All Forum Posts by: Daniel Hynes

Problem 2 is solved thank you guys. Definitely is all permitted & locked in with the city. LA County assessors portal shows 3 units, number of gas and electricity meters is 3. Thank you for the pointers. 

Problem 1 remains a concern of mine. I'm wary of banking on annual rent increases. Interested in what you guys think.

Hey gang! 

First deal I've ever analysed. First potential RE purchase. First ever forum post... It's all terribly exciting and yet I'm sure I'm overly exposed to risk/exploitation as such a newbie. 

Problem 1: Low Current Rent + Rent Control 
As I look deep into this potential triplex, I see that current rents are way below market levels but I am in rent controlled Long Beach, CA. I can only legally increase by 5% + (% increase in cost of living), capped at 10% total. What I have thought of so far is to go way below asking and additionally bank on raising rents 5-7% every year until the cash flow becomes meaningful. What approaches do BPers have for this situation of underpriced rents?

Problem 2: Zoning Breach 
I dug into the city zoning codes and it looks like in this zone triplexes are not allowed! Zone is CNR in Long Beach, CA. I imagine this might be a source for leverage if approached correctly. I am not a unit short legally since the building is divided into 3 units, 1 becomes obsolete! So... what approach might I take in negotiations with the seller? Does this zoning issue have other significant implications for me as the potential landlord?

I appreciate you all and look forward to any and all thoughts you have to share with me.