That his how strict the law is regarding security deposits.One of the previous posters mentioned the SEC so I am a little confused on the ownership structure.  

Depending on where you are in LA, there are strict and laxed, some are very stringent.

I guess I'm being very cautious because with my plumbing company being a corporation the rules are very strict.

If this property is in Maryland, be sure you strictly follow landlord tenant rules, as you may lose the right to collect damages or retain deposit if not followed.  

Someone who strictly lives off their passive income from real estate.

They are typically very strict about the time limit of submitting documents so try to have everything in order before hand such as existing and intended use explanations.

I have never once had to evict a single tenant in those 15 years, none the less had it take 5-1/2 years ... some left in the night without paying, and some needed to be talked out (using strictly legal means), but nothing like that and looking back those that did leave were my mistake in screening or the type of property I bought ... most of my tenants stay as good, paying on time, take care of the place like they owned it, professional, responsible, families that they are, they stay for years, I raise rents every year, and when they do leave I have a line of people around the block ready to rent the place so vacancy is minimal ... based on my experience, I think it is highly unlikely to get such a nightmare so long as you buy quality properties (or rehab them into quality), in quality locations, delivered vacant COE, and are competent at screening new tenants.I have nothing against flipping either, BTW ...

Maybe one day I'll be able to step back from my work a bit and it'll give me more time to spend doing other stuff, but for now, that's the routine. 

If you are looking strictly for an investment and don't want to live in the place (or don't need to stay in SF), I'd check out some of the surrounding areas that are within a few hours.

Evaluate Rent Control on the property - - much of L.A. is strictly controlled and that severely limits your choices.