Investment Property in Los Feliz Village

Survey status on the Vermont row. The City's SurveyLA identified the Los Feliz Village Commercial Historic District as a linear grouping of about 15 commercial buildings on the east side of Vermont Avenue between Franklin Avenue and Hollywood Boulevard. Twelve of the fifteen contribute to the district. The period of significance runs from 1920 to 1959, and the land was subdivided in 1904. The Los Feliz Theater, an Art Deco movie house that opened in 1934, anchors the row. A building on that stretch may appear in the survey as a contributor. That is a finding the City recorded, and it belongs in your review of the property.

Designation is a separate list. The City's Historic-Cultural Monuments list names two sites on North Vermont Avenue. The Moreton Bay Fig Trees are HCM No. 940, and the Disney Brothers Studio site at 1748 to 1756 North Vermont Avenue is HCM No. 1308. A survey district and a City monument are different things, so we confirm a property's status on the City's own list rather than on a listing's description.

The Mills Act. The City's Mills Act program has been its primary financial incentive for historic preservation since 1996. A contract runs for a revolving 10 years, renews each year and passes to new owners. The City's 2019 info brief says a qualifying property is a designated Historic-Cultural Monument or a contributing property in an approved Historic Preservation Overlay Zone, and that a contract property is assessed by an income approach rather than the market approach. New applications carry value caps of $1.5 million for a single-family residence and $3 million for multifamily, commercial or industrial property. Above the cap, an exemption and a Historic Structure Report are needed. For an income property the income approach is worth understanding closely, and your CPA should read any contract with you.

Measure ULA. The Village is inside the City of Los Angeles, and Measure ULA applies to documents conveying real property in the City above thresholds the City adjusts each year. It is charged on the whole value rather than the part above the line. Our explainer on what Measure ULA is covers the current thresholds.

A 1031 exchange. Since 2018 an exchange covers real property held for business or investment only. The replacement is identified in writing within 45 days of the transfer and received by the 180th day, or by your tax return due date with extensions if that comes first. Property in the United States and property outside it are not like-kind, and a California property exchanged for one in another state requires Form FTB 3840 each year until the gain is recognized.

This section explains how these rules work. It is not tax or legal advice. For your own situation, talk with your CPA or attorney as well.

• The address sits inside District C. Check it against the neighborhood council edges rather than the listing headline.
• The property's status on the City's monuments list, and whether it appears in the SurveyLA district on Vermont Avenue.
• Any Mills Act contract, read in full with your CPA, along with the value caps and the income approach to assessment.
• Your 1031 dates, confirmed with your CPA before you tour so a short list is ready when the 45-day clock starts.
• Permits and plans for past work, because a property on land subdivided in 1904 has a long paper trail.
• Measure ULA against your plan, since the tax applies to conveyances in the City and is figured on the whole value.
• The offer terms. The initial deposit is about 3% of the price and is held by the escrow company. Brandon typically writes an inspection period of 7 to 10 days, set in each offer, and you use it for inspectors and documents.
• The closing path. Purchases in Los Angeles close through escrow and title companies, and no attorney is required at closing.