Sunday, October 23, 2016

Eastside Property: Feeding frenzy for an Echo Park apartment building

Photo by David Bramante

The 16-unit apartment building at 1314  Sutherland Street needs some work. But apparently that didn’t matter to buyers after the building went on sale in early May after being family owned since 1949.  The unusually low asking price of $679,796  attracted a flood of interest, prompting the sellers to raise the price to $799,000 only one day after the building hit the market.  The offers kept coming in before the property, located next to the parking lot of El Compadre bar and restaurant,  was sold on June 20 for $903,000, according to Redfin.

Agent David Bramante*, who was not involved in the sale, was told there were about 25 offers, 17 of them in writing. A Beverly Hills buyer with an all cash offer was the winner of the bidding, Bramante said.  The  winning buyer had offered to pay $953,000 in cash but the seller reduced the price by $50,000 during escrow in light of deferred maintenance, Bramnate said. “The property has some challenges and it’s hard to say how the investment will turn out for the buyer,” he said.

The building, built in 1926, has 16 units, so an onsite manager is required. However,  there were a few vacancies at the time of close, said Bramante. “These factors are beneficial because they will allow the new owner to come in and immediately renovate units.”

*Bramante is an Eastsider advertiser.

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  1. I can only imagine what the rents will be here. I smell greed kids.

  2. The property is probably fully-occupied and probably has incredibly-low rents, and there might not be much the new owners can do about that (rent control). If it has been family-owned since 1949, then I imagine the owners didn’t raise the rent much over the years. Still, $900,000 seems like an very good deal for a 16-unit building in Silver Lake, regardless of low rental income.

    • I should have read the Redfin listing information before I posted my first comment. So the building has 16 studio apartments, and it’s master-metered (owner pays all utilities – electrical, water, gas), which means there’s little incentive for the tenants to conserve energy to keep the utility costs low.

      One unit is reserved for an on-site manager, and two are vacant (I’m guessing they’ll get $700 or $750 each for those units), and the other units’ rents are hovering in the low-mid-$400s a month. To me this looks like a long-term investment that might not give off much of a return now, but over time, with regular rent increases, could be a decent investment.

  3. Most tenants have been licked by by the owner saying pulling permits they will be converting the apts into condo. This has happen on Delta St.
    you all know evverything is fixable for the right price, made up track maps that show no liquior sales, next to a liquior store I could go on and on, but why, money talks very loudly. least I can say I sleep at night, my conscience is clean

  4. Geez, what a bargain… $60,000 a unit? That’s an incredible price. I believe there is not much a landlord can do to evict, tenants rights are pretty strong in LA County. Besides, if the rents in the building are about $400 per studio – which is low – the landlord will still be making 7.5% on his/her investment. There’s no need to evict anyone, since this is an amazing return in this economy. This building is a CASH COW… no wonder there was such a frenzy.

  5. Most owners do the whole cash for keys things legally. I was involved in three Echo Park properties on Logan St and W. Kensington where this was used. The owner offered about $6,000 to $7,000 dollars per family to leave.

    Most of the families at these properties were paying about $700 a month and after we renovated the properties the owner was renting them out at about $1850 a month but this was back in 2003.

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