At least it still cash flows, and I had a safety net to still cash flow at the reduced price. 

Buying from this type of seller will allow you to buy a property and have some "meat on the bone" a sorta safety cushion so when things go wrong you can weather the storm.

I would go to the City of LA Zoning Department (at Building and Safety) and ask them in person.

(it's a safety issue -- a broken railing can cause a major injury which could get you sued and, even if it broke because of the tenant, you'll have to prove that they did it. 

Profit margin = margin of safety.

We like the relative safety net that provides us with given that if all else fails, we can keep it as a rental (assuming we've done our homework).  

Is this a fire safety requirement, depending on the number of floors or height of the house?

I use what Warren Buffet calls a "margin of safety" by only buying significantly undervalued properties, that can be obtained for total acquisition costs (purchase, holding & rehab) below 80% of retail value.TOPS covers tuition and a little extra for those who qualify for it.  

I look at it like a safety net incase one of my deals blew up on me. in these great years of late were I have paid very large amounts income tax if I had a melt down project and lost say 500 to 1 mil  ( which has happened to me in 09) I could then go backwards and recapture all the tax I paid the last 5 years.Now of course that's me were I have high exposure to risk.. if your exposure to down side is not as great then I think anything you can do to get out of AMT is good.Although I also like the uneven distributions you can do in an LLC and the general flexibility of the instrument itself

Luka Milicevic I check in with tenants a week after they move in and again for the "safety inspection" 6 months after they move-in.Other than that, I don't want to hear from them.