Can my Los Feliz rental be the property I sell in a 1031 exchange?

1. Talk with your tax adviser first, a CPA or tax attorney, about whether an exchange matches your plans.
2. Engage the intermediary and have its agreement signed well ahead of escrow closing.
3. Organize the building's paperwork: every lease, the current rents, security deposits, any notices served, and registration records if the units are registered.
4. Look up the parcel on ZIMAS for its zone, Hillside Area status and any specific plan.
5. Ask LAHD whether the units fall under the RSO.
6. Set a price from the rents and from nearby sales, and share the showing schedule with the tenants before listing.
7. Line up the closing with the intermediary and with your replacement purchase.

Two things: does the zone match the units already there, and what might it permit in the future? The City's generalized zoning layer shows a mix in Los Feliz: R1 and RE zones on much of the hillside, with R2, RD1.5 and R3 multi-unit zones and some commercial zones on flatter blocks. The parcel's own zone is on its ZIMAS profile. Since a purchaser will line up the number of units against LADBS permits, gather the permit history for each one in advance.

Coverage is possible, not automatic. According to LAHD, the Rent Stabilization Ordinance generally reaches rental units first built on or before October 1, 1978, which can include duplex units and parcels holding two or more houses, while a single-family house that is the only dwelling on its lot generally falls outside it. Exemptions and exceptions exist, so get LAHD's answer for your address before listing. Owners of RSO units must also post an LAHD notice, and purchasers will want the registration history.

For a hillside parcel it can. In the Hillside Area, which City maps show covering most of the Los Feliz hills, Ordinance No. 181,624 sets floor area limits by slope band for R1, RS, RE and RA lots. An investor who hopes to enlarge the house or add an accessory unit will work through those limits before making an offer.

Give proper notice, keep to a published schedule and treat each unit as the tenants' home; your attorney can confirm the entry-notice rules. I group visits into a few planned windows and offer video tours when the tenants are comfortable with them. Some hillside streets have posted Red Flag No Parking signs; on declared Red Flag Days, cars parked there are towed. City data show posted segments on Carnavon Way, Ley Drive and Shannon Road, among others. Parts of Los Feliz are mapped as a Very High Fire Hazard Severity Zone, but not every street is. Check the specific parcel on ZIMAS or the CAL FIRE map, and confirm with the natural hazard disclosure in escrow.

The rents in place and recent sales of comparable nearby buildings, adjusted for condition, the mix of units, parking and what is permitted. Investors also factor in any rent rules that may apply and the capital work ahead. What I give you is an opinion of value, not an appraisal.

Federal tax rules set the exchange deadlines; your CPA or tax attorney and qualified intermediary explain how they apply to you, and I plan the listing and closing dates around them. Your adviser will tell us how the intermediary should appear in the purchase contract and the escrow instructions.

LA County's documentary transfer tax is $1.10 per $1,000 of the sale price; some cities add their own tax, and your escrow estimate shows the exact figure. For qualifying transactions closing after June 30, 2026, Los Angeles Measure ULA imposes an additional 4% tax when the value conveyed exceeds $5,400,000 but is below $10,900,000, or 5.5% when the value conveyed is $10,900,000 or more. The applicable ULA rate is calculated on the full gross value conveyed, not just the amount above the threshold. The City's 0.45% base transfer tax and the County documentary transfer tax are separate charges. Confirm the calculation and any applicable exemptions with your escrow officer.

LADBS requires the seller of residential property in the City of Los Angeles to give the buyer a Residential Property Report before the sale or the close of escrow (LAMC Section 96.300; $70.85 per report as of October 31, 2026). The LADBS Form 9 application says no new report is needed for six months after one is issued, and it lists exceptions, including property exempt from the documentary transfer tax and the first sale of a home in a subdivision whose final map was recorded not more than two years earlier. Check your transfer with LADBS before ordering.

The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker.

What to bring to your CPA or attorney: purchase and improvement records, depreciation schedules, the rent roll and leases, the qualified intermediary's agreement, the estimated closing statement, and details of any replacement property you are considering (IRS Form 8824 is the reporting form).

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Sidney Manzo, CA DRE #01108914
In real estate since 1990 · RE/MAX Hall of Fame · Member, Pasadena Foothills Association of REALTORS® and California Association of REALTORS® (C.A.R.)
Brokerage: RE/MAX Dream Properties (ASLG Inc), CA DRE #02142193