Moving to Boyle Heights... Streets to Avoid? (Los Angeles, East Los Angeles: real estate, rental)

[LAart]

Hello All!

The wife and I are writers, the type that do what we love but see little cash flow. Anyways, we've been saving up for almost 15 years, and we're looking to finally own a property. We have rented with roommates in Highland Park for 8 years, and we absolutely love the area. However, the recent hipster spike has driven prices up considerably, and the vibe of the neighborhood has nosedived to the boring (in our opinions).

Over the years, we've spent a lot of time walking around the Boyle Heights area, and we love the beautiful old architecture and the neighborhood's vibe. Importantly, for us, the home prices are also shockingly low. We've seen changes in the hood over our years of visiting, and it generally feels safer now than it once did. We dig the food, the little bodegas, fresh produce, and surprisingly ample greenery of the area. Transportation options are also great.

Now I've looked at the crime maps, and I know there is still plenty of gang activity in the area, but I grew up and have always lived in neighborhoods with gang activity. I know what it means to mind my business, and I know that in cities like LA, especially in the good parts (per my tastes), there is always a slight risk when walking the streets. I also know that things like this often go on a street by street basis.

All of that said, we are set on settling down in this beautiful neighborhood, and I was hoping to find some thoughts on safe areas/streets in Boyle Heights. Are there pockets/streets to avoid looking at real estate? We don't have any children, and they don't seem likely in the foreseeable future. Any recommended stretches/streets for "relative" safety?

Thanks in advance!

[hjt123]

the hazard/city terrace area is still pretty bad which is unfortunate because it's got beautiful views

cesar chavez and 1st are the most gentrified and always seems to have a lot of pedestrians. i feel like the area is going to pop off huge in the next 5 years especially centered around the gold line stops/bike lanes on 1st and on cesar chavez b/c it's tree lined and shaded w/ a lot of small retail spaces so congrats on being ahead of the curve. you have the honor of being able to complain in a few years about how your corner taqueria is now a yoga studio

[buzzkillb]

Seems like being closer to Mariachia Plaza and Gold Line stations would be the place to look. Houses still seem reasonable in that part of town. Not sure if that area will really gentrify, but I can't imagine it getting worse since its so close to Downtown.

[LAart]

Thanks for the responses. I will keep that in mind. Near the Gold Line stations would definitely be a plus. A view would also be a plus, but we're willing to sacrifice that for a bit more piece of mind.

I don't mind if the area picks up, cleans up, and progresses. We had some hopes for Highland Park when the Avenues Gang started to quiet down a few years ago and other folks started moving into the area. Diversification is a plus in my book. The issue has become the cookie cutter transformation into just another "hip" strip, with tortuously overpriced bars, record shops, coffee shops, and restaurants. I don't mind any of those four things, but of course when they exist to price out current residents, it riles up some emotions. I liked the middle class vibe, but it is disappearing behind a waft of trend. And hell, there are some good spots that have opened, but the strip on York could almost be confused with a strip in Echo Park or Silverlake at this point. Why not be just a bit different? Accept some of the local atmosphere while moving forward. There have long been some pretty rad art spaces in HLP, but those are starting to be overshadowed by higher priced, albeit fancier spaces. We're thankful that the heart of Figueroa has remained mostly untouched so far, but it will likely be the next to go.

HLP is still one of my favorite places in LA, and will likely remain so, and I totally dig Silverlake and Echo Park and Los Feliz, etc. I wouldn't begrudge anyone who wants to live in those areas. I suppose our hope, though it might be a shot in the dark, is that if there is progressive development in Boyle Heights, it will still preserve its charm. Cash flow into an area can be a positive thing, and it seems inevitable with the revitalization of DTLA spreading beyond the confines of its highway borders that BH will receive higher attention. I suppose even just us moving there is indicative of something.

I think what it really might come down to are the flippers. They've done some awfully shoddy stuff in HLP for the sake of quick buck.

[Joe Van Fossen]

I've been helping an investor find rental income properties in the area recently--duplexes, etc. I noticed there really isn't much to choose from on the residential side there. The inventory is really tight, but there are a few homes within walking distance to the metro stations, including one near Mariachi Plaza. Though I don't think they have much in the way of views. The homes in the area definitely have some character and historic charm.

[jm1982]

Originally Posted by Joe Van Fossen

I've been helping an investor find rental income properties in the area recently--duplexes, etc. I noticed there really isn't much to choose from on the residential side there. The inventory is really tight, but there are a few homes within walking distance to the metro stations, including one near Mariachi Plaza. Though I don't think they have much in the way of views. The homes in the area definitely have some character and historic charm.

Is there really anything that is actually cashflow positive when you take ALL expenses into account?

[Joe Van Fossen]

Originally Posted by jm1982

Is there really anything that is actually cashflow positive when you take ALL expenses into account?

Yeah, there actually are some opportunities out there--some that already come with long term tenants. Especially if you're somewhat handy and are going to manage the properties yourself, but even if you're not.

[jm1982]

The issue with the long term tenants is the rents are usually way below market value ,and rent control guarantees that you will be getting low rents for many years into the future or forever.

For example this property. They are asking $275k , ($155sq ft) , the rents are $1800 total..that might not not even be way below market for the area.

The payment alone with just property taxes would be about $1514/mo on a 30yr fixed..that doesn't include any costs for maintenance, repairs, any utilities,

That's not a property that cash flows. And that's one of the lowest priced properties per sq ft in the area.

Maybe it's ok if you don't care about cash flowing and are speculating on appreciation sometime in the future.

When you start doing the math on these properties and take into account all expenses, they just don't pencil out unfortunately.

This is another one here that is only $113/sq ft ...but you'd be losing money every month just paying the mortgage and taxes...they are advertising it as Upside of 15.5% return...but it's 100% occupied.

Unless you know of a way to kick out all the existing tenants you'd be losing money with it.

Current rents are between $650-850/mo .

[Joe Van Fossen]

One of the duplexes we looked at has two tenants currently paying $1300/mo a piece ($2600/mo total). The property is listed at about $350K, but has been on the market for a couple of months (likely negotiable). There are also several that are vacant and could potentially generate more once you get tenants in there.

[jm1982]

Yeah, still not the best return when comparing to properties out of state for example..but not too bad for L.A I guess.

Also if someone is buying a 2-4unit they have the option of getting an FHA loan and getting in w/ low downpayment , getting $1300/mo in rent could help to pay the mortgage and expenses..and it seems likely there will be appreciation in the future.

I think more and more people will be looking at Boyle Heights...I have been thinking this for years.

Looks like lots of flipping from people that bought in 2012 or earlier...this one they bought for $170k Oct 2012.. and now trynig to sell for $329k...

1822 East 3RD St, East Los Angeles, CA 90033 | MLS# 12176965 | Redfin
That was really the time to buy. It's crazy how many people are selling or trying to sell for nearly double that bought just one year ago.

This is another one bought much cheaper in 2012 for $239k now asking $399k
331 CORNWELL St, Los Angeles, CA 90033 | MLS# CV13141774 | Redfin