All Forum Posts by: Elias Barend Westhof

So we have two tenants in our fourplex in los angeles. We want to do a large remodel, but because of rent control the only option of removing them is to pay them $22.000 each in relocation fees. We were therefore planning on doing cash for keys, but I have no idea as to how to go about this. What do you guys think? How should we go about doing this? Do we just go to them and tell things as is? 

Thank you for all replies! 

Thank you for all the answers everyone. I really appreciate it.

The remodel is a complete gut, with changing the layouts of all the units. My estimate of the income was somewhat low, and we can probably look at $3500 each month per unit. Assuming our investment on the house will then be $2.3m, we will pay $11k a month, and have an income of $14k a month, which leaves us with a conservative cash flow of $2k a month. Although I am frankly terrified to agree to this, as I am about to assume $2.3m in debt, the numbers do look somewhat okay to me. What do you guys think of this? 

Thank you!

I know guys. This is what my problem is. They are all dead set on doing this but I do not want to, and I have spoken out about it heavily for months now. I don't know what to do. 

Sorry, currently two of the units are on old section 8 rent, so $1600 and $1000 a month in two of them, third is empty and we live in the fourth. Renovations will gut the entire fourplex and rebuild practically everything. The house was built in the 1920s and is in somewhat decent shape. We are planning on spending $20.000 on removing both tenants to do the remodel, and then get new tenants at market value. Thank you! 

So a year ago me, my wife and her parents purchased a 4-plex in Los Angeles. We payed $1.35m for it. They now want to remodel it for $1m, in order to get $3000 a month from each unit. I, however, think we should rather spend $200k and get $2500 a month from each unit, and spend $400k building an ADU generating 3500 a month. The problem is, I am alone in this, and they are set on going through with the plans as we have payed for the plans and we are ready to begin moving forward with a contractor.

I am panicking a bit, as this doesn't make much sense to me. Could any of you give your input on what on earth I should do? What do you guys think?

Great buy. Do it.

IMO it's almost impossible to buy a good deal in the current market, you have to make the deal good. Any property that cash flows well today will either not be sold by the owner, bought by companies like Zillow, or bought for well over asking price. Don't be too scared from a low cash flow. Appreciation makes it worth it in the long term either way.

 Thank you Jon! 

I'm sorry, but I have a hard time understanding what exactly is meant by primary residence in this circumstance. Is the fourth unit considered our primary residence because it is on the same address?

@Jon Schwartz

Anyways, the fourplex is just north of the 10, off of s la brea ave.

Thank you

I am getting conflicting information online about whether or not it is legal to do AirBNB in LA county, so I thought I would ask you guys. We have recently purchased a fourplex, where two of the units have long term renters, we intend to move into the third, and was considering doing Airbnb on the fourth one. Is this legal under current legislation? 

Thank you for any input.