Investment Info:

Small multi-family (2-4 units) other investment in San Diego.

Purchase price: $450,000
Cash invested: $250,000
Sale price: $731,000

The first of our "Shovel-Ready" ADU Concept. We bought a SFR and got three additional ADUs permitted on the back of the property, then sold to another investor. We were in and out in about 7 months and had roughly $200K in gross profit. It was a great project and proof of concept.

I detailed the project on YouTube in a 5 minute video:
https://youtu.be/WgW0r1Jij_Q

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

It has a similar timeframe as a medium flip but adds way more value. I like adding units in San Diego and the entitlement is a huge part of that process. The house was on a big, flat, multifamily zoned lot, so by right, we could definitely add units.

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

The SFR was purchased from a wholesaler.

How did you finance this deal?

We used a hard money loan and financed the down payment with a HELOC.

How did you add value to the deal?

We barely touched the house....all the value was based on the "Approval" from the development office to entitle the three additional units.

What was the outcome?

We sold the project in about 7 months and made a great spread!