California Lawyer Breaks Silence on Nightmare Squatters, Lawsuits, & $50,000 Evictions

Summary

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Podcast Summary: The Iced Coffee Hour

Episode: California Lawyer Breaks Silence on Nightmare Squatters, Lawsuits, & $50,000 Evictions
Hosts: Graham Stephan, Jack Selby
Guest: Avi Sinai (Eviction Trial Lawyer)
Date: April 9, 2026

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Episode Overview

In this episode, Graham Stephan and Jack Selby host eviction trial lawyer Avi Sinai for a candid and eye-opening conversation about California’s increasingly complex and hostile environment for small landlords. The discussion addresses the steady rise of “professional tenants” exploiting legal loopholes, nightmare eviction scenarios, why institutional investors thrive as mom-and-pop owners are squeezed out, and what landlords can expect in the ever-tightening regulatory landscape of Los Angeles. Chris, a recurring guest, joins to share personal war stories and probe industry insights.

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Key Discussion Points & Insights

1. The Nightmare Tenant Crisis in California

• Exploiting the System:

  • Avi describes a rise in tenants who intentionally game eviction laws for financial gain:

    “The reality is it's gotten so bad in California that any mistake can cost you your property.” (Avi, 00:42)

  • Typical scenario: Tenants move in, stop paying rent, threaten to sue for habitability issues, and demand a cash payout from desperate landlords to vacate.
  • Tenants may stretch out nonpayment cases for months or even years, living rent-free in high-value homes.

    “I've seen renters live on the property for years and not pay a single dime.” (Avi, 00:52)

  • Repeat offenders often have recognizable litigation histories and the same representing lawyers.

• Habitability Lawsuits as Leverage:

  • Under CA law, failure to fix code violations within 35 days can trigger tenant lawsuits with hefty damages, plus automatic attorney’s fees — incentivizing attorneys to litigate.

    “The legislator passed all these laws that... the tenant can sue and not just get their damages and rent back. They can get statutory fees and attorneys fees. So attorneys can easily pick up the case.” (Avi, 05:41)

2. Landlord Powerlessness & Legal Pitfalls

• Extreme Complexity & Risk:

  • Landlords face a growing gauntlet of restrictions, with the smallest clerical mistake able to void eviction attempts:

    “It's incredibly easy to lose an eviction in California, right? One misstep, one mistake in the notice and you're gone. Right? And you have to restart all over again...” (Avi, 13:13)

  • Tenants’ lawyers (often funded by nonprofits) commonly delay proceedings with last-minute technical filings, costing months and thousands in legal fees.

• Barriers for Small Owners:

  • Many landlords simply cannot afford the legal costs of evicting a problem tenant, often leaving selling as their only financial recourse:

    “They have to sell. There's no other option.” (Avi, 16:11)

3. Regulatory Wave and Social Attitudes

• Legislative Hostility Toward Landlords:
  • New LA policies continue to limit landlord income with rent increase caps, favoring tenant protections in almost every conflict:

    “If you look at who city council are targeting, it's property owners, it's housing providers… Each time tenant groups say ‘we need relief’, they just pass another law.” (Avi, 08:40)

  • Small landlords are seen as easy targets while big institutions dominate.

4. Case Studies & Personal Stories

• Career Tenants in Luxury Homes:

  • Chris recalls an attorney who lived rent-free in a $12,000/month home for three years, exploiting every regulatory loophole (03:10).
  • Avi cites similar repeated offenders rotating through multimillion-dollar LA homes.

• “Protected” Long-Term Tenants:

  • Chris shares the story of a tenant in Santa Monica paying $600/mo in a property worth nearly $1 million — protected status and lease complications made the property almost unsellable and a liability (10:10).

5. The Eviction Process: Landmines & Solutions

• Notices and Technical Requirements:

  • Failing to serve just one required document (such as a covid disclosure, RSO or LAHD notice) can force the landlord to restart the eviction clock (15:34).

• Screening and Litigation Checks:

  • Avi’s pro tip: Check every applicant’s litigation history before signing a lease, as “95% of nightmare tenants have extensive court records.” (19:35)

• Discrimination Claims:

  • Even when selecting the most financially qualified applicant, landlords risk “discrimination” lawsuits unless they document lawful, permissible criteria and sometimes must hire intermediaries for denials (21:43).

6. Section 8 and Regulatory Landmines

• Section 8 housing assistance now frequently triggers lawsuits for landlords miscommunicating during the application process. Avi warns:

  “When you get that [Section 8 inquiry], you say yes immediately and nothing else. If you say anything other than yes, you're going to get a lawsuit.” (Avi, 22:35)

• “Scam” Section 8 inquiries via text/email are described as lawsuit traps.
• Chris shares horror stories of costly Section 8 property inspections leading to withheld rent and forced, expensive remodels that swallowed profits (24:00–25:24).

7. The Squeeze on Small Landlords & Market Shifts

• Avi and Chris note the forced exit of mom-and-pop landlords, bought out by institutional operators who can absorb legal costs, regulatory complexity, and have in-house legal teams (26:00).
• Institutional consolidation is expected to accelerate, with major investors already buying up small properties.

8. Why Prices Stay High & Local Wealth Realities

• LA’s property prices remain high primarily because wealthy buyers prioritize lifestyle, locking out anyone without extreme income:

  “If you want to own a house, if you want to live in the good neighborhoods, you have to make… at least three to $350,000 a year.” (Avi, 27:07)

• Private education and social expectations drive families to overextend finances, often spiraling into housing distress.

9. Insurance Woes and Further Risks

• Insurance companies are increasingly refusing new California clients, especially on older properties or multifamily buildings. Even when coverage is available, habitability-related lawsuits are usually excluded, further upping landlord risk (29:14–30:11).

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Notable Quotes & Memorable Moments

• On systemic bias:

  “Objectively speaking… if you look at who city council are targeting, it's property owners, it's housing providers… You can make the argument property owners are considered bad and renters are considered good.”
  — Avi Sinai, 08:40

• On professional tenants:

  “And half the time it works. And if it doesn't work, they just know how to stretch a case for six to nine months and they stay there—and then they leave and they find the next evictment.”
  — Avi Sinai, 02:45

• On screening applicants:

  “If you see someone with a lot of litigation history, more than two or three lawsuits, just deny them immediately.”
  — Avi Sinai, 20:40

• On regulatory unknowns:

  "It's the unknown of regulatory environment. What's going to come next? ...It just makes it harder and harder. So it's very hard to plan ahead right now."
  — Avi Sinai, 06:48

• On landlord selloff:

  “Mom and pop landlords lose everything. 100%. They have to sell. Just no other option.”
  — Avi Sinai, 01:16

• On Section 8 legal minefield:

  “When you get that, you say yes immediately and nothing else. If you say anything other than yes, you're going to get a lawsuit.”
  — Avi Sinai, 22:35

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Timeline of Important Segments

| Timestamp | Topic/Quote | |-----------|-------------| | 00:30 | Tenant scams, professional tenants, host selling off LA real estate | | 02:15 | Avi’s background and the mechanics of professional evictions | | 03:10 | Chris’ account of a “career tenant” in luxury housing | | 05:41 | Habitability lawsuits: rules, incentives, strategies | | 06:46 | Most difficult part of being a landlord: regulatory uncertainty | | 08:40 | Social/legislative targeting of landlords (“discriminated class”) | | 10:10 | Santa Monica story: tenant-protected properties as liabilities | | 12:29 | Arguments for and against investing in LA now | | 13:13 | Eviction misconceptions and technical traps | | 15:51 | Landlord costs and infeasibility of legal process for small owners | | 16:21 | Rent-raising conundrum under new legal limits | | 19:35 | Importance of screening for litigation history | | 21:53 | Navigating anti-discrimination rules in applicant selection | | 22:35 | Section 8 “scams” and lawsuit traps | | 24:00 | Section 8 horror stories and profit erosion | | 26:00 | Institutional consolidation and squeezing out small landlords | | 27:07 | Wealth requirements to live and buy property in LA | | 29:14 | Insurance problems and increased risk | | 30:29 | Final thoughts on why small landlords are disappearing |

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Episode Takeaways

• Landlords in LA and across California are facing a perfect storm of regulatory risk, litigation-hungry tenants, and rising costs, making smaller-scale ownership almost untenable.
• Institutional investors benefit from the complexity, often buying out struggling landlords.
• Eviction and rent rules are both easily abused and nearly impossible to enforce quickly, shifting power dramatically toward tenants with legal savvy or nonprofit support.
• LA's market remains expensive due to wealth influx, but the traditional American dream of small-scale property investment is under existential threat.

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Tone

• The conversation is blunt, laden with frustration and incredulity at the state of California real estate law, but peppered with practical advice and dark humor drawn from lived experience.

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End of Summary – For the full list of Avi Sinai’s resources, check the episode description.

Transcript

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[Podcast Host Graham]

Is there a good reason why the

[Podcast Host Chris]

rent hasn't been paid? Get your cameraman out of my face. The tenants from hell are back. They move in, but then they won't pay and they won't leave. What's the most difficult part of being a landlord?

[Avi Sinai]

The reality is it's gotten so bad in California that any mistake can cost you your property.

[Podcast Host Chris]

How would you like to live in a beautiful home without ever having to pay rent or a mortgage? Sounds pretty good, doesn't it? Yeah.

[Avi Sinai]

I've seen renters live on the property for years and not pay a single dime.

[Podcast Host Chris]

Hey Barb, can we talk to you about why you guys have so many lawsuits against you guys?

[Avi Sinai]

This is not an accident. The system is designed to make you fail.

[Podcast Host Chris]

I would describe them as people who

[Home Depot Announcer]

have a system figured out.

[Podcast Host Chris]

So is the eviction system intentionally designed to fail?

[Avi Sinai]

Yes. The entire market is broken and most people just don't realize it yet.

[Podcast Host Chris]

People who benefit from this really are institutional landlords, big corporations, and mom and pop. Landlords lose everything 100%.

[Avi Sinai]

They have to sell. Just no other option.

[Podcast Host or Guest (possibly a co-host or another guest)]

If you wanted to be a tenant and exploit these laws as much as you could, how would you do it? How much money do you think you could make?

[Podcast Host Chris]

Something I really haven't talked about a lot lately is that I am selling off all of my real estate in California. Things have gotten so bad. I see the writing on the wall and I just want to get out. And I want to say the straw that broke the camel's back is you. I found you on Twitter. We had a good talk. You are an eviction attorney?

[Avi Sinai]

Yep.

[Podcast Host Chris]

You look into real estate? We had a great talk and I want to say within 10 minutes, you convinced me to not have anything to do with Los Angeles, California.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

Being a landlord. So if you want to introduce yourself,

[Avi Sinai]

thank you so much for having me on. I'm Avi Sinai. I'm an eviction trial lawyer in la. The Word is out for a lot of these professional tenants. And you see them again and again and again in the courtroom. They're represented by the same lawyers, evicted by the same lawyers. And they understand how to game the system. Right. They know that if they go to the property owner and then they just stop paying rent, and then they come and say to landlord, look, it's going to cost you $20,000 to evict me. Why don't you give me 10, I'll leave. And half the time it works. And if it doesn't work, they just know how to stretch a case for six to nine months and they stay there and then they leave and they find the next evictment.

[Podcast Host Chris]

See, this is where I saw really common when I was working in real estate. I remember the first career tenant that I met seemed like a really, really, really nice guy showed up and he was an attorney. He was making a few hundred thousand dollars a year.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

He had a wife, he had three kids, religious. And they met with the owner and they got along so well. And they rented this house in Beverly Wood. And it was $12,000 a month, paid immediately, paid the security deposit. And then it was like the next month that the rent was due, he started saying, oh, there's problems, there's water intrusion, there are rodents. There is this thing wrong, this thing wrong. I'm withholding rent until you fix these things. And the owner fixed all the things. And then the tenant said, no, no, no, you, you didn't fix the things properly. We're, we're getting asthma. We have these issues. Could you fix it again? Delayed it a few months, fixed all the things. And then the tenant said, hey, listen, I wasn't aware you're not current with your mortgage. You're behind. Because this was back in 2011. He was trying to do a short sale and showing financial hardship. And he says, well, because you're behind on your mortgage, I legally don't need to pay you rent. Now, this guy put his life savings in this property and wasn't receiving rent for it. He was hoping he could keep the property, do a short sale, be able to recoup something, or just be able to refinance his mortgage. This tenant drew it out for like three years before he had to leave. But he got three years of free rent in a place that was $12,000 a month. And he picked up and he did it again.

[Avi Sinai]

You know, this story is insanely similar to a case I just finished, right? A family that would on the outside look completely normal. Right. And I get a call from this property owner, $6 million house in Beverly Hills, and they say, look, I mean, they stopped paying re need to evict. So I do a quick search, and all of a sudden I see all these lawsuits from these tenants, and I recognize a friend's name that they were in litigation. So I called this friend. I said, hey, like, do you know these tenants? He's like, yeah, well, you know, they moved in $4 million house. They immediately threatened to sue me for habitability. They stopped paying rent. I had to evict them. I had to pay them a fortune. During litigation, we found out they did it five times, and it was from $4 million home to $7 million home to $5 million home. And it was very hard to evict them, but we did it.

[Podcast Host Chris]

So for those who aren't familiar, describe what a habitability lawsuit is and why tenants are taking advantage of it.

[Avi Sinai]

Yeah, so under California law, landlord is required to give every tenant a habitable space. The kicker is, is the legislator passed all these laws that if you have a certain code violation and it's not cured in 35 days, the tenant can sue and not just get their damages and rent back. They can get statutory fees and attorneys fees. So attorneys can easily pick up the case. And let's say there are 20, 30, $40,000 in damages. They can collect attorney's fees. So they're incentivized to continue full force in litigation and demand very, very high settlements at the beginning. There are also some local rules, like for example, in LA Santa Monica, that related to harass. You're able to get attorney's fees on that, too. So a court violation will make it really, really bad. An injury will make it really, really bad, but not necessary.

[Podcast Host or Guest (possibly a co-host or another guest)]

What does harassment mean? Like, how. Have you seen harassment applied in your own practice?

[Avi Sinai]

Yeah, so it could be very mundane things like, for example, offering a tenant a buyout too many times, not making repairs, giving notices that are considered bad faith.

[Podcast Host Chris]

What's the most difficult part of being a landlord?

[Avi Sinai]

It's the unknown of regulatory environment. What's going to come next. In the last five, six years, we've seen moratorium after moratorium, restriction after restriction, and there is this unknown of what is city councils going to do next? What are the people in Sacramento going to do next? How are they going to restrict our property rights further? And, you know, real estate, you have thin margins. It just makes it harder and harder. So it's very hard to plan ahead right now.

[Podcast Host Graham]

For landlords, this episode is in partnership with Airbnb. So Graham and I just wrapped up a trip. We were in Austin for a few days. We filmed episodes with Togi, Chris Camillo and Caleb Hammer. And honestly, honestly, every time we're on the road, we're staying at homes on Airbnb. It's just become the default.

[Podcast Host Chris]

And here's the thing most people don't think about. When you're the one traveling, your place back home is just sitting there empty. And that's a real missed opportunity.

[Podcast Host Graham]

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[Podcast Host Chris]

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[Podcast Host Graham]

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[Podcast Host Chris]

So instead of your home sitting empty, you could be generating some extra cash, whether that helps you cover the next trip, your flights, or just goes towards something that you've been putting off at home.

[Podcast Host Graham]

I actually listed a spare room in my house on Airbnb and I was genuinely so surprised how easy it was to set up, how seamless the entire process was, and it actually made me some pretty good money. I would actually recommend this to anyone out there that wants to make a little extra cash on the side. It's honestly phenomenal. If you're thinking about hosting but want some help getting started, find a co

[Podcast Host Chris]

[e-mail] now you said on Twitter that Los Angeles landlords are the most discriminated class in our society. How would you explain that to the average person who hears that and thinks that sounds insane?

[Avi Sinai]

Yeah. So obviously it's kind of a half joke, but objectively speaking, if you look at who city council are targeting, it's property owners, it's housing providers. Right. Just this week they passed huge restriction cutting in half the amount of rent increases landlords can pass to rent control residents. It's almost like they have this emergency button and anytime their constituents or tenant rights groups say, hey, listen, we need some aid, we need some relief, they just pass another law. I think you can make the argument property owners are considered bad and renters are considered good. And if the city Council can do something for their constituents, they're just going to do It.

[Podcast Host or Guest (possibly a co-host or another guest)]

So do you see this problem just continually getting worse? And if you kind of expand this out in like a 5 to 10 year window, 20 year window, what do you expect to see? If there's already 20% of places in Los Angeles are completely vacant, how do you imagine this looking?

[Avi Sinai]

I'm already seeing consolidation. So if an apartment building is goes on the market, it's most likely going to be purchased by a larger property owner with a lot of units. Right. These are skilled operators. They know what to do. They're much better equipped to deal with a tough regulatory environment. I don't know how the story is going to end, but we're clearly in a downward trend.

[Podcast Host Chris]

Another Santa Monica story. This is interesting. I remember in 2014 or 2015 I was looking to buy a place for myself and there was a condo that came up on Montana and Ocean, fourth floor, it's across from the beach. And they were asking $450,000.

[Avi Sinai]

Oh wow.

[Podcast Host Chris]

A really good price for a one bedroom.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

Here's the catch. It's tenant occupied. The tenant was paying like 600 bucks a month for this place. She was over the age of 62, she made several hundred thousand dollars a year and she was extremely healthy. And the HOA was basically what she was paying in rent. And so if you were to buy this place, you couldn't kick her out because she's a protected tenant. And your carrying costs would be the property taxes, HOA insurance, maintenance, all these things that are several thousand dollars while she's paying 600. And so you have to carry the loss of 1,500 to $2,000 a month potentially for 30 plus years until she passes away.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

The other issue I remember with this, why no one wanted to touch that even though its value was like $900,000, was that in addition to her, her son was on the lease. And apparently no one could contact the sun. Like no one knew where the sun was, how old the sun was, where he was. And so there's a chance that, let's say you wait 30 years and then she passes away. All of a sudden the sun comes out of the woodwork. Actually, I'm on the lease and I am, you know, 45 years old and I'm entitled to this place for the next 50 years. Yeah. And then it's like it's married.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

What do you do?

[Avi Sinai]

Yeah, yeah. It's a lot. You're buying a liability.

[Podcast Host Chris]

But I remember this guy took such a huge loss on this place. Like he lost 5, 600,000. He even offered her like six figures, one $200,000 to leave. She wouldn't do it.

[Avi Sinai]

Yeah, of course.

[Podcast Host or Guest (possibly a co-host or another guest)]

So you can't evict someone if they're paying rent.

[Avi Sinai]

No.

[Podcast Host Chris]

Unless it is there are considered a nuisance or unless they're somehow in violation of the lease or they're trying to do like cosmetic repairs that you don't approve of. All of those can be cured though. Like let's say she moves in her friend or she sublets it. You can't just say, all right, well now you're out. You got to give her a notice to. What is it a notice to?

[Avi Sinai]

It's called a notice to cease. So yes, a pre. Pre eviction notice first. Then you have to give an eviction notice with an opportunity to cure most of the time. And if they don't cure and they don't leave, then you can file for eviction, which of course is going to take forever.

[Podcast Host or Guest (possibly a co-host or another guest)]

What is the argument for investing in Los Angeles now?

[Avi Sinai]

Very easy, right? I mean, we have 300 days of sun. All the problems in LA could be easily solved, right? It's mostly crime and homelessness. And historically we've had incredible rent growth, incredible property appreciation growth, which if we don't have in the next 10 years is probably going to be the first time in forever that we didn't have it. I was just speaking with someone the other day, a big investor in a big fund, and he believes that Southern California has a huge opportunity, right? He sees this is the same condition I've seen in 2012 when nobody wanted to touch anything. If you would have told me three and four years ago, you can buy an apartment building at 5 or 6 Cap in LA, I think you're crazy, right? But you can buy that right now in la.

[Podcast Host Chris]

What's the biggest misconception the public has about evictions?

[Avi Sinai]

People think about evictions and they think about this horrible process that the evil landlords and the system are oppressing the tenants. In reality, it's completely the other way around. Every line, the book, every process, every step of the way is for the tenants. It is incredibly easy to lose an eviction in California, right? One misstep, one mistake in the notice and you're gone. Right? And you have to restart all over again over the years. The time that it takes to evict someone has exponentially grown, right? And that's for many reasons. The laws change. Times got extended budget cuts, not enough courtrooms, jury trials, but the restrictions became even harder. So what do we have today? Right? I was about to go to trial just this week. And an hour before trial was supposed to start. The tenant defense lawyer files a motion to dismiss on a technicality that could have been filed on the first week of the case. That lawyer is not getting paid by the tenant. That lawyer is hired by a nonprofit that's being funded by taxpayers and the taxpayers are footing the bill for these kind of strategies.

[Podcast Host Chris]

I had that almost exactly happen to me. There was a tenant who left a property and then moved back in when it was listed for sale.

[Avi Sinai]

Oh my God.

[Podcast Host Chris]

Sent me rent and I had to return the rent to her.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

And I was told by the person I was working with, yeah, if you take the rent now, you've created another tenancy, you have to start over again. So I sent back the rent and I sent her some sort of notice I had another company handling. It was a property management firm at the time who was handling it. And they did not include, and this was like 2023, by the way, a one page Covid disclosure. That was it. Everything else was perfect, but the one page Covid disclosure. And as we were getting closer to the court date, I had another company look through and said, who served this? And I said, I had the property management firm never have them do this. They miss this one form and we have to start over again by issuing her a new notice. And of course she had the free legal assistance, apparently telling her, yeah, don't mention this, we're going to use this at the last possible minute.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

And yeah, we, we caught it before then, but it did cost us several months because we had to go back.

[Avi Sinai]

You have to post the RSO notice informing them of their RSO rights. You have to post an LAHD notice informing them of their tenant rights. Then you have to now post a third notice, which is the notice for right to counsel. And if you don't have one of these notices posted on a common area, that's an affirmative defense.

[Podcast Host Chris]

So who's going to help the landlord? What if the landlord can't afford to evict their tenant and they just don't have the money? What do they do? Like, let's just say someone inherits a family property, it's breaking even every month, but it means a lot to them. And over, over time they're going to pay it down and they have to evict a tenant and they say, I don't have $20,000. What do they do?

[Avi Sinai]

They have to sell. There's no other option. There's some cheap services out there for eviction but that's still gonna run you four or five grand. If you can't afford four to five grand, you gotta sell the property.

[Podcast Host Chris]

My philosophy has always been this. And this was very unpopular for people to hear. And it worked well for me. Up until recently, I'd never raised the rent. I hated raising the rent because I'd get really great tenants that would stay like 8 to 10 years. Wow, they were awesome. And I had zero hassles, zero headache. They always paid on time. If there's something that needed to be fixed, of course I do it because I don't want them to le.

[Podcast Host or Guest (possibly a co-host or another guest)]

Yeah.

[Podcast Host Chris]

And from my perspective, too, when a tenant leaves, my overhead is really high. Like, let's say on a unit, I might profit in a year. Like NET. NET NET $15,000 in a year for one unit.

[Avi Sinai]

Refreshing Wild Cherry Cola meets smooth cream. The treat you deserve.

[Podcast Host Chris]

Pepsi Wild Cherry and cream. Treat yourself. If they move out, I repaint it. That's $4,000. It's usually maybe two to three months where it's empty, where I'm fixing it up and thinks that's another few thousand dollars in lost rent. And then there's another few thousand dollars in random miscellaneous things to get a tenant back in there. So it's basically when they move out, I miss almost a year's worth of profit. And so I think, well, instead of just having a year's worth of profit and turning the unit over, I may as well pass those savings back onto the tenant and just not have them leave by not raising the rent. But when the city comes in and says, you cannot raise the rent, well, then jacking up the cost and everything else, that to me is a red flag that all of a sudden the city says it's mandatory. But they don't do that for groceries. They don't do that for insurance costs. They don't do that for car repairs. They don't do that for just about anything else. And so now I've gotten to a point where I have to raise rent every year, because if I don't do that, I end up losing out so much more money you have to raise. And so now I'm at a point where I've had to. And I hate doing it, but. But it goes to show, it's one of those things where if they didn't do that, I wouldn't be raising the rent. But recently, what they said is that you could only raise rent up to a certain amount or 90% of CPI. So if inflation comes in at 2%, you could only raise under inflation, basically. So every year you have a tenant, you're going to be making less and less and less and less.

[Avi Sinai]

Exactly.

[Podcast Host or Guest (possibly a co-host or another guest)]

If you wanted to be a tenant and exploit these laws as much as you, how would you do it and how much money do you think you could make?

[Avi Sinai]

I think that I would find the highest rent apartment, probably complain about mold, having brain fog and stop paying rent. You can probably stay there for nine, 10 months if you know what you're doing.

[Podcast Host Chris]

And then you could pick up and do that again.

[Avi Sinai]

Yeah, and there's plenty of people who are doing that, so.

[Podcast Host or Guest (possibly a co-host or another guest)]

And there's, I'm guessing there, you know, there are laws against creating a registry where you say, oh, this tenancy, you can't do that.

[Podcast Host Chris]

Why not? Because why can't you have a yelp for tenants? Why can't you do that and say, hey, here's the person's name, they were a problematic tenant. Because on the flip side of that, you could also in the same registry say, this was a phenomenal tenant. Yeah, this tenant I didn't want to move.

[Avi Sinai]

So I think there's two problems with that. Number one, eviction cases are sealed by law. The documents are not available to the public. These are not secret proceedings, but the documents themselves are protected. And I think that someone tried actually to do that and they got sued. So can't do that.

[Podcast Host Chris]

What's the lowest rent you've seen a tenant pay?

[Avi Sinai]

I've done a very, very hard eviction in LA. The tenant was paying $250 a month. She lived there for 20 years. When I came in, she had a seven figure lawsuit against the landlord. No eviction attorney would take the case, but we filed an eviction. We took a risk. We offered her $75,000 in the hallway to leave right before trial and she said no. And we took a risk in trial and won in trial and she got evicted. And then she proceeded to call her city attorney's office. She called every member of city council, said that I cheated in trial, and then she filed a bar complaint against me. We didn't do anything wrong, so there was nothing to do about it. She got evicted because she didn't pay the rent and she violated the rules. But that was great for the property owner. But there's a much easier way to avoid these kind of tenants. I tell this to all my clients. I post on Twitter all the time. I took the 20 worst tenants that I evicted and they're horrible. And I said, what's the common denominator with all of them. And in 95% of cases, if you run a name search and you look for litigation history, they have a long litigation history, not necessarily just for evictions collections. They sue people for personal injury, for employment. The vast majority of renters are decent people. Nobody wants to go to court. Right. Just insane people want to go to court. But something happens when you go to court a lot. You get comfortable with it and the fear just kind of goes away. So in 95% of the time, if the property management or the owner just did a simple litigation search on the tenant, a ton of cases would have come up. If you see someone with a lot of litigation history, more than two or three lawsuits just denied them immediately.

[Podcast Host or Guest (possibly a co-host or another guest)]

Are you allowed to deny people? We had Jason Oppenheim on here, and he was saying that it's even hard to, like, say no if you get an applicant to rent your land. Yeah, yeah.

[Podcast Host Chris]

He gave an example of a house that he knew where they had multiple applications and the landlord just picked the person who was the most qualified.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

And then one of the people who was not the most qualified said, oh, you're discriminating against me. And that was the reason why I'm going to sue.

[Avi Sinai]

So you have to be very, very careful.

[Podcast Host Chris]

Right.

[Avi Sinai]

I would recommend hiring either a property manager or a lawyer to be kind of like a middle ground between you and the tenant. Right. And always give an allowed reason of why you're rejecting a tenant. Some cities even have income source is a not allowed reason. Right. So you can't. You can't discriminate based on their profession. Right now, a hot topic is Section eight denials. So there's this new scam going around. I don't know if you guys heard of it. You list your house on Zillow or Craigslist and you get a text and you. Or. Or you. It's always a text or email, or you get it through the app and someone asks you, do you accept section 8?

[Podcast Host Chris]

I got those all the time. Yes.

[Avi Sinai]

So when you get that, you say yes immediately and nothing else. If you say anything other than yes, you're going to get a lawsuit. And that's based on federal and state housing discrimination laws. And again, just like habitability, they carry attorney's fees provision on them. So these lawsuits now are all the rage.

[Podcast Host Chris]

I had a Section 8 tenant. She was fantastic. Section 8, on the other hand, was not. She was the loveliest person, and we got along so well. And I'd bring her food all the time. But Section 8 would come in and do these annual inspections. And they would say, hey, this carpet's dirty and you got to replace the whole carpet. Well, that's going to be $5,000. The tenant didn't take good care of the carpet. She walks in with her shoes, it's raining outside, she's stomping on the carpet. Now there's mud tracks through it. She'll drop something on the carpet. Now it's stained. Section 8 says, I gotta replace it. Well, she damaged it, you gotta replace it. There was another one where I had to replace a whole vanity for some reason or another. Maybe there's something where it was like wear and tear, not caused by me, it was brand new. Anyway, I had to replace that whole thing. And they withheld rent because I was remodeling the exterior of the property. And I had a painter there at the same time. The inspector came and the painter was chiseling off paint to repaint it. And they said, that's potentially lead based paint. And because of that, a child could come into the property and put that in their mouth and that's a hazard. So until that's all cleared up, we can't remit payment. And I said, she's in her 70s, no kids are around here, no one's eating the paint. This doesn't matter. No one's around. Nope. Withholding the rent and then getting them back at the time wasn't as difficult as it is today. But I still remember like going through the whole ordeal of having them to be called back to just look and see. Okay, no paint chips. And they could see the guys there like peeling the paint away like it's not a thing that's been sitting there for weeks. So it's dealing with Section 8. I also had another one where there was a tenant on section 8, and it was a seven unit apartment building on La Brea in Los Angeles. And the tenant always had issues with cockroaches because they wouldn't throw away their food and they were a hoarder. And Section eight would come in and require the landlord to clear out the unit and then fix everything. And next year he had to fix everything. And it was every single year he had to basically remodel this unit because the tenant wouldn't throw away their trash. It created roaches, just all these issues. But he would remodel the unit every year. And the tenant, I think was paying four or five hundred dollars a month.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

And so it costs more to remodel the unit than the tenant would pay in rent to destroy the unit. And that's section eight. That's why I'm just selling everything. Yeah, because I'm looking at the numbers of these and I get this emotional attachment to the properties because I remember every moment, like saving up, finding it, looking at it, fixing it up, putting my own touch on things. Selfishly too, like financially, I got a low property tax basis on all of these and so I'm not paying much of property tax. But the insurance, the utilities, the overhead has gotten to a point now where I could say I could just sell it and make more money doing anything else other than keep these properties. And so I may as well financially. It's just, I kind of, I have to, it just, it makes sense. So it seems to me like Los Angeles and California kicking out what I would call small mom and pop landlords who own one to five units and who else buys it? I guarantee the people buying my places are not going to be mom and pop. They're going to be probably developers who will go in, kick out the tenants, put a six to eight unit building in there and they're going to flip it or they're going to sell it. That's who's going to do it.

[Avi Sinai]

Exactly.

[Podcast Host or Guest (possibly a co-host or another guest)]

So what's keeping Los Angeles real estate high? Because it seems like the prices are still relatively expensive compared to other places, like you're in Las Vegas or just nationwide. If it's such an undesirable place to

[Avi Sinai]

own property, it's an undesirable place to own property. As a business. It's gotten worse recently. Single family homes are at an all time high on the west side of Los Angeles. If you have money, a lot of money, you come to Los Angeles.

[Podcast Host or Guest (possibly a co-host or another guest)]

How much money do you need to live in Los Angeles?

[Avi Sinai]

You need a lot of money to live in Los Angeles, right? A lot of money. If you want to own a house, if you want to live in the good neighborhoods, you have to make, in my opinion, at least three to $350,000 a year. So I got a call about a tenant that was struggling with the rent and I look him up. Name sound familiar? Couldn't afford the rent.

[Podcast Host or Guest (possibly a co-host or another guest)]

How much was the rent?

[Avi Sinai]

It's like 20,000amonth.

[Podcast Host or Guest (possibly a co-host or another guest)]

So why would someone that can pay $20,000?

[Podcast Host Chris]

I guess I can't pay it.

[Podcast Host or Guest (possibly a co-host or another guest)]

But they got on the lease. Yeah, not like, how do you miscalculate so far? Hey, get a place that's 10,000amonth or 15 instead of going for 20,000 when

[Podcast Host Graham]

you can't afford it.

[Podcast Host or Guest (possibly a co-host or another guest)]

Help me make that. Make Sense.

[Avi Sinai]

Look, here's my theory, right? If you are in the business, right? If you are representing famous people, if you're an influencer, you have to live a certain lifestyle. But all of a sudden your expenses catch up to you and all of a sudden you have a couple bad months and you have no savings, right? And that's usually how it happens. The biggest thing is private education. When I see people who cannot afford their mortgage and they're about to lose their home, every single time they tell me my kids private education killed me.

[Podcast Host or Guest (possibly a co-host or another guest)]

How much is private education costing?

[Avi Sinai]

Depends where you go. The best private high schools are about 30, $40,000 a year.

[Podcast Host Chris]

Plus there's extracurriculars. You can't just send your kid to school and pay $50,000 a year. You also have to send them on the trips, all the bonuses, all the this and that, and then, you know, the tutoring too. So those kids, they'll spend $50,000 a year on the school. They'll spend another $30,000 a year on extracurriculars like you want, like karate lessons or you want music lessons and then there's tutoring on time. They're probably spending about a hundred thousand dollars a year per kid to go to that school if they want them to be a top student. And I see it all the time, all the time.

[Avi Sinai]

That's common and that's the reality in la, right? You have to drive a certain car, right? You wear a nice watch, you have to live in a certain neighborhood, you send your kids to private school. It catches up to you.

[Podcast Host Chris]

What about the insurance charges also in California? Because that seems to be an issue. Also that went into my consideration of selling is every year I don't know whether or not I'm going to get an insurance renewal. And what was funny is that it was two years ago. I wanted to lower my home insurance and so I wanted to put everything under one bundle. And I went through a really well known company and it's like the best of the best insurance. And they say, okay, we could do all of this, but nothing in California.

[Avi Sinai]

Wow.

[Podcast Host Chris]

And I was like, okay, maybe it's just them. So I started calling around every single insurance company, this is pre fire, by the way, said we're not insuring it.

[Avi Sinai]

Yeah.

[Podcast Host Chris]

And I called my rep at Farmers and he says, yeah, actually you're really lucky because your current policy is renewing, but they're not accepting any new clients, so you're umbrellaed in. And I was like, well, what is someone to do if they buy a house or need insurance now where do they go?

[Avi Sinai]

The problem I see is in multifamily in apartment buildings because now if you're lucky to get insurance you get exclusions on habitability lawsuits and there is a high chance that if you get sued today not going to be covered by insurance. You can see how one lawsuit and no insurance coverage can just absolutely decimate you.

[Podcast Host Chris]

So why are small landlords disappearing?

[Avi Sinai]

It's a lot easier to make money if you have a lot of units. You can have an in house legal team. You're up to date with the law you have good advisors it costs per unit a lot more if you have just like a small property.

[Podcast Host Chris]

Avi thank you so much for coming on the podcast. Really appreciate it. I'm going to link to all of your information and your twitter by the way in the description that I really enjoy I have notifications turned on so I really appreciate it. Thank you so much for watching. Hope you enjoyed this and until next time.