Navigating Rent Control & Maximizing ROI with a Strategic 1031 Exchange
When rent control policies create challenges for landlords, a well-executed 1031 exchange can unlock greater investment potential. Below discover how a longtime Bell Gardens apartment owner successfully transitioned from a 5-unit multifamily property at 6919 Adamson Ave, Bell Gardens, CA 90201, into a higher-income, landlord-friendly property through strategic brokerage and negotiation.
Bell Gardens Multifamily Transaction Overview
- Property Address: 6919 Adamson Ave, Bell Gardens, CA 90201
- Location: Bell Gardens, a rent-controlled market in Los Angeles County
- Property Type: 5-unit apartment building
- Sale Price: $1,085,000
- Seller’s Motivation: Avoiding restrictive rent control laws by relocating investment
- Sale Strategy: Listed at $1,100,000; sold within two weeks to an all-cash buyer
- Buyer Profile: Experienced investor seeking a stabilized multifamily asset
- Broker Representation: James Torres represented both Seller and Buyer
- Exchange Property: A 4-unit multifamily property with increased rental income and no rent control, secured through off-market negotiation
Overcoming Rent Control Challenges in Bell Gardens
The seller originally listed this property with a residential agent but struggled to attract serious multifamily investors. Recognizing the complexities of selling under rent control policies, the owner ultimately chose James Torres due to his track record of successful multifamily sales in Bell Gardens. The key challenges included:
- Strict rent control laws limiting future rent growth
- Attracting a strong buyer despite regulatory constraints
- Identifying a high-yield 1031 exchange property in a landlord-friendly city
Aggressive Marketing & Finding the Right Buyer
Within two weeks of listing, James leveraged an extensive database of active multifamily investors to secure an all-cash buyer willing to close in just 30 days. By executing a targeted marketing campaign, James positioned the property as a high-value asset despite local rent restrictions.
1031 Exchange: Upgrading to a Higher-Income Investment
While securing a buyer for the Bell Gardens property, James simultaneously searched for the ideal 1031 exchange replacement property. The market had limited options that met the seller’s financial goals, so James expanded the search to off-market multifamily opportunities. The selected exchange property offered:
- 4 large, detached houses with private backyards and garages
- Higher total rental income than the original 5-unit building
- More square footage, increasing long-term appreciation potential
- A landlord-friendly location with no rent control laws
Investment Results: Increased Income & Portfolio Stability
By transitioning from a 5-unit rent-controlled property to a 4-unit high-income property, the investor achieved:
- Greater monthly cash flow despite owning fewer units
- Higher total property square footage
- A stronger return on investment (ROI)
- Reduced regulatory restrictions, enhancing long-term investment security
