Accessory Dwelling in OC California - Is it worth it?

[Matt Inouye]

Hello BP Community,

I wanted to reach out and get opinions from local flippers/rehabbers who have done accessory unit additions in orange county california.

I have gotten quotes ranging from 150-200/sqft to almost 250/sq to build a new accessory unit and I am trying to dial in a better estimate to figure out what the cost/benefit might be and if this might be a deal.  My intention is to flip but I can also take on as a buy and hold.

Coming up with good comps is a little harder... as some properties have accessory units, some don't and some are zoned R2.  That being said, with properties with similar floor plans and accessory units I am seeing sales in the range of 850-895K in late 2017.  Single dwelling with smaller floor plans are 650-700K in 2016

Property under contract 620K

City of Orange

Directly across local university 

Zoned: R1

6000 sq ft

3bd/1ba - 1500 sq ft main dwelling

$2700 rent for main dwelling

main dwelling needs 50k of rehab on its own

allowed up to a 640 sqft accessory unit with an attached garage that does not count against 640 sq ft.

public access way available to accessory unit garage

$1800 potential rent for accessory unit

Have at it BP.  Would love to get schooled and see if there are things I still need to account for.

Mahalo,

Matt