It is a criminal offense to trespass on this property"So is this a sight unseen auction?

I want you to really internalize this what I am about to say.  

Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers.  

w@Kevin Siedlecki very correctly pointed out that you moving into a backyard shed would be a likely zoning violation (which is not criminal -but could lead to a fine if found out, then warned and warnings are ignored), but that would not dissuade me if shed living equaled saving money.  

My wife and I use these properties for our personal businesses.I'm not a licensed contractor but I do have my Residential and International Code books.

Flipping PropertiesIf the primary objective of your real estate business, or one of your real estate businesses, is to buy, potentially fix up an existing property and resell it within one year, the Internal Revenue Service can consider that to be an active trade or business.

How you avoid a tenant with hygiene issues when you can only see financial and criminal check? 

or international attraction for the model to work, just a central location and a nice space.

The only thing I kept was the furnace, after replacing all the internals. 

Mario Furmanczyk,seriously if you are determined to play with LA's rent control laws and renting in California in general,you need to find a very good real estate attorney who is an expert in rent control laws and California rental laws in general.California is one of the most difficult places to do business and landlords are treated like criminals waiting to be caught by our court system.You need serious protection with good lawyers who will help you stay in compliance and keep you out of financial troubles.Good luck to you.