Investors are expected to fund the property purchase and soft costs before construction begins.
Soft costs include:
• the property purchase price
• architecture and engineering fees
• city fees
• legal fees for tenant evictions
NOTE: Tenants are the most challenging work we have in Los Angeles; California is a Tenant friendly State.
• cash for keys to incentivize tenant relocation
• costs for addressing property violations
Sample Project and Investor Costs
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Step-by-Step Cost Breakdown:
1. Property Purchase: $1 million for a 6-unit building partially occupied by tenants.
2. Tenant Relocation:
• 4 tenants (2-5 years): $30,000 each
• 2 tenants (20 years): $50,000 each
• 1 elderly tenant (35 years): $45,000 (including attorney fees)
3. Architect and Engineer Fees: $300,000
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Total Investor Cost: $1,565,000
