How do I buy my first apartment building in Los Angeles?
Most first-time LA multifamily buyers start with a 4-to-16-unit building priced from roughly $1.5M to $4M, put 30-40% down on agency or bank debt, and buy in submarkets where the numbers still pencil, not where they wish they could live. The process: define a buy box (submarkets, unit count, price band, cap rate floor), get pre-underwritten with a multifamily lender, then look at real deals with published financials until you can spot a mispriced building yourself.
Answered by Shaya Lowenstein, a Los Angeles multifamily broker at Lyon Stahl Investment Real Estate, CA DRE 01942326, with 15 years in apartment buildings and land across Los Angeles County. His closed sales are published with addresses and recording dates, so anything claimed here can be checked against the county record.
The mistakes that cost first-timers money.
Underwriting the seller's expenses instead of your own (property tax resets at your purchase price under Prop 13); assuming RSO rents reach market on a schedule you control; ignoring the physical items that eat year-one cash flow, such as roofs, sewer lines, and seismic status; and buying a "deal" in a submarket you never walked at night. Every one of these is avoidable with honest numbers up front, which is why I publish full rent rolls and both cap rates on my listings.
House-hacking the small stuff.
Owner-occupying one unit of a 2-4 unit building unlocks residential financing with much lower down payments, a legitimate first rung. The math is different (you are buying a home plus income, not a pure investment), but it is how a meaningful share of LA's small-building owners started.
EDUCATIONAL ONLY, NOT LEGAL OR TAX ADVICE. RATES, THRESHOLDS AND ORDINANCES CHANGE, AND SEVERAL OF THE FIGURES HERE DEPEND ON FACTS SPECIFIC TO YOU. CONFIRM ANYTHING YOU PLAN TO ACT ON WITH YOUR OWN ATTORNEY OR CPA, OR WITH THE AGENCY THAT SETS IT.
How much do I need down for an LA fourplex?
Investor purchases typically need 25-40% down depending on the lender and the building's income. Owner-occupied 2-4 unit purchases can go far lower with FHA/conventional residential loans.
What cash flow should I expect in year one?
On in-place rents at today's caps, often thin to slightly negative after real reserves. LA buildings are bought for the rent trajectory and the land. If someone promises fat day-one cash flow, check whose expense numbers they used.
SHAYA LOWENSTEIN · LYON STAHL INVESTMENT REAL ESTATE · DRE #01942326 · (323) 944-2221