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Old 10-28-2014, 12:34 AM
 
822 posts, read 921,832 times
Reputation: 626

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Quote:
Originally Posted by jm1982 View Post
I agree, it can be a big windfall for people that decide to sell.

With the right investing mindset , these little bungalow homes in areas turned hip can translate into pretty big apartment buildings in other parts of the country.

I think Boyle Heights still has more room to grow in the crazy LA market..but there are tons of people im sure sitting on a lot of equity in places like Silverlake and Echo Park that could cash out pretty big.

600k plus invested the right way can make it so you don't have to work anymore . Of course not putting it in a Bank CD or something like that .

What happens at a certain point is that it doesn't make sense from a financial standpoint to keep a house , unless you think the growth will continue to be as strong as it has been.

As an example..this property is being sold for $250,000 . It's a mobile home park in Texas. BORING right?
Well not when you look at the cap rate/return.. 23% !
In L.A people are lucky to get even 4% cap rate/return .

You could trade one paid off dumpy little silverlake ,echo park,etc house worth $750k or so for 3 properties like this.. that would be 1 housing unit
turning into 72 UNITs .

The income would allow you to live anywhere you'd like pretty much.

If you wanted to rent out that 750k house what would it rent for ?.. Could you even get $4,000 in rent for it? and that's gross rent.

The texas units would be bringing in $28,728 in monthly income! ...and that should be $14,275 or so AFTER expenses.

Even if you make the argument that "Well it's L.A...it can go up more than Texas" it still doesn't make much sense to hold onto the property because is it really going to increase that much every year from these levels?

You would need to be getting like over $10,000 per MONTH in appreciation consistently for it to make sense.

Of course that COULD happen... but doesn't it seem like a much riskier bet?

Also these returns would be buying with cash..no leverage. If you put a downpayment instead , the returns would be even higher.

Also the San Antonio texas area isn't doing to bad economically ..their unemployment rate is 5%..L.A county is 8.5%
Thumbs up to your post. Savvy investor. BTW there are people raising funds to buy mobile home parks these days.
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Old 10-29-2014, 12:28 AM
 
Location: Los Angeles, CA (Native)
289 posts, read 371,208 times
Reputation: 127
Quote:
Originally Posted by Aldous9 View Post
I think the "Stop Gentrification" crowd is racist. It really means "stop white people from moving in and changing our culture." This is the same argument white nationalists make about immigration.
Actually, is more economic than anything else since L.A. is relatively economically segregated. I don't see how it's racist since I rarely see the rich and the poor (of all colors) mingle with each other. A good example is DTLA where the rich and poor rarely engage in a conversation.

So to be fair, maybe the so-called "Stop Gentrification" crowd you are pointing out have legitimate concerns on how their rents could rise to compete with the rapidly rising real estate costs in the surrounding area.

Investing in the redevelopment of decaying areas like portions of Pico Rivera is one thing, but when the developers see put dollar signs over it's current residents, that is a cause for concern.
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Old 10-29-2014, 12:32 AM
 
Location: Los Angeles, CA (Native)
289 posts, read 371,208 times
Reputation: 127
Quote:
Originally Posted by Gurbie View Post
The people of Boyle Heights aren't "Mexicans".

I hope Boyle Heights continues to reap the benefits of entrepreneurial money and artistic talent blossoming in the neighborhood. And I think it's great the community can maintain its ethnic identity at the same time.

I'd hate to see LA get the "Manhattan" treatment.
The majority of the population of Boyle Heights (which is geographically larger than most realize) is of Mexican or Mexican-American origin due to it's adjacency to East Los Angeles, which is almost all of Mexican-origin.
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Old 10-29-2014, 12:40 AM
 
822 posts, read 921,832 times
Reputation: 626
Quote:
Originally Posted by Moreau36 View Post
Actually, is more economic than anything else since L.A. is relatively economically segregated. I don't see how it's racist since I rarely see the rich and the poor (of all colors) mingle with each other. A good example is DTLA where the rich and poor rarely engage in a conversation.

So to be fair, maybe the so-called "Stop Gentrification" crowd you are pointing out have legitimate concerns on how their rents could rise to compete with the rapidly rising real estate costs in the surrounding area.

Investing in the redevelopment of decaying areas like portions of Pico Rivera is one thing, but when the developers see put dollar signs over it's current residents, that is a cause for concern.
It seems to be there are 2 DTLA's. One runs along Broadway and the other along Figueroa. They are two different worlds.
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Old 10-29-2014, 01:19 AM
 
Location: Los Angeles, CA (Native)
289 posts, read 371,208 times
Reputation: 127
Quote:
Originally Posted by BeatAngMoh View Post
It seems to be there are 2 DTLA's. One runs along Broadway and the other along Figueroa. They are two different worlds.
...and Broadway is slowly changing with the proposed streetcar encompassing the road. I think they going to have their bumps because some of the property owners on Broadway will refuse to give up their investment for upscale shops.

I am not against redevelopment. but it has to benefit the diverse demographic, especially economically.
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Old 10-29-2014, 12:08 PM
 
6 posts, read 5,903 times
Reputation: 22
Dtla is made up of a series of neighborhoods, Southpark, arts district, Broadway, bunker Hill, historic core, little Tokyo., etc. Each area has its own unique flavor, and they're all changing. I move out of dtla 5 Yrs ago to boyle heights. And I'm glad I did. Was able to get a great 2000 ft home with 7000 lot for 250. Now even a beat up 800ft place goes for more than that.
Boyle Heights although is way behind the gentrification trend it is really set to change. More than any other area on the Eastside investors are putting their money down on boyle heights. Between the Sears building, wyvernwood and the 6th St bridge there will probably be a few hundred million invested. I know many locals are fighting this because they don't want to be pushed out of their apartments but if you don't own and if you don't have $ to buy your place there not much that can be done to stop it. People who do own in the area are really looking forward to the changes, hopefully a lot of the gangs living in these overcrowded Apts will be pushed out, more investments will come in and our property valves will continue to rise. For those that have real investments in the area they tend to be pro gentrification, those who don't have $ invested but an emotional investment are more anti.
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Old 10-29-2014, 02:26 PM
 
Location: Los Angeles, CA (Native)
289 posts, read 371,208 times
Reputation: 127
Quote:
Originally Posted by elbatmanuel View Post
Dtla is made up of a series of neighborhoods, Southpark, arts district, Broadway, bunker Hill, historic core, little Tokyo., etc. Each area has its own unique flavor, and they're all changing. I move out of dtla 5 Yrs ago to boyle heights. And I'm glad I did. Was able to get a great 2000 ft home with 7000 lot for 250. Now even a beat up 800ft place goes for more than that.
Boyle Heights although is way behind the gentrification trend it is really set to change. More than any other area on the Eastside investors are putting their money down on boyle heights. Between the Sears building, wyvernwood and the 6th St bridge there will probably be a few hundred million invested. I know many locals are fighting this because they don't want to be pushed out of their apartments but if you don't own and if you don't have $ to buy your place there not much that can be done to stop it. People who do own in the area are really looking forward to the changes, hopefully a lot of the gangs living in these overcrowded Apts will be pushed out, more investments will come in and our property valves will continue to rise. For those that have real investments in the area they tend to be pro gentrification, those who don't have $ invested but an emotional investment are more anti.
As far as the gang issue is concerned, pushing them out, especially the Eastside gangs will be difficult due to the prison overcrowding (The Federal Government mandated the state to release so many prisoners due to this fact) and the fact that some of these gangs will not give up their "turf" easily. Anything else, these gangs will relocate elsewhere in the city or county.

CicLAvia and gentrification: Eastside expansion troubles some residents

Downtown L.A. was an easy transition because prior to the change, hardly anyone wanted to come downtown, but the Eastside will be a little harder due to the outcry you will receive from the local residents.

Like I mentioned before, the area of Boyle Heights adjacent to Downtown will likely be gentrified, but the rest of neighborhood (esp. near East L.A. or City Terrace), probably not. Redevelopment may happen in those areas, but not as the scale of Downtown L.A. IMO.
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Old 10-30-2014, 09:17 AM
 
Location: Riverside
4,088 posts, read 3,548,238 times
Reputation: 3073
Quote:
Originally Posted by Moreau36 View Post
The majority of the population of Boyle Heights (which is geographically larger than most realize) is of Mexican or Mexican-American origin due to it's adjacency to East Los Angeles, which is almost all of Mexican-origin.
Yeah... I know. But the poster referred to the people of BH as "Mexicans". Mexicans are residents of Mexico. The people living in BH are Americans.
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Old 10-30-2014, 10:38 AM
 
Location: Los Angeles (Native)
24,194 posts, read 13,703,254 times
Reputation: 11387
Quote:
Originally Posted by Moreau36 View Post
As far as the gang issue is concerned, pushing them out, especially the Eastside gangs will be difficult due to the prison overcrowding (The Federal Government mandated the state to release so many prisoners due to this fact) and the fact that some of these gangs will not give up their "turf" easily. Anything else, these gangs will relocate elsewhere in the city or county.

CicLAvia and gentrification: Eastside expansion troubles some residents

Downtown L.A. was an easy transition because prior to the change, hardly anyone wanted to come downtown, but the Eastside will be a little harder due to the outcry you will receive from the local residents.

Like I mentioned before, the area of Boyle Heights adjacent to Downtown will likely be gentrified, but the rest of neighborhood (esp. near East L.A. or City Terrace), probably not. Redevelopment may happen in those areas, but not as the scale of Downtown L.A. IMO.
Transition was also easier because of the fact that not that many people actually lived in DTLA, because it was mostly retail/commercial/office space.

That space was repurposed to become residential space - Nabisco Lofts, Toy Lofts,etc.

The people shopping in DTLA were mostly coming from the surrounding area (including Boyle Heights,East LA) rather than the areas being gentrified now.

Growing up I lived in Beverly Hills, but we would go shopping to the wholesale /toy district in DTLA. Not very many kids in my area went there I'm sure but I was glad for the experience.

It was fun and exciting being a young kid and seeing these all these boxes full of novelties that were shipped there from China. Watching the asian shop owners eating noodles and negotiate prices.

Of course now with the internet people can buy directly from China on Alibaba and other sites.

Anyways my point is that DTLA didnt have too much residential and it was mostly the homeless living there on Skid Row. I would remember my family paying homeless people to "watch" our car on the street.

Even back then though , there were a lot of people that would come to DTLA but it was to shop in the wholesale district, fashion, jewelry ,toy . I remember it being quite busy . Its just that they wouldnt go there to have fancy cocktails or gourmet food like they might now do.

I went to USC and I remember there being just a handful of places really that were decent and they were pretty much the chain places.

As far as the gangs, there is no doubt that gentrification pushes them out at least to some degree.

It makes sense too that the gentrification would be near DTLA (arts district) it could actually take a while for it to get further out.

I live in the north hollywood area and the arts district is hip, but in my part further north I'm not sure if I've seen a single hipster here after living here for 4 years.

I don't imagine the gentrification spreading because I am many miles away from it, and prices aren't that much more (in terms of rents ) right near NoHo arts.

The situation is different though in DTLA as Arts District rents seem sky high nowadays. So that combined with close proximity to Arts District makes it a no brainer.

The stuff in arts district looks to be around $600sq ft, while BH looks to be less than $300sq ft.
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Old 11-02-2014, 10:31 PM
 
Location: Pasadena, CA
363 posts, read 392,083 times
Reputation: 400
As a homeowner, I love gentrification, because it boosts my property's value. When I was a renter...not so much. In my experience, gentrification equaled higher rent.
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