Rental / DSCR in Los Angeles

They are not the same rule with different numbers, and the build date decides which one applies. A pre-October 1978 apartment building inside the City of Los Angeles falls under the Rent Stabilization Ordinance (LAMC 151), where the allowable annual increase now tops out at 4 percent under a formula the City Council amended effective February 2, 2026 (90 percent of average CPI, with a 1 percent floor). A 2015-built building a block away is governed by the statewide AB 1482 cap instead, which runs up to 8.7 percent for increases taking effect August 1, 2026 through July 31, 2027 in the Los Angeles CPI region. Both regimes carry just cause protection after 12 months of occupancy, and the RSO adds a tiered relocation payment on any no-fault termination, due to the tenant within 15 days of notice. The single-family exemption from AB 1482 is narrower than it looks: it holds only if the owning entity is not a REIT, a corporation, or an LLC with a corporate member, so check your entity structure before you assume you are exempt.

Yes, and each city inside Los Angeles County sets its own cap, so a portfolio spanning city lines needs a parcel-by-parcel check, not one countywide assumption. Santa Monica runs a Maximum Allowable Rent system through an elected board, with a September 2026 general adjustment of 2.6 percent capped at $70 for higher-rent units. West Hollywood's adjustment is 2.25 percent for the year running September 1, 2025 through August 31, 2026. Beverly Hills and Inglewood cap buildings of five or more units at 3 percent, with Inglewood allowing up to 8 percent in buildings of four units or fewer. Culver City has its own separate ordinance; we could not verify its current allowable increase from a source we would publish, so confirm the rate directly with the city before you underwrite a Culver City rent roll.

Not automatically, and the answer depends on where the property sits. Unincorporated Los Angeles County runs its own Rent Stabilization and Tenant Protections Ordinance, with fully covered units defined by a certificate of occupancy on or before February 1, 1995. State law exempts a separately alienable single-family home from local rent caps, but that exemption does not reach local just cause and registration rules, so a single-family rental in unincorporated county territory can still owe registration and just cause compliance even where it is exempt from the cap itself. Pasadena's Measure H covers 2-plus-unit buildings built before February 1, 1995 and exempts single-family homes and condos outright, with a 2.25 percent general adjustment for the year running October 1, 2025 through September 30, 2026. Glendale has no rent cap at all, but its Rental Rights Program still layers on just cause and relocation duties, and Long Beach has no local rent ordinance, leaving AB 1482 as the only cap there. Four jurisdictions, four different answers, all inside one county.

Because California resets the assessment to your purchase price the day you take title, not the day the seller bought. Under Proposition 13, the 1 percent general levy applies to a Net Taxable Value that resets to the price paid on a change of ownership, then can rise at most 2 percent a year until the next sale. A Los Angeles County property held by the same owner for decades can carry an assessment far below market, and that gap disappears the moment it trades hands. On top of the reset 1 percent levy sit voter-approved debt service rates and direct assessments that vary by Tax Rate Area, pushing typical all-in effective rates to roughly 1.1 to 1.4 percent of the new assessed value. Expect a separate supplemental bill too: the Assessor reassesses as of the first of the month following your purchase and bills the difference outside the normal cycle, so budget for it apart from your regular impounds. Talk to your CPA about your parcel's Tax Rate Area and any direct assessments before you lock a pro forma to the seller's number.

Mostly at the edges of the county, not in its high-cost core. Gross yields run roughly 2.5 to 4.7 percent across nearly the whole county as of June 2026, which does not clear typical DSCR debt service on an at-market purchase without a large down payment, an ADU, or real value-add work. The Antelope Valley is the exception: Lancaster and Palmdale are the only submarkets in the county where gross yields clear 6 percent, at a fraction of the entry price of the coastal and Westside cities. Before you run a DSCR pro forma anywhere in the county, confirm which rent cap applies to that specific building (see our RSO and AB 1482 answer above), because a pro forma that assumes market-rate re-tenanting on a rent-controlled building is not underwriting, it is guessing.

Not inside the City of Los Angeles. Only a host's own primary residence can be home-shared there, so investor short-term income is not a lawful business model to underwrite on a non-owner-occupied City of LA purchase. The Home-Sharing Ordinance limits listings to the dwelling the host occupies at least six months of the year, requires registration before listing, and caps short-term rental days at 120 a year outside the extended-hosting process. RSO units cannot be home-shared at all. Rules differ by city elsewhere in the county, including Long Beach, Pasadena, Santa Monica, and West Hollywood, and we don't have a verified answer for those jurisdictions, so confirm locally before underwriting short-term income anywhere outside the City of Los Angeles core.

Plan on at least 20% of the purchase, plus closing costs. We lend up to 80% LTV, so on a $600,000 Los Angeles County purchase that is up to $480,000 from us and $120,000 from you (600,000 x 80% = 480,000). Expect to bring more than the minimum in most of this county: gross yields run roughly 2.5 to 4.7 percent across nearly the whole of it, and at that level a purchase often needs a larger down payment, an ADU, or real value-add work to carry DSCR as low as 0.75. Lancaster and Palmdale are where the minimum down payment is most likely to pencil on its own. Subject to underwriting.

From $100,000 to $3,000,000. The $100,000 floor is rarely the binding constraint here; the $3,000,000 ceiling is the one that bites in the county's high-cost core, where a single building can price past it and the deal moves to a portfolio or bridge structure instead. Credit starts at 640 and the qualifying income is the property's rent, not your tax returns. Send the address and the rent roll and we will tell you which structure fits. Subject to underwriting.

Often yes, because prepayment is a structure you choose up front rather than one fixed rule. We offer flexible prepay structures, and which one you take is set in underwriting alongside the term, whether that is 30-year fixed or a 5, 7 or 10-year ARM. That choice matters more in Los Angeles than in most markets: a pre-October 1978 building inside the city is capped at 4 percent a year under the RSO, so the rent side of your coverage ratio moves slowly and you may want the option to refinance on the asset's timeline rather than the note's. Tell us the exit you expect before we paper it. Subject to underwriting.