Section 8

[Lauren A.]

Hello fellow BP members- I am hoping to get some words of wisdom from someone who has dealt with low income and/or rent controlled areas. I am in escrow currently on a massive 4 unit apartment building near USC. There is a 5 bedroom house in the back and a triplex in the front (totaling 9 bedrooms). I saw the square footage on this one and thought it was an amazing deal ... before I crunched the numbers of current (not prorated) rent. Since its rent controlled, the units are below market. What concerns me is the back house that's going for 1600/m and should be going for at least $2500. There is great cashflow using the prorated methodology, but using current rents the cash is modest at best. Another tenant has told me she MAY be looking for another place. She's lived there for 10+ years and receives section 8. How would you approach this? I was thinking of offering her a vacant unit in another building I own or simply paying her (don't really like that option). Has any of you encountered this problem before?! Thanks so much in advance!!

[JC Conchas]

auren A. Inves

Lauren A.

The Rent Stabilization Board (formally Rent Control Board) is terrible for landlords. They are against property owners and property owners rights. The tenant has all the rights. Read up on the rules and regulations of the RSO. If you handle something wrong, the RSO will send you a letter and may refer the matter to the State Attorney office. 

We inherited a property covered under rent control, that we didn't know was. If we did we would have sold it. But when we gave the tenant 60 day notice to move, they reported us to RSO who, sent us a letter and found out had to pay them $7800, in relocation costs, to move out. We wanted to move in, still had to pay them. Even when we sold the property, that is not a "legal" reason to evict someone. So we did pay them to move $7800 then fixed the place and sold it. 

The amount of relocation costs you have to pay to buy someone out, it's called "cash for keys" depends on how long they have lived in the unit. If the tenant is OVER 60, you can not force them to move under any circumstances.  Except of course doing something illegal, against the law. But it's very difficult.

God luck, read, read, and read some more.

JC

auren A. Inv