One thing to consider since you are a California resident investing is the compliance requirements for LLCs incorporated in California or operating as a foreign entity here - the rules here are different than most states.  

Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit.

With no proof required.  

we did this a lot pre 07  in that year Oregon WA and then CA made laws that had lots of teeth about dealing with those in foreclosure.. so we just stopped doing it risk was not worth it.I cant see how an individual can do this really..

Given the competitive market at the time, every property was receiving multiple offers, and securing a deal required both strategy and speed.

Only a few simple documents are required, including a valid passport, birth certificate, and proof of address.

My focus is on providing either turnkey-style space for those interested in temporary, infrequent use or long-term leasing for business folks who require conference room space (or perhaps event space).

I think I will not let him make this upgrade as a 5 year payoff would require over $100/month additional rent.  

In Oregon for instance unless your doing a PUD open space cannot be required and you MUST create lots to specified zoning density.. in other words if your zoned 5k sq ft lots U cant ask for 7500 sq ft lots you must be within 10% of the base zoning.

However, one nice thing about this community is a one-time cost and it doesn't require additional payments.