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chubbuni138016
2010 Nov 15, 5:37am
Hi RayAmerica,
I moved the posting here for better access: http://patrick.net/?p=578677
But to answer your questions, in LA, it's usually 1.25% of assessed value. If we're talking $100k, for ease of use, then $1250 which is peanuts compared to the $6600/yr for HOA.
RayAmerica
2010 Nov 15, 11:30am
chub .... I would have several problems with your scenario. First and foremost is the location because as you say its "skid row." With that being the case, what type of renter do you think you're going to attract provided your cop network doesn't work out? IMO, you'll attract nothing but problems, including difficulty in collecting the rent on time, the property being trashed, the property potentially losing value in the future due to its location, etc. The high HOA may not bother you, but if you want to sell it in the future it may pose a major problem in finding a buyer that will be willing to pay that amount, along with the fact that the HOA will be counted as long term debt against the buyer which will diminish borrowing power accordingly. With today's rates, the HOA (based on $500 per month) amounts to a loss of borrowing power of over $100,000 (30 year fixed @ 4%). Tying up $100K in a bad location wouldn’t be the move I would make. I hope this helps.
Why do you think you would get it for anywhere near 100 K, when the last sales of smallest units were apparently at >200 K?
chubbuni138016
2010 Nov 16, 12:47am
Thanks for your feedback, Ray. To answer some of your questions:
The particular area that the loft is in is this weird mix of old skid/row and an already rapidly gentrified artist's area with lots of hipsters and 20-30 somethings who have a suprising amount of disposable income... probably, because most of them don't have any kids. I've been to a few get togethers at this building, and the vast majority of tenants/owners are those that I've mentioned above.
The people that make up skid row are too destitute or drugged out to afford to rent (that's why the live on the streets) so the problems with renters would be more of the yuppie/hipster variety: want to paint the loft a different color, put up pretentious art pieces on the walls, rather than the typical low income renter issues. Even better if the tenants were to be cops.
I totally agree that the HOA is insanely high, and I thought your formula for the $100,000 tied up was pretty useful. I appreciate the feedback, thanks.
chubbuni138016
2010 Nov 16, 12:50am
Why do you think you would get it for anywhere near 100 K, when the last sales of smallest units were apparently at >200 K?
I agree that 100k might not be viable. However it's more than an academic exercise. If you're looking at comps you have to factor in that they're all in much better areas. This is the only loft that I'm aware of that is this far into skid row. Every other property that I've seen is either 3 blocks north into Little Tokyo, or way down South and East in Downtown proper.
From the news:
"An 84-year-old woman was pushed to her death from a commuter train platform in Los Angeles' Little Tokyo by an apparent stranger ..."
A nice neighborhood there ....
The HOA quoted to me from a realtor ws for a studio apt.. She stated that the HOA is based on squart footage. Is this outrageous rate the original price when the units were first sold ( at much higher prices) or are now that high to subsidize the vacant units. Parking in trendy Boston (2 blocks away) is $300/ mo. Anyway, appreciate the information
Aileen May
Dana Point, CA
American in Japan
2011 Feb 13, 2:11pm
Good! I lurked for over three years before posting...
I'll cover Big Tokyo and you cover Little Tokyo. :-)
FuckTheMainstreamMedia
2011 Feb 15, 1:08pm
No way those units get a consistent $1100/mo
Anyone making these claims...just check out whats available in the building on craigslist.
Bottom line is a
I'm in escrow with a unit at LTL, but need to contact the HOA and any resident with knowledge about the current status of the HOA litigation against the builder. Can anyone help? thanks
Go for it!
Just kidding. Ask yourself, what are the political trends to kick out the bums who will be your neighbors? Are those trends against the bums or promoting and keeping the bums outside your front entrance forever?
I will guess that the local politics will perpetuate the bums and keep the neighborhood rotten forever.
Probably soon the HOA fees will rise to pay for security guards and whatnot.
I think life is too short to risk the improvement of a shitty area. It's better to save up to get a piece of the rock in a nice place.
A $500/month fee is like another $100-150K mortgage.
Long time lurker, first time poster. Despite (or perhaps because of) the wide range of viewpoints on this forum, I've found the discussions to be very informative. I have a question for some of you housing experts. 23 Units in the Little Tokyo Lofts are going to be up for auction this Sunday, November 21st. Minimum bids start at $75,000 for the 800 sq ft. studios, all the way up to the penthouse 2 bedroom loft which is starting at $240k or thereabouts. After doing all of the math, I'm leaning towards attending the auction, just to see what's going on, but I wanted to see get some of your feedback. Here's some info about the place: http://la.curbed.com/tags/little-tokyo-lofts
Cons: Probably have to list all of these first. Pretty much in the heart of LA's skid row with tons of transients everywhere, very high HOA's (starting at $500/month), reports of weird smells coming from the hallways, etc...
Pros: The units inside look great, potentially very cheap mortgage, 24 hour security, surrounding area 3-4 blocks north in Little Tokyo is very nice/clean with lots of restaurants/bars/shopping, brand new Police station is two blocks away and bum patrol is usually always in full effect.
I have several friends who are cops that expressed an interest in living 2 blocks away from their station. Unfortunately for them, their finances are as wretched as the LAPD's reputation, and they don't have the ability to qualify for a mortgage. Still, cops bring in pretty good money and although I wouldn't rent to any of my friends, I think that I'd be able to find a few renters who would be interested through their network. Given the scenario that I could buy the smallest unit all-cash for $100,000 after closing costs, and rent the place for $1100 a month, it seems like the rent to price ratio would favor buying.
Then again, it'd be a b**** to pay $500 a month in non tax-deductible HOA fees, but netting $400-$500/month (factoring in vacancy rate, maintenance, etc) after everything would be pretty appealing. I'm aware that there are a ton of pitfalls here - high HOA (any high-rise HOA for that matter), sketchy neighborhood and this exercise is all academic if I'm not able to get the loft for the price that I quoted... but again, wanted to see what the experts had to say. Thanks, everyone.
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