Samimi CRE Advisors
LA Multifamily Answers
Direct, no-fluff answers to the 39+ questions LA apartment owners actually ask — answered by Cameron Samimi, Founder, Samimi CRE Advisors at Lyon Stahl Investment Real Estate.
Valuation
- How much is my LA apartment building worth?Your LA apartment building's value is driven by trailing-12 NOI divided by a submarket cap rate, cross-checked against Gross Rent Multiplier on recent comparable sales, and adjusted for rent regulation exposure, condition, and current-to-market rent spread. A defensible number triangulates income, comps, and replacement cost. Request a free Broker Opinion of Value for a property-specific answer.Read answer
- What cap rate are LA multifamily buildings selling at?LA County multifamily cap rates vary widely by submarket, unit count, and rent-regulation exposure. Trophy coastal South Bay and Santa Monica trade tighter than value-add Long Beach, Inglewood, or San Pedro. Published averages are misleading — for a current, property-specific cap rate on your building, call 310.259.7556.Read answer
- How long does a Broker Opinion of Value take?For most LA County apartment buildings, Samimi CRE Advisors delivers a written Broker Opinion of Value within 3–5 business days of receiving the rent roll and T-12 operating statement. Complex buildings with regulated tenancy or partial data can take 5–7 days.Read answer
- Is a Broker Opinion of Value the same as an appraisal?No. A Broker Opinion of Value is a market-based opinion from an active broker who is transacting in the submarket — it reflects what buyers will actually pay today. An appraisal is a formal valuation from a licensed appraiser, typically used for lender financing. BOVs are usually faster and more accurate for pricing a sale; appraisals are required by lenders at closing.Read answer
- Should I renovate my apartment building before selling?Usually no. Most buyers of LA multifamily are value-add operators who will renovate themselves and don't pay full retail for your work. Exceptions: cheap curb-appeal fixes (paint, landscaping, lighting) and life-safety items (soft-story, SB 721) that would otherwise scare buyers or fund control. Ask before spending anything past $10K.Read answer
Selling Process
- How do I sell my apartment building in Los Angeles?To sell an apartment building in Los Angeles: get a Broker Opinion of Value, hire a specialist multifamily broker, assemble the offering package (rent roll, T-12, capex history, photos), run a 21-day on-market call-for-offers, select the strongest buyer on price plus terms, then close through a 30–45 day escrow. Total timeline: 60–120 days.Read answer
- How long does it take to sell an LA apartment building?60–120 days is typical for an LA apartment building sale from listing to close. Marketing runs 21–30 days, offer negotiation 1–2 weeks, and escrow 30–45 days. Off-market sales close faster (30–60 days total) but usually at a 3–7% price discount.Read answer
- Should I list on-market or sell off-market?On-market typically produces the highest price because it creates competition among buyers. Off-market trades 3–7% in price discovery for privacy and speed. Most owners net the most on a tightly run 21-day on-market call-for-offers — but off-market is right for partnership disputes, estates, or tenant-sensitivity situations.Read answer
- What is a multifamily Offering Memorandum?A multifamily Offering Memorandum (OM) is the professional document buyers use to underwrite your building. It includes the rent roll with lease + last-increase dates, T-12 operating statement, capex history, professional photos, submarket comps grid, financing assumptions, rent-regulation status per unit, and a clear value-add narrative. A weak OM leaves 5–10% on the table.Read answer
- How do you decide which buyer's offer to accept?Five factors: price, earnest money (1–3% is standard; hard day-one signals strength), financing contingency length, due-diligence period (21–30 days is typical), and the buyer's last three closings. A retrade-prone buyer at $5.1M nets less than a clean buyer at $4.95M. We underwrite the buyer as hard as the buyer underwrites the deal.Read answer
- Can I sell my apartment building with open code violations?Yes. LA multifamily is regularly sold with open code violations, unpermitted work, or outstanding notices. Buyers price them in — the key is full disclosure up front and pricing that reflects the true remediation cost. Hiding violations kills deals in escrow and creates post-close liability. We handle disclosure the right way.Read answer
1031 Exchange
- How does a 1031 exchange work on an LA apartment sale?A 1031 exchange defers capital gains tax when you reinvest sale proceeds into like-kind US real estate. The Qualified Intermediary must be in place before you close the relinquished sale. You then have 45 days to identify replacement property and 180 days total to close on it. Cameron coordinates both sides so the timeline works.Read answer
- What is a reverse 1031 exchange?A reverse 1031 exchange lets you close the replacement property before selling the relinquished property. An Exchange Accommodation Titleholder (EAT) parks title on one of the two properties for up to 180 days. It's more expensive and more paperwork-intensive than a forward exchange, but it eliminates the 45-day identification pressure.Read answer
- Can I 1031 my LA apartment into out-of-state property?Yes. Like-kind real estate under §1031 means any US real property held for investment or business use. Many LA sellers exchange into Texas, Arizona, Tennessee, or Carolinas multifamily for yield. Note California's clawback: when you eventually sell the replacement, California collects its deferred state tax even if the replacement was elsewhere.Read answer
- What if I can't find a replacement in 45 days?DSTs (Delaware Statutory Trusts) and NNN properties are the standard backstops. Both count as identified replacement property under §1031 and can close inside the 180-day window with minimal underwriting friction. We keep pre-vetted DST options ready so no client accidentally busts a 45-day clock.Read answer
Rent Control & Tenants
- Does my LA apartment building have rent control?It depends on the city and the building's age. City of LA pre-1979 multifamily is generally covered by LARSO. Most California buildings 15+ years old fall under AB 1482. Santa Monica, Long Beach, Inglewood, West Hollywood, Culver City, and Beverly Hills all have their own local programs. Always verify the specific property — rules vary materially.Read answer
- Does AB 1482 apply to my building?Generally yes if the building is 15+ years old, has 2+ units, and isn't separately alienable (single-family on its own lot). Exemptions include single-family homes not owned by a corporation or LLC with a corporate member, condos owned separately, and buildings under 15 years old (rolling exemption). Always verify per property with your attorney.Read answer
- Can I sell my building with tenants in place?Yes — most LA multifamily sales are tenant-occupied. Buyers underwrite the regulated rents and price accordingly. Clean estoppels, accurate rent rolls with last-increase dates, and a credible loss-to-lease narrative drive the price. Trying to deliver a vacant building often costs more than it recovers.Read answer
- Can tenants block or stop the sale of an apartment building?No. Tenants cannot legally block the sale of an apartment building in California. Ownership transfers with tenants in place; existing leases carry over unchanged. Tenants do have rights around reasonable notice (24 hours in writing) for showings and inspection access. We handle tour coordination professionally so tenants stay cooperative.Read answer
- What is the LA RSO 9-A disclosure?The RSO 9-A disclosure is required for transfers of LA City rent-stabilized buildings. It confirms the buyer has received the LA Housing Department's rent registration data and understands RSO obligations. Escrow won't close without it. Verify the current form and required attachments with your escrow officer for the specific property.Read answer
- Should I deliver my building vacant before selling?Rarely worth it. Buyout costs, Ellis Act timelines, and legal exposure often exceed the price premium a vacant building commands. Most LA buyers actively prefer tenanted deals for the in-place income. Exceptions: heavy value-add positions, redevelopment plays, and specific probate/estate situations. Get a broker opinion before committing to any buyout program.Read answer
Taxes & Closing Costs
- What are total seller closing costs on an LA apartment sale?Plan for roughly 5–6% of sale price all-in: broker commission (typically 4–5%, split with the buyer's broker), LA City and County transfer taxes (Measure ULA applies above the current threshold — verify with escrow), title and escrow fees, and prorations. Escrow provides a line-item estimate before you sign.Read answer
- Does Measure ULA (LA Mansion Tax) apply to my apartment sale?Measure ULA (the LA 'Mansion Tax') applies to real property transfers within the City of Los Angeles above the legislated threshold — originally $5M / $10M, adjusted annually for inflation. The tax is 4% between the two tiers and 5.5% above the upper tier. It applies to all property types, not just single-family. Verify the current threshold with your escrow officer.Read answer
- What does it cost to hire a multifamily broker in LA?Multifamily broker commission is typically 4–5% of sale price, paid by the seller at close and usually split with the buyer's broker. The cost is offset many times over by accurate pricing, broader buyer reach, and better term selection. Discount brokers who cut fees typically cut the marketing budget and buyer network that drive price.Read answer
- How much capital gains tax will I owe on my apartment sale?Federal long-term capital gains is 15% or 20% depending on income, plus 3.8% NIIT for most sellers, plus depreciation recapture at 25% on prior depreciation taken. California adds 9.3–13.3% state tax on top with no long-term rate distinction. A 1031 exchange defers all of it. Talk to your CPA for a property-specific number.Read answer
- What is cost segregation on apartment buildings?Cost segregation is an engineering-based study that reclassifies portions of an apartment building from 27.5-year residential real property into 5-, 7-, and 15-year assets. That accelerates depreciation, front-loading deductions and sheltering rental income (or offsetting other passive gains). Studies typically cost $5K–$15K and pay back in year one on most $2M+ buildings.Read answer
Financing
- Should I sell before or after refinancing?Usually sell now if you're planning to sell within 24 months. Refinancing eats 1–3% in loan costs plus prepayment penalties on the new loan when you sell. If you're holding 3+ years, refinance may make sense for cash-out or rate improvement — but not to 'clean up' the balance sheet before selling. We model both paths with your specific loan.Read answer
- Can a buyer assume my existing loan?Sometimes. Most agency multifamily loans (Fannie Mae, Freddie Mac) are assumable with lender approval and a 1% assumption fee. Bank portfolio loans vary — some allow it, most don't. If your rate is materially below market, an assumable loan is real value the buyer will pay for. We surface that in the OM.Read answer
- What is agency debt for multifamily?Agency debt refers to Fannie Mae and Freddie Mac multifamily loans, the standard financing for 5+ unit apartment buildings. Fixed rates for 5, 7, 10, or 12 years; 30-year amortization; typical 65–75% LTV at 1.25x DSCR minimum. Rates are the tightest available. Origination is slower (60–90 days) than bank debt but the terms are meaningfully better.Read answer
- What is DSCR on a multifamily loan?DSCR (Debt Service Coverage Ratio) is Net Operating Income divided by annual debt service. Multifamily lenders require a minimum DSCR — typically 1.25x for agency debt, 1.20x for aggressive bridge, 1.30–1.35x for conservative bank debt. It's the primary constraint on loan size in a rising-rate environment.Read answer
Value-Add & Development
- Can I add ADUs to my existing apartment building?Yes. California state law lets multifamily owners add ADUs to existing apartment buildings — typically detached ADUs in the yard/parking area plus non-livable-space conversions inside the building envelope. Rules cap what cities can require (parking, setbacks, size). Buyers pay real premiums for buildings with clear ADU upside. Verify per-parcel with the city.Read answer
- What is the Builder's Remedy in California?Builder's Remedy is a California Housing Accountability Act provision letting developers bypass local zoning and density rules when a city's Housing Element isn't HCD-certified, provided the project sets aside 20% affordable (or 100% moderate). It's driven material entitlement value in Beverly Hills, Santa Monica, Redondo Beach, Hermosa, and other South Bay cities recently out of compliance.Read answer
- Should I position my building as value-add or stabilized?Position matches the actual buyer pool. Stabilized product with market rents sells to yield buyers at tight cap rates. Value-add product with material loss-to-lease sells to operator buyers who underwrite the upside. Mispositioning either direction leaves money on the table. We diagnose the right position during valuation.Read answer
Code Compliance
- What is a soft-story retrofit and does my building need one?LA's soft-story retrofit ordinance (Ordinance 183893) requires seismic retrofit of pre-1978 wood-frame multifamily buildings with a soft or weak first story — typically tuck-under parking under living units. Retrofit costs $60K–$250K depending on unit count and structural design. Non-compliance blocks financing and materially discounts sale price.Read answer
- What is SB 721 balcony inspection?SB 721 requires California multifamily buildings with 3+ units to have all exterior elevated elements (balconies, decks, walkways, stairs) inspected by a licensed professional every 6 years. Initial deadline for existing buildings was January 1, 2026. Non-compliant buildings face lender and insurance issues at sale — get the inspection done before listing when possible.Read answer
Buying Multifamily
- How do I buy my first apartment building in LA?Start with a 4-unit (residential financing, best rates) or a 5–10 unit if you have $500K+ liquid. Pick a submarket you understand. Underwrite conservatively: verify rents, model 12 months of vacancy, and stress-test at 8% cap rate exit. Line up your lender first, then engage a broker who transacts in your target range.Read answer
- Should I buy on-market or off-market?Off-market can produce better acquisition value when you have a specific seller relationship or a highly targeted thesis, but the volume is small. On-market is where 90% of institutional-grade LA multifamily trades. Serious buyers work both channels simultaneously; Samimi CRE Advisors surfaces both to our buyer clients.Read answer
- What's a good cap rate to buy at in LA?There's no single 'good' cap rate — it depends on the submarket, unit count, rent regulation, upside, and your cost of capital. A 4.5% cap on stabilized Santa Monica coastal product can outperform a 6.5% cap on regulated Wrigley product over 10 years. Frame it as risk-adjusted return, not just yield.Read answer
- Is USC-area student housing a good investment?USC-area student housing (North University Park, West Adams, Jefferson Park, Exposition Park) can produce above-market yields but demands active management — annual turnover, by-the-bed leasing, parent-guaranteed leases, and heavy wear. It's a real asset class with real returns for operators who understand it. Not passive.Read answer