Our goal is to convert it back to a 3-4 unit property for long-term and short-term rentals.As I currently reside in Washington DC, I'm unfamiliar with the local permit processes and requirements.

However, the initial costs for land, labor, materials, and permits can add up.

Two contributing factors are high construction costs and regulations that make obtaining a construction permit difficult.California already has a large housing shortage.

I also check county and city records for rent permits and any major repairs.

This building needs to be checked out to see if it has all permits to have 10 units and 3 commercial storefronts.

I would start here to see that people are coming to the area and not be as worried with why.I'd also confirm what you need to operate legally such as any permit requirements.

I also had to get a permit from the city.

@Bob Stevens - Thank you for taking the time to reply.The same can be said about many markets, so I want to ensure we see the same thing.If you look at the increase in rental prices, the lack of supply, and the increase in building permits, you could say there is an opportunity here.

I was scanning through permits pulled from county website.

So you and/or your partner will need to have an unlimited residency permit (Niederlassungserlaubnis).From what i can tell of the residential property market, the cap rates are very low (3% range) and the rental income doesn't cover the mortgage costs often times.