All Forum Posts by: Bryce Lowe-White

I'm in escrow on a property in San Pedro and I'll be inheriting more tenants than are on the lease agreement in 2 of the units. Looking further into the RSO I see that you can raise 10% per additional tenant not listed on the original lease. But the exceptions are dicey. These tenants have occupied both units prior to this amendment (effective 2011) and the amendment states that if the tenant wasn't notified 60 days from the amendment taking effect it does not apply. The seller claims to have only collected rent each month and has no knowledge of the number of tenants occupying the units. So how does that register under "constructive knowledge" (see below)? If you can decipher the amendment and have any insights into my particular situation please let me know.

G. For a rental unit which has an additional tenant joining the occupants of the rental unit thereby resulting in an increase in the number of tenants existing at the inception of the tenancy:

(a) The landlord may increase the maximum rent or maximum adjusted rent by an amount not to exceed 10% for each additional tenant that joins the occupants of the rental unit, except as follows: 

(i) This Subsection shall not apply if the landlord had actual or constructive knowledge of the additional tenant's occupancy of the rental unit for more than 60 days and has failed to notify the tenant of the increase pursuant to this Subsection; 

(ii) If the additional tenant joined the occupants of the rental unit prior to the effective date of this amendment and the landlord had actual or constructive knowledge of the additional tenant's occupancy of the rental unit prior to the effective date of this amendment, the landlord shall not be able to increase the rent pursuant to this Subsection unless the landlord had notified the tenant of the increase within 60 days of the effective date of this amendment; 

(iii) This Subsection shall not apply for the first minor dependent child (or first minor dependent children of a multiple birth) added to an existing tenancy. 

(b) The rental unit shall not be eligible for a rent increase until the additional tenant has maintained residence in the rental unit for a minimum of thirty consecutive days.

@Kiersten Vance

@Tim Ryan

I'm definitely looking for below market value single family opportunities. I've been saving for over 2 years as I've seen the market climbing at the same pace. I definitely see your perspective, Tim. Ironically the best deal I've come upon just went up on the market 2 days ago. Good neighborhood too. I put in an offer but Its insanely competitive right now for deals in this area. I've had 3 offers fall through already so we'll see what happens. This one is an old home with great bones. Fingers crossed!

I would love to hear some of your buy and hold success stories in Southern California. Whether it was an investment or you lived in the property I would love to hear where you bought and when. What neighborhoods were ignored / thought to be too rough / no hope / not safe / etc. but that you believed in and led you to a big profit as the area changed and became desirable.

I bring this up because I was talking with an older friend yesterday about trying to buy my first house this year. I live in San Pedro (Los Angeles) and see some great potential in the next 5-10 years in the neighborhoods surrounding the waterfront. But currently, it is a rough neighborhood down there.

My friend told me he bought his first house in Belmont Shores (Long Beach) for $250k a while back following a gut feeling that the area was going to turn around. It was a rough neighborhood at that time. He didn't say how long he held it but he raised his family there as the town turned around and ended up selling for over $750k 5 years ago. He said the neighborhood is in the $900k range today!

Interested to hear what people have done in the past in Southern California and where they are seeing opportunity in the future. Also if you experienced the opposite - buying too early / failed attempts / big losses - please share!!

@Steve Bracero

We know the tenant is paying $1335 a month so Tenancy at Will would not apply, right? From what I understand that only applies to unpaid tenancy. No further details yet on any terms of the "lease".

In doing some research it sounds like the tenant is still protected under rent control here in Los Angeles. Even with no formal lease he is assumed a mtm tenant since he is paying rent. I plan to draft up a new lease with my terms when I inherit.

@Christopher Phillips

@Mike McCarthy

Thanks for the feedback. I'd like to stand firm or I hear Mike's suggestion to throw it back in their court and counter back $5k under. I'll make sure to specify needed rehabs - windows, kitchen (possibly), floors. I am certain list price is overvalued with the rehab. Also we are pretty sure from just looking that the electrical panel will need to be updated. If costs add up significantly after inspection I'll likely back out of the deal anyways.

Owner is an out of town investor with a specific number in mind, especially because they had an offer at list that fell through. The sale is also contingent on 1031 exchange. Seller still needs to locate another property. I need to read up more on how that all works as well. My agent mentioned something like they have 90 days from our accepted offer to find a property. Anything you can share from experience with 1031 exchange?

@Christopher Phillips

Thanks, that is pretty straight forward. I believe the list price is slightly overvalued compared to the comps in the area. Many comps sold for below list and this one needs more rehab than the comps. That said I think I should stand firm on my original offer, $10k under list. Have you ever seen this work out for the buyer? I guess it all depends on the situation, right.

No, seller will not pay to relocate the back unit. Actually she already paid to relocate the front unit as part of a previous offer. Buyer last minute demanded the back unit be delivered vacant as well, seller refused, and buyer dropped the deal.

I know its not ideal to buy occupied but I like the immediate income it will generate and I will be living in the front house which is well removed and private from the back unit . Did you have a bad experience with a tenant occupied property in LA? Any response to my original questions?

I came across a property I really like but there is no doubt some work needs to be done. Its an almost all original 1925 craftsman bungalow. I was late to the game initially and they took another offer at list price but the buyer fell out of escrow shortly after. Considering that and the work that needs to be done I put in an offer $10k below list price. The seller is countering back at list. I am the first offer since the first fell through. The agent is sure the seller will accept my offer at list price. At this point, I just want my offer accepted so I can at least look further into what needs to be done and get an inspection.

My main question - If you know work needs to be done on the property is it better to factor in rehab costs into your offer price or should you offer list price and then ask for credits for rehab costs?

I have an accepted offer on a Los Angeles duplex in a rent controlled area. The front house is vacant. The back detached studio is being sold occupied. Neither the landlord or the tenant can provide a copy of the current lease for the detached studio... they are both claiming it is lost. The tenant is a friend of the landlord and I'm guessing it was probably just a verbal lease.

My main question - is the tenant protected under rent control if there is no hard copy of lease to be found? The tenant is pretty messy so I was considering paying the relocation fees to get him out. Now I'm wondering if this may save me from having to pay to get him out of there. Looking for some advice and if anyone has any ideas on the best way to proceed here?

I've been listening to the podcast and really think there is some opportunity in the next 5 years in my local market here in San Pedro. I am excited to join the community and share my thoughts! I am a 27 year old photographer and film maker. I have been able to put away some money this year and hope to find a good investment to help my money grow and have steady future income for my family. Im looking to BiggerPockets to learn the ways of real estate investing, be smart with my savings, and invest it in the right deals. Real estate is something I have been interested in for my entire life. My dad was an investor and now I am eager to take action and get into the market myself. I plan to use BiggerPockets as a place I can share ideas, find/share opportunity, and collaborate with like-minded people.