“Life is either a daring adventure or nothing at all.” Helen Keller

In an article dated February 28, 2024, J.P. Morgan Chase has good things to say about the Los Angeles multi family market. They say that the Los Angeles market “is expected to gain more than 2200 new apartments in 2024.” They are looking at 28,612 units by 2026. They also expect the vacancy rate to stay steady with a vacancy rate change to 4.2% from 4.1% in 2023.

Matthew Krasinski, Managing Director and Senior Regional Manager for Commercial Term Lending at J.P. Morgan Chase said :“The continued lack of affordable housing options for Los Angeles residents, coupled with strong demand drivers, continue to bolster the overall strength of the LA multifamily market,” he said.

He also said ” The enduring strength of the LA economy will continue to have a positive effect on the LA housing market.”

SOUNDS LIKE GOOD NEWS SO WHY SELL? With concerns about the office and other commercial sectors nationwide, multi family seems like an oasis. Vacancy is low and even with rent control, our rental values are up and when we go to rent a vacant unit at market rate, there is excellent demand. But you have to ask yourself, is there a lot more upside to my units? Have I already fixed the problems that existed when I bought the building? Could I sell now with a good market and exchange into a new property that would give me additional upside? Maybe I could get more units, add ADU’s reconfigure existing units? Maybe I could create more additional value with a new property than I can with my current building.

SAVING THAT GREAT INTEREST RATE. Most multi family loans have a fixed rate for 5-7 years and then move to variable rate. Those that are fully amortized for 30 years, usually have other issues, like a huge prepayment penalty. If your apartment loan is going to move to variable rate, it may be a good time to consider selling. Instead of going through a refinance, you could then get a new loan on a new building, saving a lot of fees on your existing one.

TIME FOR A CHANGE? Maybe you are ready to move on to something different. Are you thinking of moving to another state and don’t want to be a long- distance manager? Have you decided to try a different type of investment, such as a triple net leased property with very limited management responsibilities? Have you decided to go into A Delaware Statutory Trust , which is a fully managed group investment. You may have decided that you are done investing and want to just move on with life. Always check with your CPA and your attorney before you make such a move to understand tax and legal consequences.

“The best motivation always comes from within.” Michael Johnson

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparables in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair

R= This is something that a lot of housing providers have not thought about or have decided to do later, but now may be a good time.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We always have many investors who are looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We have put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.