Hello, although I do not have experience in converting Industrial to Residential Units, I would say, understand what the Building Dept. requires to make this feasible, for example, some jurisdictions require that each unit have one covered parking space (carport/garage etc.).

Am i required to tell any tenant the reason if I turn them down? 

LLC's are more used by larger investors and people who do not qualify under their personal names and have to ue business purpose loans and they require the property be in an LLC and not an individual.

The licensing process for real estate requires fingerprinting, which should deter bad actors.

Definetely trying to build a balanced portfolio one property at a time.

The tough balance is that the management companies charge 20-30% which will severely limit the positive cash flow.

Second, pretty much every hard money lender has this same requirement.

(Not really a surprise that CA makes life a little harder)The California Franchise Tax Board will require that you file a new form every single year (Form 3840) in which you detail what you did with your sale proceeds, where they are invested, and whether you ever recognized income from your sale or any subsequent sale.  

Current negotiation from LL Commercial lease Monthly Rent $6000 Security Deposit will be $7000 (based on last month rent of the lease term)Six Month Build Out Period - June 1 to Dec 31, 2024 Lease to start January 1, 2025. 5 year term During the build out period the tenant would pay $3000 per month rent (June 1 to December 31, 2024)The balance of $18,000 from the build out period would be paid back over 12 months at $1500 per month on a separate agreement.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.