Apartments for Cheap

Questions and Answers

Your Questions About Low Rent Housing In Los Angeles

January 9, 2013

Maria asks…

Can I make money buying then renting real estate (duplex) like this? Is there a better way?

I know very little about real estate. However, I do know property management.
This is my current situation: I rent a 3 bedroom house for $3150. However I have roommates and only have to pay 500 (share room w/ bf also, but I don’t depend on that.). All of the financial responsibility is on me, since the lease is in my name, and I have done this successfully for over 3 years. (Note: I live in Los Angeles.)
I’d rather buy than rent, and build up equity. I have a friend that can get me a very low interest loan. If I buy a duplex or triplex, and rent out the other units as well as any spare bedrooms, would I be most likely be making a monthly return?
Also, is it ridiculous to consider building a guest house in the back yard (if there is one) to have another unit to rent out, or is the cost too high?
If I have a loan is it absolutely necessary to have a big down payment, and if so, what would be the required on a $700,000 property?


Administrator answers:

The first thing I would look at is would the rents (even if you didn’t live there) support the mortgage? It is likely that you are going to have to come out of pocket significantly on a $700,000 property for a period of time.

Would it make a great investment? Absolutely! But would you die on the way to the banquet? Only you know. You don’t want to buy a place and have no buffer. What would happen if the place was vacant for a couple of months? Would you be able to afford the payments?

So…grasshopper. My recommendation is to purchase a larger house vs a multi family unit. Then rent out the rooms.

There is a tradeoff of privacy, but the risk is lessened. At some point, you could keep that house and buy another for you to live in, trade up to a multi unit or just let others pay your mortgage and continue the same relationship of roommates.

Hope that helps.

Steven asks…

Should we feel sorry for this family because of “their” bad choices?

The American Dream turns into a debtor’s nightmare
A sad, but common, tale starts with alleged predatory lending, intensifies with impossibly high payments and usually ends in foreclosure.
By Jennifer Delson and and Christopher Goffard, Los Angeles Times Staff Writers
October 8, 2007
Soledad Aviles dreamed for years of owning a home, with a plot of land where he could grow corn and chiles as he did in his native Mexico. So he felt blessed last year when he learned he could buy a three-bedroom, single-story stucco house on West La Verne Avenue in Santa Ana.

Referred to a local loan broker by a trusted friend, he borrowed the entire purchase price of $615,000 from Washington Mutual at a high interest rate typical of sub-prime loans. The monthly payment, as he says he understood it, would be $3,600 — steep for a glass cutter who made $9 an hour — but Aviles counted on his wife and three of his six daughters, who also worked low-paying jobs, to contribute.
“We took out our pencils, figured out our take-home pay and figured out that if we all pitched in, it would work,” said Aviles, 54, a stoop-shouldered, soft-spoken man with a sixth-grade education from Mexico.

Relying on the broker’s word, he signed loan documents written in English, a language he neither speaks nor reads, Aviles said. He was shocked to learn afterward that the monthly payment would not be $3,600, but $4,800 — a price that forced him to rent out bedrooms, the garage and an enclosed porch while he and his wife slept on the couch. He fed his family with food from friends and corn he grew.

Aviles says he was not aware that the February 2006 loan application he signed dramatically exaggerated his family’s income. The application lists him as the owner of a landscaping business with a $7,400 monthly income. His 27-year-old daughter Marlene, who earns $9 an hour in a noodle factory, appears as the owner of a housecleaning company who makes $5,700 a month. The application lists their yearly income as $157,000, when, according to Aviles, it was really closer to $60,000.

Now, five months behind on his payments, Aviles is scrambling to sell the house before the bank forecloses. Desperately ill from kidney disease and unable to work for the last year, he sits dejectedly at the dining room table, wondering when the bank will kick him out.

Aviles’ situation is hardly unique. Add his name to the ever-expanding list of casualties in the nationwide sub-prime mortgage debacle, his experience echoing that of thousands who bought homes in recent years only to find themselves in a sagging market saddled with payments they cannot make.

But amid the storm of foreclosures, his story illustrates the special vulnerabilities of first-generation immigrants in places like predominantly Latino Santa Ana, where city leaders have identified about 800 sub-prime borrowers facing the potential loss of their homes.

“We think this is just the tip of the iceberg, in terms of the breadth and depth,” said Steve Harding, Santa Ana’s deputy city manager. Apart from the language barrier, he said, many first-generation immigrants might have been especially vulnerable to sub-prime lending because they avoided checking accounts and credit cards, which prevented them from qualifying for regular loans.

The city has teamed with the Fair Housing Council of Orange County to offer free foreclosure prevention workshops, hoping to teach people to avoid predatory lenders and find help as they face the loss of their homes.

The Fair Housing Council said the number of people seeking help over mortgage woes, many of them Latinos living in Anaheim and Santa Ana, has soared. The group typically receives 15 to 20 complaints annually, but in September of this year the group received more than 20. The state Department of Real Estate, nonprofits and the Mexican consulate also have reported a rise in mortgage complaints, many of them from homeowners saying they signed documents they didn’t understand.

Across the state, many cases are landing in court. Kerstin Arusha, a directing attorney at the nonprofit Law Foundation of Silicon Valley, said that Spanish speakers, along with the elderly, “seem to be hardest hit by both sub-prime lending and predatory lending. There are many borrowers out there that were misled about the terms of the loan.”

The Law Foundation is suing a broker, real estate agent and lender in federal court on behalf of nine Santa Clara County families, many of whom speak only Spanish, contending they were lured into mortgages they didn’t understand. The lawsuit alleges that the broker inflated incomes on loan applications, misrepresented the terms of the loans and stuck clients with higher payments than they had been promised.

The victims “thought they saw the promise of the American Dream, and instead they ended up with a nightmare,” Arusha said. “I think they were seen as easy targets for predatory lenders who could sell them a bill of goods without giving them disclosures in a language they understand.”

The Law Foundation is handling 10 other cases involving predatory lending, half of them for Latino clients, Arusha said.

But in Orange County, the district attorney’s office has not reported an increase in prosecutions for fraudulent lending. Elizabeth Henderson, a prosecutor in the county’s fraud unit, said many such crimes go unreported in immigrant communities because of a distrust of law enforcement and confusion over what had occurred.

“They’re not really sure what they were promised, so they don’t know if they were cheated,” she said.

Sitting in his Santa Ana home, waiting for the bank to kick him out or for his kidney to kill him, Aviles did not hesitate to characterize what had happened to him: “They used me, nothing more.”

He was led astray, he said, by a man he had considered a dear friend, Carlos Lares. They used to work in a factory together. He said Lares showed him about a dozen homes, including the one he bought, and offered to arrange a mortgage.

State records show Lares lacks the real estate license required to show homes. In an interview with The Times, Lares denied showing homes and said he merely took Aviles to the office where he works, Century 21 South Coast. He declined to comment further. His business card lists him as a “team service associate.”
Part of me does feel bad for him, but he was stupid to think he could even make payments o $3600 a month, when he and his wife only make $9.00 an hour.

WE should not have to bail him out or bail out others like them. This article is the start of letting the taxpayer bail these people out of their situations. Screw the people who made educated choices.
“”"Jesus, Mary and Joseph…..a $600K house? $9/hr income. You must be kidding me. What was this man thinking in ANY language??? “”"”

LOL that is the going rate in this part of the country. What is sad……. the majority of Santa Ana is a dump…… it is an illegals haven…… It is little TJ

Administrator answers:

Jesus, Mary and Joseph…..a $600K house? $9/hr income. You must be kidding me. What was this man thinking in ANY language???


Ken asks…

Should I buy a house?

I live in the heated real estate market of Los Angeles and I’m looking at homes around 650K. I’m 25, I make 70K per year, I have a girlfriend who can kick in 1000 a month for rent, and I have 200K to put into a down payment. I feel that the market is cooling but rates are low and I don’t want to miss out on an opportunity to be a home owner at this age. I would be willing to keep it for at least 5 years before moving.

Administrator answers:

I think that if given the choice between rent and buy in this market, I would buy if not worried about the “bubble” bursting and rent if I was. The real estate values are inflated right now which is why it’s called the “housing bubble.” If you buy a 650k house today, when the “bubble” bursts and the value declines largely, you will be paying a 650k mortgage on a 400k house. The rates being low is an advantage to home owning right now, but the interest payments are always “write-off-able” for your taxes. If you are not worried about the bubble bursting within your 5 year stay at the house, then I would buy. You would be able to build equity and not have to worry about rent increases.

Thomas asks…

Would Phoenix or Scottsdale be a good area for someone single in their 20s?

Currently I live in the Los Angeles,CA area and can’t fing a job here or affordable housing. I’m a 27 year old single white male. In June 2004 I gradauted from California State University Northridge with a BA in Radio/TV/Film and a minor in marketing. I haven’t found a job in the entertainment industry. I no longer want to work in the entertainment industry.

My parents want to throw me out of their house and I can’t afford a place to live in the LA area. A room for rent in the LA area goes for $800 or $900 a month. A crappy studio goes for $1000 or more a month.

For several years after college I have thought about packing up my car and driving to Phoenix to find better job oportunities and cheaper housing.

Is the Phoenix area a good place for a young single white male?

Would anyone recomend the phoenix metro area as a place to live?

In the LA area people are very judgemental on who the hire. I have CP,Tourets and talk in a monotone voice. Will I have employment descrimination in Pheonix Metro?

Leaving LA and saying goodbye to my friends and family would be hard but if I could find a better life for myself in Phoenix it would be worth it.

What part of the phoenix area should I look into? I don’t want to live in any low income ghetto areas.

Administrator answers:

Those would be 2 great areas for singles. Lots of fun places to go. The jobs don’t pay as well as L.A..

Susan asks…

i don’t know what to do? really long….?

ok here’s what’s going on…lol. i live in california, Los angeles and i work at a custom clothing company. i get paid $13 an hour which i guess is ok. i have a 18 month old daughter and am married. My husband lost his job about a month or so and so it’s been really hard to try to pay my bills and his bills as well but i was making it. the only reason i’ve been able to pay all our bills is because we live with my in laws and they only charge us $500 for rent a month so yea money has been tight but thank goodness for that. well my aunt and my grandma live in texas so i was recently telling her how hard it’s been to keep up with our bills and how we’re never gonna get out of my in laws house cause it’s just too expensive in la. i mean i can’t even find a decent 1 bedroom for less than $1000 a month. i can’t get low income apts because i’m not considered low income. so she offered to get me a job where she works (bank of america) and she said i should move to texas because it’s much cheaper. so i accepted and decided that would be a good move. My job would start at $15 an hour plus benefits(which right now i’m paying $400 for insurance) and since my husband doesn’t have a job i figured we have nothing to lose. so i let my employer know and she was upset that i was gonna be leaving and she started asking me why. I just told her my husband lost his job and i just can’t make it out here, our bills are killing me and having a baby isn’t cheap. we were fine when he was working but it’s just too hard to support 3 people here in la. so she offered to give my husband a job here at least until he finds something else. she started him at $10 an hour and now i’m not sure if we should just stay or go. i mean i don’t want to make the wrong decision and end up regretting it. I’m sorry this is so long but i’m just so confused. i want to do what’s best for me and my family. what do you think?
thanks everyone for your answers. i should mention i’m an accountant, i work for a custom clothing company but it’s not a store, it’s more corporate. Also i’m in los angeles cause this is where i grew up, some of my family lives here and some just recently moved to texas. they say it’s great over there just boring…lol.

Administrator answers:

You have to think of it in the long term perspective:
Can your husband find a good job in Texas? Does he have a career?
Places are cheap for a reason… It’s usually because they are isolated or do not provide good opportunities.
If neither you or your husband have career jobs then you have the option to move wherever you want and start anew. If you are trying to start a career and build contacts etc… Then maybe LA is best.
Also in LA you seem to have the support of generous in laws, it might be nice for your kid to be near the grandparents.

It’s a tough situation. I suggest taking a piece of paper and listing all the pros and cons of Texas Vs LA that way you can have a clear idea of what you are facing.

George asks…

Why are some houses’ rents cheap out in Newport Beach, ca ?

So today I was looking through I currently live on the Suburban edge of the Los Angeles/Orange County line. My home is beaing taken by CALTrans due to the expansion of the I-5 freeway. So basically, we have to find a new home to rent for about a year by this coming January. When I was looking throught Newport beach rentals, I saw home literally on the beach going to 18,000 a month! That’s an amazingly cheap rent for a southern california home on the beach! Can somebody please explain to me why these homes’ rents are cheaper than some of the crappy homes in the lower class portion of Los Angeles?

Administrator answers:

That is EIGHTEEN-THOUSAND! = Two Hundred Sixten Thousand a year.
Not one thousand, eight hundred.

There are no crappy places in Los Angeles or Orange County that rents for $18000.
If you want to live in the hood like parts of Inglewood, East LA, or South Central you will easily be able to find a place for under $1000 a month.

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