And you can search by address and review any complaints, violations, and information from there.
Apartment Buildings located in the City of Los Angeles are at especially high risk of having their non-conforming units cited because of SCEP. Someone purchased 1415 Rexford drive for full list price, and put 50% down. With the non conforming rental income included the property produces a minuscule 0.2% cash on cash for $4,000 cash flow on $2,180,000 invested. If you lost the $700/mo from the studio because LAHD demanded you to restore it to a rec room, your cash flow would turn to a negative -$4,000 per year instead. In this instance, since whoever bought this building was probably an institutional investor or a trust, with a 30-year hold plan, they can take a break-even investment like this work and won’t be sensitive to slightly negative cash flow.
Keep in mind that all your profits as an investor in multifamily apartment buildings come with your last 10% of occupancy after all the expenses, debt service, and maintenance are paid off. Losing the income from a non-conforming could change an income property investment from a great deal to a bad one. There is no guarantee that two years after you own the building, your regular SCEP inspection occurs and the LA city Housing Department inspector tells you that you cannot rent the non-conforming unit. Now the cash flow for the non-conforming unit is gone and in addition you will need to pay the tenant living there relocation assistance of $10,000 to $20,000 and construction expense. Without the non conforming unit income, you either won’t be getting the return you wanted or you might even become negative cash flow!
I discount non-conforming units to no value.