Monday, April 15, 2013

Mini-Case Study #2: 827 E Edgeware Road 90026 - Purchase of a Fourplex in the Up-And-Coming Downtown Los Angeles-Adjacent Neighborhood of Angelino Heights

Adner Realty Group is pleased to announce the closing of 827 E Edgeware Road, a fourplex in the Angelino Heights neighborhood of Echo Park, in the shadow of Downtown Los Angeles.

The sale closed on April 11, 2013 with a list price of $890,000 and a final contract price of $970,000.  Adner Realty Group represented the Buyer.

The building is comprised of four 1 bedroom, 1 bath units, each measuring approximate 1,000 sq ft.  The lot is 4,064 sq ft.  There is no on-site parking.

Two units were delivered vacant.  Two units had legacy tenants with rents approximately 30% below market.  Total monthly income is estimated at $87,000/year or 11.1 GRM.  (Income and expense information was not available at the time of sale to determine the cap rate.) 

Fully occupied, rents average approximately $1.79/sq ft/month.

A few takeaways from this sale:

  1. Location, location, location - We are bullish on Angelino Heights / Echo Park, and we think that the housing stock of period buildings, proximity to Downtown Los Angeles, and high quality tenants who gravitate here make this neighborhood one of our top three target areas for investment in Los Angeles.
  2. The multifamily market is highly competitive - and Buyers who desire quality properties must bid aggressively to get them.  Our client went nearly 10% above the asking price to acquire this prime asset.
  3. Expect multiple offers when submitting offers - in this competitive market, lowball offers are dead in the water.  (This property received multiple offers the first day it was on the market.) Calibrate your bid to where you think the market is, and don't hesitate to offer above the asking price.
  4. Your agent is your key to sealing the deal - The value of your agent is their ability to uncover quality properties, analyze and interpret market signs, negotiate your deal, and ultimately vanquish competitors.   Choose your agent wisely.

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