David and Multiman,
After reading your posts I am in a similar situation. Though I am not interested in rehabs my focus is now on obtaining the largest possible apartment complex that makes sense.
I believe that David may choose to pursue what he know best, rehabs. They may be difficult to find but there are some in LA. It may involve adding a bathroom or bedroom, adding a jacuzzi or other luxury type extras. I know of two people that are very successful doing this, though they are rehabbing homes over 1MM, investing $100-$200K and then reselling.
Multiman has the right idea. I also have equity in my current home ($100K) and I have located a commercial lender that will go 90% with a 680 mid FICO.
I think there are many advantages to multi family investing. First of all, it should be obvious that you need to buy right. Double digit CAP rates, 9-10 x NOI or better, 1.2 DSCR or better, and look for something that you can add value to.
If you can locate an emerging market or a stable one, you may find a great deal on a property with high vacancies, in need of repair, and poor existing management. Just imagine how quickly you could turn something like this around with a competent management company and value added amenities such as landscaping, painting, added storage facilities, wireless internet, etc. thus higher rents.
This is dependent on location of course but you could also collect rent from a billboard or a cellular antenna. You could use creative marketing techniques to lure tenants away from other buildings in the neighborhood.
Also, when you do have vacancies it is only a small percentage of your income, not 100% as with a SFH.
Though I am investing in several SFH’s (discounted precon’s with L/O T/B to minimize risk and costs, all done with 100% financing) out of state of course.