Strategy to purchase and flip property in Los Angeles

[KJ L.]

Hey BP, 

So I live in Los Angeles, land of Rent Control.. There are rent control buildings that have hit the market and they sit for a really long time because either the seller doesnt want to the reduce the price enough to cover the cost of eviction (usually $30k per unit) or buyers want the property delivered vacant which drags out the RE transaction process.  In South Los Angeles, there are once-beautiful craftsman style duplexes and triplexes that resemble a large single family home (units are on top of each other and not side by side) and there are two of these down the street from us. 

My understanding of rent control is that you can you evict tenants to remove properties from the rental market in California via Ellis Act. After doing some researching this is what I've found: 

The “Ellis Act” is a state law which says that landlords have the unconditional right to evict tenants to “go out of business.” For an Ellis eviction, the landlord must remove all of the units in the building from the rental market, i.e., the landlord must evict all the tenants and cannot single out one tenant (for example, with low rent) and/or remove just one unit out of several from the rental market. The Ellis Act is included in the just causes for eviction under the Rent Ordinance.

Ellis Act evictions are for the purpose of going out of the rental business. Ellis evictions are used to convert rental units to condominiums, using loopholes in the condo law. Also, Ellis evictions are used to convert multi-unit buildings into single family homes.

So here is my question: Has anyone in Los Angeles or in California used Ellis Act to evict/remove a multifamily property to convert into a rehabbed SFR to sell or occupy? Has anyone conducted Ellis Act to convert the property into condos? Can you describe the process and/or timeline? Thanks in advance!