Builders and Investors Move In - Redondo Beach Heats Up

"Is Redondo Beach next?" This question has been popping up from our income unit investors and builder clients for the last couple years. The answer, based on the competition we are running into when making offers on property, is a resounding "Yes."

Historical and forward looking Beach Cities average property values
(2009-2014 actual, 2015 projections - Zillow)

 

The Manhattan Beach Money Spills Over

In the last 15 years, Manhattan Beach went from a sleepy beach cottage town to a booming, hip city of multi-million dollar ocean view properties. Fueled originally by the run up in values through 2007, it continued the price climb as new families moved in and brought the public schools from average to stellar quality. Next, the "Silicon Beach" tech money rolled in sending ocean frontage Strand homes into the $10,000,000+ range followed promptly by a wave of high income buyers who wanted that relaxed, laid-back lifestyle they had heard so much about.

As the Manhattan Beach prices spiraled upward the builders, flippers and investors all fought over every tear-down home, fixer, vacant lot and even income units. Buyers looking to hold income properties for revenue stream just couldn't compete with the offers from builders who saw millions to be made by putting in new townhomes or luxury ocean view estates on the Strand. It sent many buyers into the next town south, Hermosa Beach. The same wave hit Hermosa and sent those property values racing up. It was only a matter of time before that money started moving south again. The next stop was Redondo Beach.

  

Redondo - Snuggled between the Manhattan Beach and Palos Verdes

Redondo is the largest of the Beach Cities, with South Redondo along the coast and North Redondo tucked just behind Manhattan/Hermosa. It is bordered by the popular Hollywood Riviera section of Torrance and the posh peninsula of Palos Verdes beyond. The ocean frontage section of South Redondo is where we are seeing the most activity, but the North Redondo neighborhoods are also seeing bulldozers moving in to replace older 1950's homes/duplexes with new townhome build outs.

Still Time to Buy in Redondo Beach?

The price escalations have certainly started, but there is still room for profit compared to Manhattan Beach or even Hermosa Beach. The signs of the coming changes are all there:

• Multiple offers - In 2013 we ran into twenty offers on a fourplex in Redondo, but 5-10 offers with half of those being "all cash" was very common.
• Duplexes going to builders instead of income property investors. A strong sign of the market shift to new construction.
• The construction fences. We often drive by homes that sold in the last couple months to see the construction fencing wrapping the property and a demolition crew moving in. The architects, builders, landscapers and crews all cover the fence with their business signs knowing more money is moving in.

Would you like more information on the opportunities available in Redondo, just give us a call.

- Norma Toering Broker/Owner of Charlemagne Int'l Properties (310) 493-8333
- Josh Toering  REALTOR (310) 525-9440

More Redondo Beach income property for sale:

Tenant Estoppels and Profit & Loss Statements - Income Property

One of our investment clients recently asked us about some of the technical forms involved in selling their seven unit complex. While this client does have a manager on-site, he was still concerned about the procedures, paperwork and expectations for these forms.

Tenant Estoppel Certificate: This form just verifies that the tenant/landlord/manager/new buyer all agree on the stated monthly rent, security deposit, lease dates (if any) and ownership of any appliances. Normally the tenant is provided a copy once the property is going in to escrow and then it is signed by all other parties. In addition to the estoppels, landlords usually provide copies of any leases or rental agreements on the properties.

Profit & Loss Statements: These come in many forms as every landlord/manager will have their own way of accounting. Most are a simple one page sheet showing the rental income and expenses. The common sales contract will ask the seller to provide such a statement for the last 12 months, though we often get a calendar year statement or two years, since it is kept that way for tax purposes anyways. Sometimes the buyer may ask to see additional information such as utility bills or details on recent repairs, but this is requested after the basic report is provided.

Do you have questions about preparing to sell your income property? From the paperwork, to negotiations, to wrapping up the deal so you can move on, Toering and Team assists our clients everyday. If you would like to discuss how we can help, please give us a call.

- Josh Toering, REALTOR
Charlemagne Int'l Properties
(310) 525-9440

Beach Cities of the South Bay Income Property Update-June 2014

The Pier in Redondo Beach CA.

May 2014 was a busy month for income property in the Beach Cities of Manhattan, Hermosa and Redondo. 10 Multifamily income properties sold during the month and 19 are in escrow with accepted offers. There are currently only 18 multifamily properties for sale in the Beach Cites.

Income Property breakdown by City for May 2014:

Manhattan Beach:

•  Active: 2 
•  Pending: 2 
•  Sold: 4   

Hermosa Beach:

•  Active: 11 (two are condos) 
•  Pending: 7 
•  Sold: 1   

Redondo Beach:

•  Active: 5
•  Pending: 7
•  Sold: 5  (Charlemagne Int'l Properties represented the buyer on one of the income properties sold in Redondo Beach.)

For more information regarding buying or selling income property in the Beach Cities of Manhattan, Hermosa and Redondo, contact Josh at 310.525.9440 or Norma at 310.493.8333.

Manhattan Beach income units for sale:

Hermosa Beach CA income units for sale:

Redondo Beach Units for Sale: