surrounding USC has already attracted many investors in the last few years. Located relatively close to Downtown Los Angeles, a hub of development activity, the USC area boast extensive and popular developments such as the University Village, the LAFC soccer stadium, and the George Lucas Museum. In fact, the development trend started with the introduction of the University Village, a cluster of residential and retail complexes that cost approximately $700 million. This complex is set to open at the end of 2017. The