CA prop 10 opinions

[Jonathan Taylor]

Hi BP folks, I live in Los Angeles and have been putting offers in for fourplexes but prop 10 has me wondering if I SHOULD by as big as I planned. For those who don’t know, prop 10 would limit landlords ability to raise under market rents and basically cut landlords at their knees. So my questions are: 1. For existing socal landlords, what is your opinion on this bill and what are you doing to mitigate risk IF it passes? 2. Should I stay small, buy a duplex and move my money OOS or continue and hopefully close before/if it passes? Any and all thoughts are welcomed. Thanks JT

[Alex Vidal]

The Prop 10 polls aren’t looking good for the Yes vote. My company’s various business arms have been pumping millions into the No side and it’s working because the Yes votes have no real logical argument other than short term benefits for current renters. If you’re familiar with SF apts it’s a prime example of what happens when you get rent control - crappy buildings/obsolete units and insane market rents that are artificially inflated by rent control.

The thing to watch out for if you own commercial deals (5+ unit apts too), is on the 2020 ballot they’re going to have a vote to separate prop 13 so commercial deals are no longer protected. This bill is very likely to pass since the typical mom and pop owners who own smaller buildings/single family homes will still be protected.