Why Compliance Has Become the Biggest Operational Risk for California Landlords

Independent rental owners (IRO)—often referred to as “mom-and-pop” housing providers—are small-scale owners and operators making a difference in local communities across the country. Among the 49.5 million rental housing units in the U.S., nearly 46% of them are small rental properties, over 70% of which are owned and self-managed by small-scale owner-operators, according to the National Association of Realtors. IROs are, in many ways, the backbone of the affordable housing stock in many major cities nationwide. Here are two individuals who embody the essence of IROs with unique stories. Meet Lynnette Horton Lynnette Horton is a resident of Boise, Idaho, and for nearly two decades, she has skillfully managed her family’s extensive portfolio of 357 units. Following a career in law enforcement, Horton made a purposeful decision to join her family’s mission of providing housing to renters within her community. Horton and her company, CBW Properties, hold a unique perspective when it comes to their residents. To them, residents are not merely faceless unit numbers; they are regarded as an extension of their close-knit, family-like community. The company takes genuine delight in commemorating residents’ birthdays, sharing their moments of happiness, and extending a supportive hand during challenging times. Similarly, CBW Properties recognizes that vendors and suppliers are the lifeblood of their operations. When challenges arise, the team turns to these essential partners for resolution. In return, suppliers provide the vital materials that fuel the company’s endeavors. On an annual basis, CBW Properties expresses deep appreciation to their suppliers and vendors through a heartfelt appreciation BBQ, a warm gathering where they honor and celebrate these crucial contributors. This event is not limited to employees; it extends to include their families as well. Within their team, every member is embraced as a part of their close-knit family, guided by a simple yet powerful motto: “Work hard and play hard.” Horton’s company is also deeply committed to giving back to the community in various meaningful ways. They come together as a team to serve local shelters, deliver meals to the less fortunate during the holiday season, collaborate with nursing centers, and engage in a multitude of service projects. Their goal is to serve their community at least once per quarter, demonstrating their unwavering commitment to making a positive impact. Moreover, CBW Properties pays it forward by directly assisting those in need. Horton, in her role as the company’s Regional Manager, instills a sense of benevolence by offering a month’s rent to a deserving family who may be experiencing financial difficulties. She encourages her staff to identify families in need, and this act of kindness is not only a blessing to the recipients but also holds deep personal significance for Horton. She is acutely aware of the blessings she’s experienced in her career and recognizes the impact of providing countless families with the home they deserve, a place to cherish and respect, every single day. Meet Lorenzo Donatelli With only $50 in his pocket and a third-grade education, Lorenzo Donatelli’s venture to the United States marked the start of an incredible story. His first encounter with the English language unveiled the harsh realities of unfamiliarity and was a foreshadowing of the challenges ahead. Initially, Donatelli lived in a spare room with his aunt and uncle in Pacoima, a neighborhood nestled within the vast expanse of Los Angeles. He entered the workforce as an asphalt layer, a grueling job that he considered one of the most challenging. He later tried his hand at bricklaying before landing a job at General Motors (GM). With the assistance of his cousin, Donatelli secured a position as a floor sweeper at the GM assembly plant. On one occasion, a critical issue arose on the assembly line, prompting Donatelli to swiftly abandon his broom and step in to assist. This spontaneous action led to a summons to the office of the plant’s head, and initially, Donatelli feared he might face dismissal. To his surprise, the plant leader was deeply impressed by Donatelli’s initiative and promptly promoted him to the metal finish assembly line. Paired with an experienced employee, Donatelli received a crash course on the job. The mentor provided him with the tools of the trade and clear instructions. With a reassuring wave, the seasoned worker affirmed, “you’ve got this,” and indeed, Donatelli did. After about three years, Donatelli ran the entire division, working multiple shifts regularly. During this time, Donatelli was able to buy his first rental property, a house in Pacoima. With unwavering determination, he was able to pay for it in a year by working night and day. Driven by ambition, he decided to sell that house to buy a larger home in Burbank, where he carved out a one-bedroom and bathroom for himself and rented out the rest of the home to another family. He then saved every penny and purchased the house next door to rent out as well. Within five years, he had expanded his real estate portfolio and had bought most of the block while still living in his one room and paying off all debt owed. However, life took an unexpected turn, and after 15 years, a piece of equipment on the assembly line malfunctioned and he hurt his back, leaving him unable to work on the line and ending his time with GM. With vision and hard work, he went on to construct a 10-unit apartment building, a testament to his resilience and his commitment to the community he held dear. Today, this apartment building stands as a vibrant hub, housing numerous families and bearing witness to Donatelli’s unwavering dedication to shaping his neighborhood’s future. Donatelli’s story is a lesson in determination, resourcefulness, and the ability to turn challenges into opportunities. Through his hard work and investments, Donatelli not only improved his own life but also contributed to his community by providing housing for multiple families. It serves as an inspiration for anyone facing obstacles on their path to success, showing that with the right attitude and hard work, one can overcome difficulties and create a better future for themselves and their communities through real estate investment and management. —Powered by IRO Check out the original article published in the National Apartments Association's (NAA) March Digital Magazine .