Working this backwards, what I see is a 3rd party trying to benefit from another’s house via rental cashflow, My only business is 30+ years as probate estate and trust lending in CA.

Florida, California, Texas, and many other states are prone to such disasters.

Quote from @Tove Fox: I live in California and am interested in purchasing my first investment property in an A or B neighborhood in one of the above states, ideally under $300k.

California landlords can now enjoy streamlined maintenance and cost savings thanks to AB 2622.Signed into law in September 2024, AB 2622 raises the threshold for unlicensed contracting work from $500 to $1,000.

There are several articles that do an exceptional job of explaining who, what, where, why and how tax payers qualify for the ‘STR Loophole’ listed here:The Short Term Rental Tax Loop Hole: A Game Changer for W-2 Wage EarnersThe Short Term Tax Rental Loop Hole: What Investors need to know The implications on the Oregon and California Coastal STR market is a strengthening buyer pool for luxury rentals in the $750-1.5M+ range.

Forgot one detail the new California based lender committed to funding as long as the property isn't in an evacuation warning area.

Depending on the loan amount for the new property, roughly a little over half of the gain could be deferred through the exchange.Without a 1031, they’ll face taxes on the entire gain, including federal capital gains tax (likely 15% based on their income), California state tax, and depreciation recapture, potentially totaling $130-150K.

It's people who understand that it takes effort to become successful, typically from CA at this point, and have a way of showing those characteristics, do best.

.- Texas vs California Home Construction.

One of the things many who think CA OR WA are too expensive or are anti landlord.. this works two ways.. and exactly how you describe it..