In addition, you would need enough working capital to pay for insurance (which will be going up a LOT in Los Angeles) and to pay for property taxes.Don't buy this unless you have substantial resources and a cash cushion to keep yourself safe.

We have had a pipe burst during the cold winter months, the roof needed to be replaced (thankfully covered by our insurance), and some issues with electrical, which hasn't been majorly updated since it was built in 1973. 

Your sibling can use a 1031 exchange to defer capital gains taxes on the sale of the rental properties by reinvesting the proceeds into like-kind investment properties.

I'd proceed cautiously.

With an 8% mortgage rate, they would pay more than $650k in interest.One major problem for both buyers and owners beyond mortgage rates is the rising cost of property tax and insurance.

Someone in the legal profession told me that we can give her 30 day notice and then proceed with an eviction. 

Insurance liability, I personally know 2 families that lost their children in home pools.

Looking my insurance policy it mentions that I can opt for settlement under Actual Cash Value vs Replacement Cost. 

Not sure if they have upgraded to desktop appraisals but if they are still doing in person appraisals , make sure you get everything (scope of work, good faith deposit, social, LLC docs, insurance, proof of prior experience, financial statements) in ASAP.

.🔹 Insurance Challenges – Even when insurance pays, it rarely covers the actual cost to completely rebuild.