We’ve purchase a three bedroom home in the South Central neighborhood of Los Angeles, CA for roughly $457,000. This home is one of several we have acquired in South LA, where housing supply has not kept pace with the rapidly growing population.
Business plan
Following the completion of minor renovations, we aim to rent the property for seven to ten years before putting it on the market. 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
- Steps from transit: The property is less than a mile from the Jefferson / USC Station on the LA Metro’s Expo Line. The transit system connects South LA to Santa Monica and downtown, and is undergoing a major expansion in advance of the 2028 Summer Olympics.
- Fast-growing neighborhood: Over the five-year period ending May 2018, the Zillow home value index in the 90011 ZIP code has grown from $221,000 to $376,000, an increase of nearly 70%. We believe this trend will continue as prospective homebuyers are priced out of more established areas.
- 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.
