Quote from @Patrick Berhan: Hey everyone, I’m looking for some perspective from both property owners and fellow property managers, particularly those operating in high-regulation markets like San Francisco.I’ve been tasked with building and operating an in-house smoke/CO & Habitability inspection program for the units under our management.

Civic INVOLVEMENT. 

Same for 2-years of job/income stability.Tenant Default: 10-20% probability of eviction or early lease termination.Section 8: Class C rents usually meet program requirements, proper screening still recommended.Vacancies: 10-20%, depending on market conditions and tenant screening.Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.Class D Properties:Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months.

I have purchased over 18,000 units of multifamily and have so many lessons and would have done things a lot differently based on what I know now.Real estate can be a risky business due to markets turning, but also because people are involved.

Utilizing CREATIVE strategies can ENHANCE your wealth building, IF you know what the heck you’re doing, but creating an investment program around creative strategies rather than using creative strategies when and if appropriate will at least quadruple the time it takes to build a portfolio, if you’re able to generate enough deal flow at all. 

Some of those complaints have merit and there are clearly bad actors in the space, but many of these situations involve projects that are simply delayed or underperforming, not fraudulent or mismanaged.This all converges on a simple point: it is critical to vet potential LPs before taking their money.

You can still be involved in the process. 

Banks hide it in rate, non-banks itemize it.If you’re trying to avoid big upfront costs, portfolio lenders and some DSCR programs can work well, but they tend to trade slightly higher rates for flexibility and speed.Timing matters a lot with a 1031.

Practically speaking, the path forward usually involves confirming whether the restriction is actively enforced, whether there’s any amendment or variance process, or whether alternative uses (home office, guest space, storage, etc.) make more sense short-term.

Sounds like some really flexible programs.