Role reversals are sweet indeed, when the pauper becomes the prince.

A decade ago, many Angelenos complained loudly when Asian investors began spending huge sums to buy L.A.-area properties, form joint ventures and set up offices here.

Now Americans are doing the exact same thing in Asia.

A steady stream of L.A.-based investors, lawyers, consultants and assorted dealmakers are flocking to Asia for some of the best investment opportunities that region has seen in decades. By some accounts, there are more Americans in Tokyo than there were after World War II.

But this time, they’re white-collar professionals, not GIs.

The top-level executives are from some of L.A.’s most prominent firms O’Melveny & Myers, Colony Capital Inc., Houlihan Lokey Howard & Zukin, and Kennedy-Wilson Inc., to name a few.

They are there for one reason: assets are cheap.

“Investment bankers are saying, ‘Where can I get a big return again? Where am I not going to be in danger of buying at the top of the market?’ The answer is Asia,” said Greg Karns, partner in charge of the Pacific Rim Group for L.A.-based law firm Cox, Castle & Nicholson. That firm has benefited greatly by handling the soaring number of Asian real estate acquisitions.

Many of the same lawyers and consultants who a decade ago drummed up business by advising Asian investors on how to acquire L.A. assets are now cashing in by advising U.S. investors on how to acquire Asian assets.

“It’s the same work, but moving in different directions,” said Karns. “(Lawyers and consultants) are like a bridge for the service we provide. What the current situation demonstrates is, you can move both ways on a bridge.”

Few firms have been as aggressive as E & Y; Kenneth Leventhal Real Estate Group, which is now benefiting from its long-established ties to Asian clients.

Since the mid-’80s, Jack Rodman, the firm’s director of Asian Real Estate Services, has produced a yearly report called “Asian Investment in U.S. Real Estate.” Starting this year, however, Rodman is re-titling the report “U.S. Investment in Asian Real Estate.”

So far, the focus of L.A. investors’ activity has been distressed Asian real estate. Action has been especially intense in Tokyo, where land prices have declined 65 percent to 75 percent since their 1986 highs. Bangkok, Singapore, Seoul and more recently Hong Kong have seen similar plunges in real estate values.

“The market is so maxed out in the States. All the properties that had value-enhancement opportunities have been bought. The (real estate investment trusts) ran prices up high. Asia is the next frontier,” said Kelly Miyashita, an L.A.-based asset manager with Goldman Sachs & Co.’s subsidiary Archon Group, which set up a Tokyo office in April. (Goldman Sachs has been joined by virtually every other East Coast investment bank in setting up Asian operations.)

E & Y; Kenneth Leventhal is the only foreign firm hired by Japanese banks so far to facilitate bulk sales of distressed mortgages. E & Y; has been involved in the sale of $10 billion worth of such assets.

More recently, the firm has been hired by the Thai Financial Restructuring Authority, Thailand’s version of the now-defunct U.S. Resolution Trust Corp., which directed the S & L; cleanup. E & Y; Kenneth Leventhal is helping the Thai authority with its sale of 56 insolvent Thai financial institutions that have been taken over by the government.

In many cases, it is L.A.-based investment funds that are buying Asian assets including Colony Capital, an “opportunity fund” that specializes in searching out real estate and other assets at bargain prices.

Chairman Thomas J. Barrack Jr. said his firm plans to increase its Asia investments over the next 12 months from the current $200 million to $1 billion.

“We thrive on volatility, so Asia is very attractive to us,” said Barrack. “One and a half years ago, we decided that because of Asia’s volatility, there was going to be a place for us to supply liquidity (to distressed Asian asset owners).”

Last week, a joint venture of Colony Capital and Beverly Hills-based Kennedy-Wilson acquired a portfolio of about 25 distressed Japanese properties and loans with a face value of more than $40 million.

“We expect it to be the first of many,” said Freeman Lyle, Kennedy-Wilson’s chief financial officer.

Lyle said Kennedy-Wilson has a head start over the competition in Japan because of the relationships it has formed over the nine years of doing business in that country.

“The Japanese are very careful sellers,” Lyle said. “Despite some of the distress going on in the financial system, they’re being careful and cautious and patient. The premium assets will be even slower to go.”

Colony Capital has also teamed up with L.A.-based Oakwood International to acquire and manage apartments in Asia. Under a newly formed entity called Oakwood Asia Pacific, based in Singapore, it will export Oakwood’s concept of extended-stay corporate apartments to Japan, Hong Kong and elsewhere.

“It is a very interesting time to be in the market because the local institutions are frozen,” said Barrack, referring to the cash-short Asian institutions’ inability to take advantage of acquisition opportunities.

Despite the vast buying opportunities, many investors lament the snail’s pace at which deals are cut.

“One of the biggest problems is the lack of (for-sale) product. A lot of sellers aren’t ready to sell or they haven’t figured out how to sell,” said Miyashita of Goldman Sachs. “They’re learning how to sell to non-Japanese investors.”

Added Rodman: “I have to leave each country after a couple of weeks because I’ll start banging my head against the wall because the level of frustration is so high.”

Unlike the 1980s, when Japanese investors were snatching up trophy assets in Los Angeles and other major U.S. cities, the reverse is rarely true.

“In terms of trophy properties, those are owned by large (Japanese) institutions and they trade hands very infrequently,” said Mark Sullivan, a director at Pricewaterhouse Coopers LLP in L.A. who spends about 40 percent of his time in Japan assisting in the buying and selling of assets. Instead, Americans are buying mostly raw land, apartment houses and mid-rise office buildings, Sullivan said.

Ironically, because Los Angeles was once such a popular target, local companies now have an advantage when it comes to investing in Asia.

“By virtue of having a large volume of business (with Asians) in the past, we have a familiarity with doing business with Asia,” said Ken Curtis, managing director of Secured Capital Corp., which opened a full-fledged office in Tokyo a year ago. The firm expects to invest at least $1 billion by March 1999, mostly in Japanese office properties and high-end apartment buildings.

L.A.-area investment banks specializing in mergers and acquisitions are also seeing their business in the region surge. Century City-based Houlihan Lokey Howard & Zukin is even considering setting up offices throughout the region.

“It is our expectation to have offices and local partners across Asia in the future,” said partner James Zukin. “We’re doing a lot of business in Asia right now. We’ve had over 20 teams in Asia this year; it has been very significant.”

Downtown law firm O’Melveny & Myers is also seeing its business in Asia pick up in recent months. It previously had two attorneys based in Tokyo, but increased that number to five in the last year in order to accommodate the increased demand.

“The Japanese office is very actively representing foreign investors looking for real estate,” said Larry Tu, a managing director of O’Melveny who is based in Hong Kong. “It is driving up our volume of business and is responsible for increasing our staffing.”

The L.A. office of Skadden Arps Slate Meagher & Flom also is building up its Asia expertise in recognition of increased opportunities in the region.

Last year it hired Ray Vickers, an 18-year Asia veteran whose past clients include Tung Chee Hwa, the current chief executive of the Hong Kong government.

Led by Vickers, Skadden Arps has been actively seeking more business in Asia. Its latest deal, which closed at the end of August, was to help troubled Indonesian petrochemical giant Polytama Propindo to reschedule interest payments on a $200 million bond issue.

But with the Asian economy still facing the possibility of further deterioration, might L.A.-area investors end up getting burned by investing so much money and human capital too early?

Rodman, for one, warned that Japan is at risk of more corporate bankruptcies, which in turn could cause further insolvency in the banking sector. China, meanwhile, could devalue its currency, sparking a new round of devaluation.

And with most Asian nations slipping into recession, it could take years before investors see a meaningful rebound in property prices, says Otto Wong, head real estate analyst for the Asia Pacific region at Salomon Smith Barney in Hong Kong.

“Investors must have a fairly lengthy timeframe so they can make it out of the 12- to 18-month downturn that I think will come,” Wong said.