All Forum Posts by: Dan Sundberg

@Nick Sandoval - hey Nick, sorry somehow missed the callout/question. Agreed, travel nurses seem like great tenants for an ADU, especially a smaller space that would be hard to otherwise market to a long-term tenant.

my favorite right now is https://www.furnishedfinder.co... for marketing the property. I believe you can also do Airbnb/VRBO and set to monthly minimum. I'm not going to advertise on those sites though because the fees on furnished finder are way less and that seems to be the go-to for this niche. 

As for the deeper dive on marketing, I have several friends who are nurses and have done travel nursing, and have been asking them what would be important to them in a great rental. That gave some good ideas for amenities to include in the property, things to make sure and furnish it with, etc. 

You should be fine to represent yourself in other CA markets, regardless of where you have your home base, so long as your are licensed in the state. The trouble you may run into depends on how you plan to get the properties in Sac/Fresno. If you're going to do all your own deal finding, build relationships with wholesalers, etc., then you should be fine. However if you want to do anything on-market and self-represent you will not have the right MLS or association memberships to access properties in Sac/Fresno and would need to get a Co-op setup with those associations too.

I'd suggest also weighing the pro's and cons of self representing in markets so far out. It sounds like you're already an experienced investor, so this may not be an issues. But by self representing, you are going to save maybe 1.5% - 2% on each transaction after the costs of being a Realtor...is that number larger than you'd save by getting hooked up with a local Realtor who can help get you a team, off market deals, local expertise, your time back from the 3-5 hour drive, etc...?

Ultimately, I'd suggest just joining up with a brokerage that has more of a state/national presence like eXp or Keller Williams, rather than a local indie brokerage and you should be fine. Although @Anthony Dooley's advice is good, to talk to the broker first just to make sure. I'm part of a team that has offices that work closely together from the South Bay through Sac, Stockton, and even growing into Fresno. DM me and I get get you more info on them too. 

RealEstateExpress is another good option too for really low cost certification courses. It all depends on how much support you want in your coursework. I'm a Realtor in the Sac area too - DM me if you want to chat more about being a Realtor in this area/how to make it work.

https://www.realestateexpress....

I've found in general Elk Grove is going to be about $50k - $100k more for similar homes compared to Natomas. Elk Grove is also hyper competitive right now, so if it was strictly for rental purposes I'd lean towards Natomas. (Natomas is still really competitive too though). If you found a good deal in either though, it would be hard to go wrong...

Nice! That sounds like a really solid property. When do you think you'll finish up? 

Yeah good question. So the plan is to do furnished rental medium term (travel nurses). I'm planning for $1,500/mo, but comps show it could go as high as $1,800. Utilities will be around $125/mo (I'm paying all since lease terms are so short), and budgeting for a slightly higher vacancy rate, since turns are more frequent. I've managed to fund the construction without debt, so cash flow on this project will be around $1250/mo on the ADU on the low end. The main house is also rented, and that is currently at a negative cash flow, so when it's all said and done pure cash flow should be closer to $900/mo. If we get the high end, and account for rent increases when the current lease on the main house ends in July we'll be closer to $1,500 pure cash flow.

I'll be super curious if you hit those numbers, as that would be a slam dunk for pricing. Are you planning to do any of that work yourself? That was about my budget too when I started, lol...also my first project. 

I'm finishing up an ADU garage conversion in Downtown Sac and plan to do medium term rental for travel nurses. The logistics are simpler since as you get 4-5 turns/year and it isn't affected by the city ordinance on STRs. Also, long term, I expect Sac will enact tougher restrictions on STR, given the intense housing crunch we're experience, so I personally don't expect that to a be a good long term strategy. However the medium term rental seems like a good option. Our 275 sq ft furnished garage should rent for $1600 - $1800/mo and the only extra fees compared to long term is $99/yr to post on furnishedfinders.com.

...I should have this finished by the end of next month, so can keep you updated on whether this plan works and what we rent for. 

Is the property a single family? It looks like single family rentals may be exempt from the Sac Tenant protection program. Definitely double check with someone more knowledgeable than me before increasing rents, but in section 5.156.030 "Exemptions." of the tenant protection doc it lists "Single dwelling units and rental units in a condominium or stock cooperative"

City of Sac tenant protection code

That said, I am personally not going to increase more than 9% on my single family rental...

@Hannah Joy - Sounds like a great project! I'm nearing the final phases of converting a ~275 sq ft garage in Sacramento to a Studio space and should have a full post-operation breakdown of all the costs soon. But rough costs are below. 

There were 3 big learning points. 

First is appreciating how much of an impact the building dept has on how easy/hard the project will be. Sac is pushing pretty hard for ADU development, so we had a surprisingly easy time getting the whole thing pushed through. Some people in the next city/county over (West Sacramento) are have a much tougher time.

The second was the foundation, which was an unfortunate surprise. The house is ~100 years old, and the foundation was a simple slab with no footer. The city inspector was flexible with our solution, but we wound up digging a trench around the whole perimeter of the garage and filling in 16"x20"x70' of concrete to add a footer...

The last one was drainage. The old garage was never well designed for drainage in the first place, and after the record rain last Fall we discovered it was the low point in the yard and water was coming into the garage. We solved it by regrading and adding a somewhat elaborate drainage system when we dug out the foundation/footer. 

Costs: 

• Prep (permitting, design) - $4,500
• Concrete work (front/rear patio, new footer, drainage) - $9,000
• Plumbing (sewer/supply, rough, finish) - $8,000
• Electrical (separate meter, panel, rough, finish) - $7,500
• Rough work (demo, framing, insulation, drywall, doors/windows) - $20,000
• Finish work (flooring, kitchen, bath, paint) - $20,000
• Misc appliances - $6,500
• Total - $75,000
• This was, of course, over budget. But it will still be a pretty good cash flow. Curious to know what your numbers are too!

Hey @Tim Kunz - the project isn't finished yet, I accidentally submitted this post, lol. I'll do a more thorough one when it's all done, but here are some shots of the garage right now. If you're planning to be around the Oak Park/Medcenter area any time in the near future shoot me a message and I can show you the place in person. The permitting process was actually fairly painless. It took a couple months all together and the city accepted it on the first go with no revisions at all. Happy to talk through this in much more detail too if you're interested.