Suggestions on Financing ADU's in Los Angeles

[Rudy Dvorak]

I am looking for ideas on getting some private money. I have 12 unit rent controlled property in Los Angeles (Glassell Park 90065)

value $3.6M at

Total rents - $21,400 - $256,800 annually = not 1 late through covid

Less than 1/10th of 1% active vacancy in the last 8 years.

100's of inquiries in 24 hour recently when we post an available unit(s). = overwhelming demand

C area - C property - 1ea 3 unit building built in 1924 AND 1ea 9 unit building built in 1950

currently Chase loan - is at 3.61% - owe $1,999, 540 - adjusts in 3.5 years

by right I can build 3 adu's in current 1500 sqft basement. Biggest challenge is digging out, to get the necessary 7' 6" ceiling height. currently we have a bout 7'.

something like this might work.   for $150K to build out the 3 units. secured by a second mortgage on the property. 6ish % interest. 1 or 2 points. payments start upon lease start dates. $3000 monthly patyments that include principal and interest.  36 month balloon payment.  no prepayment penalty.  about 4 months construction schedule. We will submit plans to city shortly.  Projected rents for 450sqft studios is $2,000 per unit. Happy to discuss creative ways to get this funded.

We are day to day, 24/7 managers of every aspect from design, to permitting, to construction, to property management to maintanance to leasing and marketing. we have a track record of success, and we manage our 30 tenants across 5 properteis in Southern California.

[Denver McClure]

Hi Rudy, @Jeff Nash and I can help find the best financing option for you. We have the ability to identify and vet a multitude of loans, including those that may help you out in this situation (commercial, construction, asset secured and un-secured, small business, margin, etc). Feel free to PM either one of us if you'd like to chat.