What Does $112,500 Per Unit Look Like in Los Angeles?

What matters

1. One of the Lowest Price-Per-Unit Sales You'll See for 1950's Product.  At $112,500 per unit, this transaction sits far below the Los Angeles multifamily average, providing a valuable reference point for workforce housing and older apartment assets.
2. An 8.99 GRM Remains a Useful Benchmark  The sale closed at an 8.99 Gross Rent Multiplier, giving investors another real data point for pricing similar, lower-rent apartment communities.
3. 54 units averaging just 316 square feet. These are 54 studios averaging just 316 square feet. While smaller units can produce higher rent per square foot, the turn over on studios is painful and adds additional operating expenses when the units get to market.
4. I'm Not Buying This at an 8.99 GRM.The $112,500 per-unit price initially looks attractive, but I'd budget at least $10,000 per unit or roughly $540,000 to renovate these 54 studios. At an average size of just 316 square feet, I also don't see much room for rent growth. Market estimates market rent at approximately $1,300 per month, which is already close to where I believe renovated units would top out. After investing another half-million dollars, I don't think the return justifies paying an 8.99 GRM. I'd need to be closer to an 8 GRM, and even then, this probably wouldn't fit my investment strategy.