ADU-Ready Flip in San Juan Capistrano: A Profitable Transformation

[Marco Chaidez]

Investment Info:

Single-family residence fix & flip investment in San Juan Capistrano.

Purchase price: $1,250,000
Cash invested: $260,000
Sale price: $1,840,000

Coastal Dream Home - Renovated with ADU Plans!
Discover your 2,350 sq. ft. coastal oasis on a spacious 17,000 sq. ft. lot. This fully renovated 4-bedroom, 3-bathroom home features high ceilings, modern finishes, and a downstairs bedroom for convenience. Enjoy the beautifully landscaped backyard with a covered patio, pool, spa, and RV parking. Preapproved ADU plans offer extra space or rental potential.

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

This property had strong potential for adding value, especially with its ADU (Accessory Dwelling Unit) potential. Deals with approved ADU plans are especially attractive because they offer a higher return and flexibility for future buyers, making it a prime investment opportunity.

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

We came across this deal through our trusted network of contacts, which we’ve cultivated over years in the industry. Negotiation involved a thorough analysis of the property’s potential and local comps, allowing us to secure it at a price that would ensure profitability after renovation.

How did you finance this deal?

We financed the project using other people's money, leveraging a combination of hard money lenders and private money lenders. This approach enabled us to move forward with minimal delay, giving us the flexibility to work efficiently within the timeline we set.

How did you add value to the deal?

Our primary value-add was a full renovation to modernize the property and increase its appeal. Although we initially planned to complete the ADU, we ultimately chose not to build it out to meet the demand in the summer market. Instead, we sold the property with the approved ADU plans, allowing future buyers to add value if they wished.

What was the outcome?

The property sold successfully and exceeded our profit expectations. Selling it with the ADU plans in place attracted buyers interested in immediate added potential, which helped us complete the deal efficiently.

Lessons learned? Challenges?

We learned the importance of flexibility. Although building out the ADU could have increased the value, the opportunity to hit the summer market and sell quickly worked out well for us. Timing can sometimes be as valuable as improvements in this business.

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

Yes, we collaborated with experienced agents and knowledgeable lenders who specialize in investment properties. Working with seasoned professionals was essential to navigating this project smoothly and meeting our goals.