ADU success in La Mesa, Ca!

[Savannah Inderwiesche]

Investment Info:

Single-family residence buy & hold investment in La Mesa.

Purchase price: $555,000
Cash invested: $85,000

Purchased the home as a live-in fixer. We converted the 2-car garage into a 1 bed, 1 bath 400 sqft ADU and updated the main house. We plan to hold and rent this property. However, the home recently appraised for 950k.

What made you interested in investing in this type of deal?

Accessory dwelling units have been a very popular thing in the area with the pending housing crisis. This property had the perfect layout to split the yard for both units.

How did you find this deal and how did you negotiate it?

This was my very first deal and I found it on Zillow! This was right at the beginning of the pandemic when people were scared about what was happening in the world and were not making big purchases in real estate. My agent put an expiration on our offer (at 5k below asking). We were also able to close in 14 days with a conventional loan. This along with no request for repairs (bought it as-is) made our offer competitive.

How did you finance this deal?

Conventional loan

How did you add value to the deal?

Converted the 2-car garage to a 400 sqft. 1bed/1bath accessory dwelling unit (ADU). The main house (3bed/2bath/sqft) was renovated also.

What was the outcome?

We purchased the home to hold as a rental investment property. We purchased the home for 555k, put 85k into it. We had it as an Airbnb for 1 year and were very successful. The property was recently appraised and came in at 950k.

Lessons learned? Challenges?

The electrical panel box needed upgraded to a 200 amp panel. This was a very long process. If I knew this from the beginning of the project I would have completed this first. Getting permits with the local utility company was a lengthy process.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! We worked with Ami Lewallen at Red Rhino Realty! She was very quick, knowledgeable, and responsive. I highly recommend her!