343 W 89th St, Los Angeles

the successful sale of this 10-unit apartment building located at 343 West 89th Street in the 90003 zip code of Los Angeles.

Offering Description

The 7,861 square foot property sits on a double lot that measures 10,500 square feet and with a very attractive unit mix of all 2 Bedroom / 1 Bathroom units, making it perfect for families and/or tenants living with roommates. The property also provides ample on-site parking for tenants in the rear of the building. The property is currently 100% occupied and with all Section 8 tenants, providing the investor with strong, secure cash flow which can be hard to come by in this post-pandemic era!

The property is purely value-add, so a new investor can add significant value to the asset by making simple touch-ups and renovations to improve the systems and aesthetics of the property. Another way an investor could create additional value would be to add ADU’s onto the rear parking lot. The new ADU program that was rolled out state-wide at the beginning of 2020 has offered investors an easy road map to increase income, and the ease in which investors are able to get plans for ADU’s permitted and approved has alleviated potential suitors a lot of the stresses that come along with developing and dealing with the city.

Deal Story

After sending our “Just Listed” email announcement to over 20,000 principals and brokers in Los Angeles, we were able to generate a fully non-contingent offer at 95% of the list price with a Buyer in a 1031 exchange and the Seller agreed. Escrow ran smoothly all the way up until the week of closing when the Seller was overcome with concern about his capital gains exposure. We had recently sold his six-unit property at 11700 S. Normandie Ave a few weeks earlier, and the compounded tax exposure proved to be the final hurdle left to overcome. We sprung into action and ran through some different options with the Buyer and Seller to try to mitigate the capital gains tax exposure as much as we could for the Seller. We were able to get the Buyer and Seller to agree to close with an All-Inclusive Deed of Trust, or AITD. This allowed the Seller to divide his capital gain from the sale between two calendar years, which was helpful to him from a tax perspective.

According to Costar, the price per unit was the highest for any rent control multifamily property to close in the 90003 zip code and the second highest price per unit ever to trade.

To learn more about this impressive...