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Multi Family Homes for Sale in Los Angeles Real Estate Market

by Eman HamedMay 22, 2018September 6, 2023

Are you looking for multi family homes for sale to buy as an investment property? Start your search in Los Angeles, CA!

The real estate market has many opportunities to offer property investors. There are different types of properties, strategies, financing options, etc. With regards to the types of investment properties, one of the most popular and desired types is multi family homes. These are investment properties that consist of multiple residential units and house multiple tenants.

If you’re a Los Angeles real estate investor, we highly advise you start looking for multi family homes for sale. Based on data analysis from Mashvisor, Los Angeles is the top real estate market for investing in multi family homes in the US!

Keep reading to learn why it’s profitable for property investors to buy multi family homes for sale in Los Angeles, in which neighborhood you should start looking, and how to start your property search with Mashvisor’s real estate investing tools.

Why Consider Multi Family Homes for Sale as Investment Properties

Higher ROI

The return on investment is the main motivation for every real estate investor. The ROI is basically the profit made from an investment property. In real estate investing, profit comes in the form of cash flow and appreciation. When you buy multi family homes for sale, you have more chances of generating cash flow (rental income) seeing as these investment properties consist of more residential units than a single-family home (which is only one residential unit).

In addition, the longer you hold multi family homes, the more its value will increase (appreciation). This means a real estate investor can buy multi family homes for sale now, and sell them later on in the future for a price higher than the initial purchase price! Furthermore, property investors can force appreciation on multi family homes by adding amenities such as a laundry room or a parking space or by providing extra services. This will also lead to a higher return on investment.

Easier to Finance

When you first think of multi family homes for sale, you would expect them to be harder to finance seeing as they’re larger in size than single-family homes. However, property investors find that obtaining financing for the purchase of these investment properties is actually easier!

Thanks to cash flow, banks and loan lenders are confident that the rental income will cover the loan payments. Thus, they are more motivated to give a mortgage loan for a real estate investor buying multi family homes for sale.

Fewer Risks

It’s very unlikely for multi family homes to get 100% vacancy rate, especially when investing in a real estate market in which demand is high and people prefer renting instead of buying a house. In such locations, there’ll always be potential tenants. This, in turn, reduces the risk of negative cash flow!

For example, assume you purchased multi family homes for sale that consist of 16 residential units and 3 of these units are vacant. Of course, no real estate investor would want this, but you’ll still be able to generate cash flow from the units that have occupants.

Why Consider Buying Multi Family Homes in Los Angeles

The Los Angeles real estate market is a desirable spot for many Americans as well as international property investors. One reason for this is the many investment opportunities that the city has to offer. Los Angeles property investors have the opportunity to invest in both traditional and Airbnb investment properties.

Los Angeles is known as a top tourist destination. Thanks to its many attractions (including the iconic Hollywood Sign, Hollywood Boulevard, the Walk of Fame, and studios such as Universal and Warner Brothers that offer behind-the-scenes tours) over 10 million tourists visit the city each year. This makes the city one of the best and most profitable real estate markets for a short-term Airbnb investment!

Moreover, Los Angeles is also a business city as it offers various creative job opportunities that attract long-term tenants. As a result, more and more residents (both domestics and international) are moving into the city. This increases the need for traditional long-term investments in the Los Angeles real estate market!

Now you might be wondering: why look for multi family homes for sale? Why not just any other type of investment property? Well, Los Angeles real estate has one of the lowest homeownership rates because people moving to the city are mostly young millennials who are not financially capable of buying a home. As a result, they turn to renting apartments. This increases the demand for investing in multi family homes, which in turn led to rental income increase as well! As a result, multi family homes for sale make very profitable investment properties in the Los Angeles real estate market.

A Quick Summary of Los Angeles Real Estate Market

Median Property Price: $935,210
Traditional Rental Income: $3,235
Traditional Cash on Cash Return: 1.43%
Traditional Cap Rate: 1.43%

Click here to start looking for and analyzing different investment properties in Los Angeles, CA!

The Best Neighborhoods in Los Angeles to Find Multi Family Homes for Sale:

Here is more in-depth information and numbers regarding these neighborhoods, provided to you by Mashvisor’s rental property calculator:

Multi Family Homes for Sale in Chinatown

Median Property Price: $933,000
Traditional Rental Income: $4,300
Traditional Cash on Cash Return: 2.84%
Traditional Cap Rate: 2.84%
Occupancy Rate: 57.5%

Multi Family Homes for Sale in Panorama City

Median Property Price: $529,000
Traditional Rental Income: $2,400
Traditional Cash on Cash Return: 2.31%
Traditional Cap Rate: 2.31%
Occupancy Rate: –

Multi Family Homes for Sale in Watts

Median Property Price: $574,210
Traditional Rental Income: $2,884
Traditional Cash on Cash Return: 2.26%
Traditional Cap Rate: 2.26%
Occupancy Rate: –

Multi Family Homes for Sale in Sun Valley

Median Property Price: $651,631
Traditional Rental Income: $2,817
Traditional Cash on Cash Return: 2.12%
Traditional Cap Rate: 2.12%
Occupancy Rate: –

Multi Family Homes for Sale in Southeast Los Angeles

Median Property Price: $581,250
Traditional Rental Income: $2,748
Traditional Cash on Cash Return: 2%
Traditional Cap Rate: 2%
Occupancy Rate: 48.31%

Multi Family Homes for Sale in South Los Angeles

Median Property Price: $611,449
Traditional Rental Income: $2,886
Traditional Cash on Cash Return: 1.94%
Traditional Cap Rate: 1.94%
Occupancy Rate: 59.8%

Multi Family Homes for Sale in University Hills

Median Property Price: $613,032
Traditional Rental Income: $2,812
Traditional Cash on Cash Return: 1.88%
Traditional Cap Rate: 1.88%
Occupancy Rate: 56.92%

Multi Family Homes for Sale in Central City

Median Property Price: $606,370
Traditional Rental Income: $2,895
Traditional Cash on Cash Return: 1.87%
Traditional Cap Rate: 1.87%
Occupancy Rate: 57.06%

Multi Family Homes for Sale in Leimert Park

Median Property Price: $776,000
Traditional Rental Income: $3,037
Traditional Cash on Cash Return: 1.85%
Traditional Cap Rate: 1.85%
Occupancy Rate: 28%

Multi Family Homes for Sale in Arleta

Median Property Price: $795,000
Traditional Rental Income: $3,500
Traditional Cash on Cash Return: 1.78%
Traditional Cap Rate: 1.78%
Occupancy Rate: –

Sign up for Mashvisor now to get access to our investment property calculator as well as other real estate investment tools to help you buy the best investment properties.

How to Find Multi Family Homes for Sale in Los Angeles

Mashvisor’s platform provides property investors with the best real estate investing tools and data analysis (traditional and predictive) regarding traditional and Airbnb investment properties to help them analyze and find the best investment property. To start your search for multi family homes for sale in the Los Angeles real estate market, make use of Mashvisor’s:

Investment Property Finder: A powerful and heavily customizable search tool that allows property investors to search for rental properties based on specific criteria, such as finding properties of a certain type, in a certain neighborhood, or with a certain Cap Rate.
Investment Property Calculator: A versatile tool that allows property investors to calculate the different values related to an investment property, including the Cash on Cash Return, Cap Rate, Cash Flow, and Airbnb Occupancy Rate.
Heat Map Function: The heat map function for the property finder tool allows property investors to find rental properties much faster using visual cues. For example, you can set the heat map to indicate the areas with the highest Cash on Cash Return, and you will immediately be able to see the results.

Sign up with Mashvisor to get full access to these real estate investing tools to start finding and analyzing different types of investment properties in any state, city, and neighborhood across the US real estate market!

The Bottom Line

To sum up, the world of real estate investing offers different types of investment properties, one of which is multi family homes. These attract property investors due to their higher return on investment, easier financing, and fewer risks. If you’re a Los Angeles real estate investor, you should definitely start looking for multi family homes for sale!

The above-mentioned neighborhoods are those in which property investors will find the best multi family homes for sale in Los Angeles, based on data analysis computed by Mashvisor’s rental property calculator. Don’t forget to use the best real estate investing tools provided by Mashvisor to turn 3 months of property research into only 15 minutes!