Los Angeles Rent Control

[Chris Collins]

I’m about to go under contract on a deal in the city of LA. It’s a 4-plex with month-to-moth leases in place with well below market rents. The seller insured me that he can deliver the building vacant at COE, which would allow me to mark rents to market without buying out any tenants.

What should I be concerned about here owning a rent controlled property if I can raise rents after doing a rehab by 50% in year one. Obviously, we have to be careful about CPI adjustments but what am I missing?

Appreciate everyone’s help here.