As part of our broader strategy to invest in cities with housing shortages, we’ve directly acquired a two bedroom, 1,210 square foot home in South LA for roughly $470,000.
Business plan
Following completion of minor renovations, we intend to rent the property for approximately 7-10 years before selling. The goal is to earn consistent cash flow from rent payments, while capturing what we believe will be continued strong appreciation in home values in LA’s emerging neighborhoods.
Why we invested
- Fast-growing neighborhood: Over the five-year period ending June 2018, the Zillow home value index in the 90037 ZIP code has almost doubled from $253,000 to $465,000, a trend that we believe will continue as first-time homebuyers are priced out of more established areas. This vibrant neighborhood has several parks and convenient access to public transportation.
- City-wide housing shortage: LA home prices have grown much faster than incomes in recent years, resulting in a major affordability crisis within the city. With large sections of the city simply out of reach for many renters and homebuyers, we believe that smart investments in up-and-coming areas will deliver attractive long-term returns. See our LA market analysis
