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All Forum Posts by: Dan H.
Dan H. has started 29 posts and replied 6209 times.
Post: New land lording questions

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Joel Carmona:
I have a quick question ... I'm a first time landlord who is getting ready to rent out my first property .
I am having trouble trusting documents found online for rental agreements .. tenant applications ..tenant landlord notices .. etc
anybody have a reputable source that I can utilize and be protected ?
Are you BP pro member? If so, they have forms for each state. https://www.biggerpockets.com/landlord-forms
If you are not a BP Pro, the large RE networking groups often have forms appropriate for their jurisdiction. Joining one of these can get you the forms you desire as well as a network of local investors (vs BP is national with a smaller presence in most jurisdictions). They also have regular meet ups on various topics. They also can get discounts at various retailers. It is definitely worth joining at least one (I am currently a member of two and used to be a member of 3 (cca, sdstr and used to be member of sdcrei).
Good luck
Post: Re renting a single family house

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Michael Riba:
I’m an out of state investor and I’ve owned a house in Indianapolis for over five years. It recently became vacant. Can anyone give me information about how long it should take my property manager to turn the house around for re-renting it? It’s been 6 weeks or so, and I’m getting very little information from my property manager.
Should I be looking for another property manager?
I do not know the condition of the unit but6 weeks for a tenant flip is a real long time. It is rare for my tenant flips to take more than 2 weeks.
>Should I be looking for another property manager?
yes. Not necessarily because it has been 6 weeks but a PM that does not communicate has to be replaced. I also suspect they are spread thin and that the tenant flips is taking much longer than it should. Seeing the tenant flip is not complete, you have zero idea of how long your unit will take to find a qualified tenant. In addition, if the PM does not have the means to do a quick tenant flip, what confidence do you have that they will properly vet the tenant?
this is from @nathan gesner on how to find a good PM:
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.
1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start.
good luck
Post: Sacrificing my pandemic era mortgage rate for a crazy cash out refinance offer

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Daniel K.:
During the pandemic, I bought a 3-unit house hack on the north side of Chicago for $580k with a 10% down portfolio loan through a local credit union. I renovated it, moved out, and it's since been a great investment, now cash flowing significantly with a 3.625% 30 yr FRM. Earlier this week, I got an email from the credit union holding the loan with an unexpected offer. They are willing to allow me to cash out refinance the property with a 30 yr FRM at 5% at up to 90% LTV. A recent comp sold that leads me to believe a reasonable valuation for the property of $800k. My loan balance is about $485k. These terms sound almost too good to be true, the catch being that I need to replace my rate with one nearly 140 bps higher (which is still significantly below market).
Were I to refinance at 90% LTV, my cash flow would evaporate entirely, and I might be slightly cash flow negative until next year when I can raise my below-market tenants’ rents to market, at which point I’ll be modestly cash flow positive again. But at the same time, I will have $235k tax-free in my bank account to put towards another deal which I intend to be cash flow positive. That same amount of money would probably take 10 years to earn via cash flow, and even then I’d have to pay tax on it.
What are the risks of taking this offer and leveraging up again? 140 bps interest rate increase doesn't seem all that bad. I know home values have been softening across the country, thankfully Chicago still seems to be going strong (at least for right now). Should interest rates drop below 5% for conventional mortgages, I know I can't refinance down if my LTV is too low, but other than that? Thanks.
I want to correct that this extraction of vale would be tax deferred and not tax free. Granted you can forever defer (own to death, 1031), die, get stepped up basis and never pay the tax.
Now to your question, for me this is an easy decision. I have 100% confidence that I can achieve far better than 5% return with $235k. Any return achieved above the 5% is return you would not be achieving without the refi.
In addition, with the lower equity position, your return from appreciation is increased. You have achieved $220k of appreciation so far but with the initial 90% LTV, the return is significantly amplified. A the equity increases, you return on equity (ROE) diminishes.
Final arguement is that cash flow is taxed annually. Extracted cash is tax deferred and if done correctly no tax will ever be paid on this extracted cash. Obtaining cash tax deferred and minimizing the annually taxed cash flow should be a goal.
Before the rates rose, my goal was to maintain higher than 70% LTV across my properties. It was a challenge. This extraction of capital to maintain a high LTV provided capital to continue to increase my net worth while simultaneously keeping my tax low. This is exactly what I was striving to accomplish. Unfortunately no one has made me a similar low interest loan offer and my LTV is lower than what I desire and my cash flow is higher than I desire but I used accelerated depreciation to reduce the tax on the cash flow (so I still paid virtually no tax on my cash flow). If I had that loan offer, I would jump at the opportunity.
Good luck
Post: Is low credit score acceptable?

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Eli Jean-Gilles:
Quote from @Dan H.:
Your PM gets paid for placing a tenant. They are incentivized for taking any tenant.
I personally would not rent to even your 620 minimum. Double deposit means $hit. How do you think you will be able to collect if they cause $10k damage and do not pay rent for 2 months.
What gives the LL leverage is the ability to ding the tenants credit score. If their score is already $hit, the LL has no leverage
It is better to accept lower rent to obtain a well qualified tenant than to obtain top of market rent to obtain a $hit tenant.
I have had rentals many years in class c to B+ and I have never paid cash for keys or had a tenant fail to pay any significant amount of money. This is both luck and our good screening. This screening includes ensuring that the tenants credit score is high enough that dinging it will have consequences to the tenant.
Good luck
@Dan H. how do you ding their credit score without them opting in to credit reporting?
I would send to collection agencies that ding the tenant’s credit. Last I checked (which has been quite a few years) both Rent Recovery Service and AOA Debt Reporting Service had the option to report to credit agencies.
Good luck
Post: Is low credit score acceptable?

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Hannah Liu:
Quote from @Dan H.:
Your PM gets paid for placing a tenant. They are incentivized for taking any tenant.
I personally would not rent to even your 620 minimum. Double deposit means $hit. How do you think you will be able to collect if they cause $10k damage and do not pay rent for 2 months.
What gives the LL leverage is the ability to ding the tenants credit score. If their score is already $hit, the LL has no leverage
It is better to accept lower rent to obtain a well qualified tenant than to obtain top of market rent to obtain a $hit tenant.
I have had rentals many years in class c to B+ and I have never paid cash for keys or had a tenant fail to pay any significant amount of money. This is both luck and our good screening. This screening includes ensuring that the tenants credit score is high enough that dinging it will have consequences to the tenant.
Good luck
Thank you. How long are you willing to wait if you can’t find a qualified tenant? Would you consider adjusting your criteria? I can cover expenses without rental income for a few months, but I’m unsure when I should relax my requirements.
I would reduce rent before I would lower my tenant qualifications to the level the PM is advocating. Poor tenants can cost thousands, even 10s of thousands. More than that they can create extra drama. Late rent payments and the resulting effort. Drama between tenants.
Not sure of the source of @Marcus Auerbach numbers, but I am convinced there is a relationship between credit score and both delinquency and default. If the numbers he provided are accurate, the 580 credit score has a 22.5% chance of default. I suspect the delinquent rate is noticeably higher for this credit score.
When you evict the tenant (22.5% chance according to the stats provided by Marcus), what will be the incentive for the tenant to ever pay what is owed? Do you think he will care that his credit score drops from the bottom 15% to the bottom 10%? You have a near zero chance of collecting any money owed after an eviction.
Why would you desire a tenant that is bottom 15%?
Lower your rent as necessary to place an adequately qualified tenant. Our minimum credit score in low class b and class c is 650. We require 675 minimum in class b and b+. We virtually always place a tenant in our initial open house, but our market has a shortage of decent housing. I also regularly get sob stories about virtually all of our tenant requirements. This includes various excuses. The most common for poor credit score is blaming the ex. Sometimes it is student or medical debt. There is always an excuse other than they have not been as financially responsible as necessary to warrant a better credit score. I do not care what their excuse is.
Good luck
Post: Renting to illegal immigrants , rent control

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @James Hamling:
Quote from @Dan H.:
Quote from @James Hamling:
Quote from @Becca F.:
Quote from @Dan H.:
Quote from @Bill B.:
Ps. California has a “2+1 rule” meaning 2 adults per bedroom plus 1 extra adult. I don’t know if they’re breaking the law or you are. But I’m sure you’d be held responsible if something happened because of illegal overcrowding in a property you owned.
You are interpreting the rule incorrectly. That is the lowest max occupancy that seems commonly enforceable in the state even though finding a law that specifies this is a challenge.
However, if your lease does not state a max occupancy (which cannot be lower than (2 * BR + 1) the tenant can place 5 in a single BR.
@Frederick William does you lease have a maximum allowed occupancy? It could provide means for a lease termination. It may sound mean, but 2 years ago I let a good tenant go because of a growing family. They were about to go 2 over what my lease allows (and I gave them a warning when they went 1 over that I would not be allowing 2 over). 7 in a 2 BR was too many people. 5 in a 1 br is also 2 over my max occupancy. You may have an issue enforcing this even if you have a limit in your lease because they have had 5 for quite a while.
I am assuming your unit is a MF because single family home is exempt from rent control (costa Hawkins).
Other options to break AB1482 (not sure if you have stricter local ordinance) are 1) move in a close family member. Ab1482 is not clear on duration but locally (San Diego) is interpreting it to be for a year. 2) renovation extensive enough that tenant cannot reside in unit through the effort. Abatement works. Take down textured ceiling may suffice if it has asbestos. City of San Diego explicitly states flooring replacement without abatement and painting does not suffice. Find out what your jurisdiction dictates as requiring tenant vacating but I am fairly certain pulling down asbestos texture is will suffice.
If you do not desire these, then abide by the rent control increase. In San Diego it is 8.6% for the current period. Seeing it is based on local inflation rate, your max increase will likely be slightly different.
Good luck
This is good to know about the maximum allowed occupancy stated in the leases.
On the rental increase, you mentioned for San Diego is 8.6%. Is that for multi-family?
What I'm understanding is that there are two definitions of rent control:
- Strict "local" rent control: can't raise rent more than 1 to 3% (whatever the local number) is on multi-family if local law is stricter than California law
- "California rent control": can't raise rent more than 5% + CPI (maximum of 10%) including on single family. This is what local investors told me about SFH rental. I could raise the rent 8.8% (see chart in link below). I can't raise the rent 20% (not that I would do that) on existing tenants.
I found this chart which calculates maximum rental increase in different counties (I don't know anything about this site and their services but I thought the calculator was useful).
https://www.fastevictionservice.com/cpi-rent-increase-calcul...
In the chart it says 8.9% for LA county from August 1, 2024 to July 31, 2025. I don't know if LA has a stricter local rental law so OP should ask an attorney or the LAHD.
I'd be curious to know, does CA or San Diego or really anyone have a chart telling McDonalds the maximum they can increase the price of a quarter pounder and fries?
Or maybe instructing Valvoline on the maximum they can increase price of an oil change?
Or how about a mandate imposing a cap on what Costco can increase price of groceries.....
Why is it an accepted notion in USA that government get's to instruct Landlords for what there pricing is to be yet virtually everything else in life, the food you eat, the things you drink, the fuel you need to get to and from work, that can just run buck-wild because "it's the market".......
Why is rental real estate considered a special carve-out from all other commerce and economics?
Why do so many people buy into the BS and allow such economic lies to persist.
Free market economics applies 1,000% to rental housing exactly as it does to hot dogs. If the vendor over-prices for market price acceptance they won't sell, and will be pressured by the market to reduce pricing or increase offering.
Manipulating the market will ALWAYS create problems. Service and product declines, supply constricts, it's a manufactured problem. It's solving a "problem" by generating a bigger more pervasive systemic problem.
People need to stop choking down the BS and lies like good little quiet sheep and SPEAK UP and OUT on the lies of it all.
I think Most LL agree with your sentiment and as a LL I definitely agree but I will attempt to answer you question.
There are many more tenants than LL. In addition many cities have severe housing shortages. San Diego has had property appreciation of near 6% annually since the year 2000. Remember this period includes the GFC. If you eliminated the GFC, the appreciation would be much greater. Wages have not increased anywhere near that rate. If rents increased at similar rate the already large homeless problem would be larger. So politicians 1) pander to the masses 2) can state that rent control reduces homeless.
As a LL here are some of my issues: 1) rent control only works if tenants have lifetime rights to the unit. That is crazy. 2) when rent control first goes into effect, it is applied to existing leases. This is in effect having government universally changing contracts between 2 parties that was entered prior to any rent control with a lease end date? What if I planned to have a friend move in at the end of the lease 3) mostly it hurt “soft” LL that had let their rents get far below market rent. These generous LL must continue to accept reduced rent, but in addition when they go to sell they will not get market offers due to the lower income/rent that is enforced by the rent control.
Note, I think it is rare for market rent to increase more than STR state wide maximum rent increase. However, if your rent is below market rent, this max increase may not catch up at all with market rent. In addition, there are jurisdictions with far stricter rent control regulations than the state wide regulations.
Rent control benefits only a few good tenants. It greatly benefits poor tenants as it is difficult to get rid of poor tenants. Rent control can lead to blight. Our policy is we only do upgrades with tenant in place necessary to not cause excess damage. I have a tile floor in a unit that the tiles are popping up through no fault of the tenant. I would replace the floor if I could increase the rent to recoup the expense. This unit has been getting max allowed rent increase yearly. Our policy is no new floors, interior painting, vanity replacement, etc if the rents cannot be raised to recoup the expense.
The tenant tolerates the flooring issue because they recognize their rent is below market rent.
I personally believe rent control is mostly passed by politicians to appease their tenant constituents and not because it is good or fair.
Good luck
I come at this not from a LL point of view but from the "Nerdy Nerderson of Finance-Econ with minor in Sociology".
The first lie, that rent control is a NEED item.
Stop and think it through, how is it a need? This ties right in with explaining the desire for allow illegal immigrants, because they both come from the exact same motive.
Rent control is a mechanism of POVERTY. To continue, encourage and entrench poverty.
A certain political club telegraphs there desire in this, it just seems nobody listens.
They say these impoverished and dependant persons are NEEDED, so that then "they" have dishwashers, janitors, the lowest crappiest rung of labor employment filled at the absolute lowest prices imaginable.
Notice they never explain why a person would choose to be a dishwasher for life, or stay impoverished forever, nor speak about those peoples quality of living at the lowest rung of life possible.
The entire system is literally designed, by intent, as a conveyor belt of modern age indentured servitude.
To keep a person impoverished where they can't afford to exist in the prevailing market system, so they get via other peoples money (tax payors) off-set's. Supplements.
Notice how all of every program never has any design to elevate and improve a person, to grow one self beyond the need for such. No, it is constructed to keep ones existence at that lowest tier of the pyramid.
And it's done via middle Americas money.
It is a modern slavery system, it is.
And the moment anyone threatens this system they cry out "but who will wash our clothes, mow our lawns, cook our food...." sound familiar.
They never speak 1 word about what about the people, there kids, there family, the community living in persistent poverty. No, because they LIKE poverty, poverty is great for them, it keeps a healthy pipeline of cheap labor.
Cheap via taxing middle America to pay the difference to keep them close by and in geographic region for those seeking to use, extort, and profit off them.
It's not like climate change where there was some debate to be had between the sides, there is 100% consensus of the economic and sociological FACTS of what these actions do, as well as countless years, decades and generations of case studies to look to. These systems are factually known to create generational poverty, dependency and with that crime, disparity and so on.
Am I surprised that the ones at the forefront arguing for such poverty-mechanisms are the same ones who fought to retain a Monarchy in America in league with plutocrats..... Lol, that's like saying am I surprised when a cat try's to eat a mouse.
There weapon is GUILT.
Because this entire system requires Other Peoples Money, it requires middle America to flip the bill for it all and to keep deaf, dumb and blind to it's reality.
They achieve this via GUILT. Selling a false narrative of GUILT.
Every school of economics on earth shines a spotlight on how every law and principle of economics is clear that these actions do NOT produce anything good and they are interrupters to the very working of free market economics.
The very design of this economic machine is one in which government is to get involved ONLY and if there is an event that occurs that breaks how free market economics works. All of these instances are finite in there duration.
For example the CA wild fires.
This would be an instance for stepping in a creating a short-term "bridge", not to replace but to BRIDGE the gaps that were created from the sudden loss of parts and pieces from the economic engine.
Special financial assistance and loans to rebuild, survive rebuilding phase, short-term housing supplements and units, things like this.
Instead what we have is the BS lies that eternal supplements to KEEP people impoverished is somehow "good" for anyone except the highest tier exploiting such persons and situations for their gain at expense of literally everyone else at every other level of the pyramid......
All of these things are not needed, there desired by an elite class to protect and retain their elite status. It is. Because remove of such the existing middle class would get far stronger and would grow in size significantly, and thus in it's power and influence. And the #1 threat to elite is a strong middle class. Because reality is middle does not need the elite.
As they said back when the notion of "We The People" was presented and the masses voting.... They said the people are not capable of thinking for themselves and require the elite to do the thinking for all of them.
It has taken some generations but the "Loyalists" have usurped the "rebels"......
It's time for all of us to be a lot more Samuel Adams.......
As indicated, I am against rent control. I am especially against applying it to leases in place at the time the rent control is initiated. It is changing a contract (the lease) between two consenting contracts to the benefit of only one of the parties. In addition, the LL could have set the lease end date to a date for a reason such as to move in a friend or that is when I have time to paint the interior, etc. with rent control, the tenant gets to stay as long as they desire (there are a couple of exceptions but in the broad sense the statement is true).
However, rentCafe has the folllowing average rents for coastal Ca cities:
- San Diego: $2981/month, 878’ average size apartment. https://www.rentcafe.com/average-rent-market-trends/us/ca/san-diego/. I will add that all my city of San Diego units have rents significantly higher than this average rent (my lowest city of San Diego rent is $3850)
- Los Angeles: $2779, 810’. https://www.rentcafe.com/average-rent-market-trends/us/ca/lo...
- San Jose: $3074, 883’. https://www.rentcafe.com/average-rent-market-trends/us/ca/sa...
- San Francisco: $3494, 741’. https://www.rentcafe.com/average-rent-market-trends/us/ca/sa...
- Irvine: $3213, 927’. https://www.rentcafe.com/average-rent-market-trends/us/ca/ir...
You do not need to be impoverished to be challenged to pay these rates. I do have 2 contrary comments 1) you get more unit for your money (lower rent) in the suburbs or further from the urban center 2) there is no reason you must live in there cities. There are much cheaper places to live than this cities. If you cannot afford to live in a location, you can move to cheaper areas.
I believe in free market. If rents were not capped, the lowest wages would need to increase so that lower wage workers can afford to have a home to live. Instead rent control places this responsibility on Landlords. If the government wants to subsidize rents, the government should subsidize the rents and not place this responsibility on the landlords.
I also question if rent control has played a role in these high rent points. Making it harder to get rid of poor tenants increases LL costs and risks. Both of these result in the need for higher rents. The good tenants now are charged a rent that compensates for the costs of having subpar tenants that can stay as long as they desire.
Maybe the current Supreme Court can revisit rent control. They have already demonstrated that they are willing to ignore precedent. At a very least, it should be ruled that it cannot be applied to current leases.
Best wishes
Post: How do I use my $200k of equity to BRRR a new property

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @Patrick Roberts:
If your credit isnt good enough for a Heloc, you'll likely have a hard time getting any kind of DSCR or permanent investment financing.
Related to this, if your credit is not good enough for a heloc, how do you plan to execute the refinance part of the BRRRR process?
my next question is why you would be eager to replicate your current situation. $200k equity produces $800 profit is a 4.8%. The S&P has lifetime return near 10% and is much more passive. This is the type of return that can be achieved via money market with virtually no risk or effort. From these numbers, it seems likely a flip would achieve the higher return.
good luck
Post: Is low credit score acceptable?

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Your PM gets paid for placing a tenant. They are incentivized for taking any tenant.
I personally would not rent to even your 620 minimum. Double deposit means $hit. How do you think you will be able to collect if they cause $10k damage and do not pay rent for 2 months.
What gives the LL leverage is the ability to ding the tenants credit score. If their score is already $hit, the LL has no leverage
It is better to accept lower rent to obtain a well qualified tenant than to obtain top of market rent to obtain a $hit tenant.
I have had rentals many years in class c to B+ and I have never paid cash for keys or had a tenant fail to pay any significant amount of money. This is both luck and our good screening. This screening includes ensuring that the tenants credit score is high enough that dinging it will have consequences to the tenant.
Good luck
Post: Renting to illegal immigrants , rent control

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
Quote from @James Hamling:
Quote from @Becca F.:
Quote from @Dan H.:
Quote from @Bill B.:
Ps. California has a “2+1 rule” meaning 2 adults per bedroom plus 1 extra adult. I don’t know if they’re breaking the law or you are. But I’m sure you’d be held responsible if something happened because of illegal overcrowding in a property you owned.
You are interpreting the rule incorrectly. That is the lowest max occupancy that seems commonly enforceable in the state even though finding a law that specifies this is a challenge.
However, if your lease does not state a max occupancy (which cannot be lower than (2 * BR + 1) the tenant can place 5 in a single BR.
@Frederick William does you lease have a maximum allowed occupancy? It could provide means for a lease termination. It may sound mean, but 2 years ago I let a good tenant go because of a growing family. They were about to go 2 over what my lease allows (and I gave them a warning when they went 1 over that I would not be allowing 2 over). 7 in a 2 BR was too many people. 5 in a 1 br is also 2 over my max occupancy. You may have an issue enforcing this even if you have a limit in your lease because they have had 5 for quite a while.
I am assuming your unit is a MF because single family home is exempt from rent control (costa Hawkins).
Other options to break AB1482 (not sure if you have stricter local ordinance) are 1) move in a close family member. Ab1482 is not clear on duration but locally (San Diego) is interpreting it to be for a year. 2) renovation extensive enough that tenant cannot reside in unit through the effort. Abatement works. Take down textured ceiling may suffice if it has asbestos. City of San Diego explicitly states flooring replacement without abatement and painting does not suffice. Find out what your jurisdiction dictates as requiring tenant vacating but I am fairly certain pulling down asbestos texture is will suffice.
If you do not desire these, then abide by the rent control increase. In San Diego it is 8.6% for the current period. Seeing it is based on local inflation rate, your max increase will likely be slightly different.
Good luck
This is good to know about the maximum allowed occupancy stated in the leases.
On the rental increase, you mentioned for San Diego is 8.6%. Is that for multi-family?
What I'm understanding is that there are two definitions of rent control:
- Strict "local" rent control: can't raise rent more than 1 to 3% (whatever the local number) is on multi-family if local law is stricter than California law
- "California rent control": can't raise rent more than 5% + CPI (maximum of 10%) including on single family. This is what local investors told me about SFH rental. I could raise the rent 8.8% (see chart in link below). I can't raise the rent 20% (not that I would do that) on existing tenants.
I found this chart which calculates maximum rental increase in different counties (I don't know anything about this site and their services but I thought the calculator was useful).
https://www.fastevictionservice.com/cpi-rent-increase-calcul...
In the chart it says 8.9% for LA county from August 1, 2024 to July 31, 2025. I don't know if LA has a stricter local rental law so OP should ask an attorney or the LAHD.
I'd be curious to know, does CA or San Diego or really anyone have a chart telling McDonalds the maximum they can increase the price of a quarter pounder and fries?
Or maybe instructing Valvoline on the maximum they can increase price of an oil change?
Or how about a mandate imposing a cap on what Costco can increase price of groceries.....
Why is it an accepted notion in USA that government get's to instruct Landlords for what there pricing is to be yet virtually everything else in life, the food you eat, the things you drink, the fuel you need to get to and from work, that can just run buck-wild because "it's the market".......
Why is rental real estate considered a special carve-out from all other commerce and economics?
Why do so many people buy into the BS and allow such economic lies to persist.
Free market economics applies 1,000% to rental housing exactly as it does to hot dogs. If the vendor over-prices for market price acceptance they won't sell, and will be pressured by the market to reduce pricing or increase offering.
Manipulating the market will ALWAYS create problems. Service and product declines, supply constricts, it's a manufactured problem. It's solving a "problem" by generating a bigger more pervasive systemic problem.
People need to stop choking down the BS and lies like good little quiet sheep and SPEAK UP and OUT on the lies of it all.
I think Most LL agree with your sentiment and as a LL I definitely agree but I will attempt to answer you question.
There are many more tenants than LL. In addition many cities have severe housing shortages. San Diego has had property appreciation of near 6% annually since the year 2000. Remember this period includes the GFC. If you eliminated the GFC, the appreciation would be much greater. Wages have not increased anywhere near that rate. If rents increased at similar rate the already large homeless problem would be larger. So politicians 1) pander to the masses 2) can state that rent control reduces homeless.
As a LL here are some of my issues: 1) rent control only works if tenants have lifetime rights to the unit. That is crazy. 2) when rent control first goes into effect, it is applied to existing leases. This is in effect having government universally changing contracts between 2 parties that was entered prior to any rent control with a lease end date? What if I planned to have a friend move in at the end of the lease 3) mostly it hurt “soft” LL that had let their rents get far below market rent. These generous LL must continue to accept reduced rent, but in addition when they go to sell they will not get market offers due to the lower income/rent that is enforced by the rent control.
Note, I think it is rare for market rent to increase more than STR state wide maximum rent increase. However, if your rent is below market rent, this max increase may not catch up at all with market rent. In addition, there are jurisdictions with far stricter rent control regulations than the state wide regulations.
Rent control benefits only a few good tenants. It greatly benefits poor tenants as it is difficult to get rid of poor tenants. Rent control can lead to blight. Our policy is we only do upgrades with tenant in place necessary to not cause excess damage. I have a tile floor in a unit that the tiles are popping up through no fault of the tenant. I would replace the floor if I could increase the rent to recoup the expense. This unit has been getting max allowed rent increase yearly. Our policy is no new floors, interior painting, vanity replacement, etc if the rents cannot be raised to recoup the expense.
The tenant tolerates the flooring issue because they recognize their rent is below market rent.
I personally believe rent control is mostly passed by politicians to appease their tenant constituents and not because it is good or fair.
Good luck
Post: BRRRR Method as first property.

- Investor
- Poway, CA
- Posts 6,329
- Votes 7,324
I looked up each profile of those advocating OOS BRRRR
- Kerlous Tadres and his AI generated reply that managed to get 3 upvotes: 3 local purchases
- Bernice Retzloff: 9 local purchases (all since mar 202405)
- Jimmy Lieu: 9 local purchases
- Ryan Rominger: 1 local purchase
- Ryan Rominger: 0 purchases listed
- Ryan Rominger: 0 purchases listed
I recognize not everyone keeps their profile current. My profile is missing my last $4m of value add purchases. However, each of these people 1) do not list a single OOS BRRRR 2) are RE Professiinals (mostly agents) in the markets they are advocating. My point is they are far from unbiased and apparently have not heeded their own advice by having done a single OOS brrrr amongst them.
I have done quite a few brrrr, all local Here are some of my thoughts: 1) they take work and oversite 2) the current brrrr market is significantly more challenging than it was from the GFC until q2 2022. 3) 2 recent reports show that it is cheaper to rent than to buy in virtually every large city market in the US. This implies If you can execute a good value add (already a challenge on a local BRRRR, but more challenging on an OOS BRRRR), then after a high LTV refi you will be cash flow negatively when properly allocating for sustained expenses. 4) where does it make most sense to add value, cheap markets or expensive markets? The answer is obvious if you think about it. If the brrrr is going to cost $0 after the value extract, the price of entry has no adverse consequence. you should choose the market that your value add will add the most value. A year ago on a rehab I added a half bathroom out of existing space. This was in an extreme high cost market (nearly $2k PSF). The comps showed this half bathroom added $59k of value. How much would adding a half bathroom out of existing space add in a low cost market such as Cleveland.
Lots to ponder. By the way I agree with the various posts that recommend a house hack value add where you want to live. Note those people have no financial incentive for this recommendation (assuming they are not an RE professional in your home market).
Good luck