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All Forum Posts by: David Maldonado

David Maldonado has started 50 posts and replied 152 times.

Post: Forever home build

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

Hello everyone,

I'm an investor and contractor from Santa Maria. I got started by househacking and building ADUs as an owner builder. Things have been going well that I am waiting on plans for 3 more ADU builds. After I finish building the ADUs, I will be pulling out what I used for the builds through a Heloan (currently have a heloan to finance the ADUs).

After that, my parents and I are going to partner up and purchase land in slo or santa barbara county area to build our forever homes. The plan is to build the main house for my family to live in and a detached ADU for my parents. The other option is to build a 2nd single family residence, but the ADU route would be easier and cheaper (especially in fees).

Has anyone here built a house on land in slo or santa barbara county?  I would love to hear about your experience!

Post: California ADU business

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

Hi everyone,

It has been a while since I last been on here,

I was able to get a HELOAN, on my primary with 2 ADUs, to build more ADUs on my rentals.

I am getting plans drafted for 3 ADU builds as an owner builder. I am going to document costs and upload videos showing the construction process.

My goal is to build each unit at $100 per sqft or less. I will be doing most of the work and subbing out what I can't do on my own. I was able to build my personal ADUS back in 2022 and 2023 at $90 per sq ft, but I subbed a few more trades that I will be performing on my own on these next builds. I used basic finishes that anyone can find at home depot or lowes. 

If anyone is interested in learning more about the ADU process, feel free to follow my journey on instagram: davidm1158 tiktok: @sweatequityinvesting

Post: Home purchase loan and Home style for ADU build

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81
Quote from @Dan H.:
Quote from @David Maldonado:
Quote from @Caroline Gerardo:
Quote from @David Maldonado:
Quote from @Caroline Gerardo:

Homestyle/Choice/reno loans are first trust deeds not a piggyback or second after closing. This means you close your purchase and pray the appraisal with the proposed ADU has the value you think. The problem is a house+ ADU does not appraise in comparable sales to a duplex or two houses. You need to find single family with ADU that sold in your planned purchase tract that appraises high enough to make this work. Problem is there will be few or no such sales.

How much down payment are you planning? 

ADUs in my area add a decent amount of value to a property, but I understand. What would happen in a situation where if the adu doesn't add the necessary value?

As for the down payment, most likely the minimum. I believe it's 5% down for owner occupied.
IF No comparable sales meet your value, no loan available as is over 100% loan to value financing. Orcutt one sale - sold for $4000 more than similar square foot sfr, The Groves and Vista Del Sol no SFR sales with an ADU exist in past 90 days.  
The loan programs you are reading about are PURCHASE loans with 10% down not refinance ones which reduces the loan to value even further down. 
Minimum ADU cost including installation for a tiny one is $110000 and a 800 square foot one is $165000. The value the ADU adds to appraisal might be $10000 more than an SFR.
It will be difficult for you to search sold SFR with ADU as automated valuations do not yet even include them, they show as SFR.
(SFR= single family) 
There are modular kit homes that finance as a second trust deed, this is probably your ONLY choice if you only have 10% down. BUT you need to qualify with the first PITI and second being a 15 year amortization.
The market does not recognize ADU as adding much appraisal value, yet. 

I appreciate all of the information.

My current home has a JADU and an ADU. Homes in my neighborhood average at $650k, a similar home, with both a JADU and ADU sold for $1,025,000 i neighborhood.

I believe there is another up for sale right now for about the same price in Santa maria. But I know more comps are probably needed
(assuming it sells).

ADUs are definitely expensive to build. That's where I save a lot of money on the build. I'm a contractor, I'd be self performing most of the work.

I wonder when more comps will come up for the ADU values.Most people in my area build ADUs for extended family, so I don't see it happening anytime soon.


Can you post the address of this property that sold for over $1m with ADU with a value of $650k without the ADU? In general JADU reduce value and many realtors recommend their removal at time of sale. ADUs in SF zones areas add far less than the hands off cost to add the ADU. A valuation of $375k would be extraordinary.

If you want an ADU, best is to purchase a property with existing ADU. You will likely pay less than half the addition cost, be able to obtain convention f/f financing, will not have to do the work, will not have to deal with a construction zone, will not have cash outlay months before first associated income, etc.

Good luck


 Hi Dan,

1002 Dejoy St Santa Maria, CA 93458

503 E Monroe St, Santa Maria, CA 93454

the first one sold a few years ago and the 2nd one is for sale.

I would have to search the comps for the properties with 1 adu. You'd have to play with the search engine on zillow to find them.

As for the 650k price, that's specifically for my neighborhood. The avergae home in Santa Maria is $620k.

Post: Home purchase loan and Home style for ADU build

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81
Quote from @Caroline Gerardo:
Quote from @David Maldonado:
Quote from @Caroline Gerardo:

Homestyle/Choice/reno loans are first trust deeds not a piggyback or second after closing. This means you close your purchase and pray the appraisal with the proposed ADU has the value you think. The problem is a house+ ADU does not appraise in comparable sales to a duplex or two houses. You need to find single family with ADU that sold in your planned purchase tract that appraises high enough to make this work. Problem is there will be few or no such sales.

How much down payment are you planning? 

ADUs in my area add a decent amount of value to a property, but I understand. What would happen in a situation where if the adu doesn't add the necessary value?

As for the down payment, most likely the minimum. I believe it's 5% down for owner occupied.
IF No comparable sales meet your value, no loan available as is over 100% loan to value financing. Orcutt one sale - sold for $4000 more than similar square foot sfr, The Groves and Vista Del Sol no SFR sales with an ADU exist in past 90 days.  
The loan programs you are reading about are PURCHASE loans with 10% down not refinance ones which reduces the loan to value even further down. 
Minimum ADU cost including installation for a tiny one is $110000 and a 800 square foot one is $165000. The value the ADU adds to appraisal might be $10000 more than an SFR.
It will be difficult for you to search sold SFR with ADU as automated valuations do not yet even include them, they show as SFR.
(SFR= single family) 
There are modular kit homes that finance as a second trust deed, this is probably your ONLY choice if you only have 10% down. BUT you need to qualify with the first PITI and second being a 15 year amortization.
The market does not recognize ADU as adding much appraisal value, yet. 

I appreciate all of the information.

My current home has a JADU and an ADU. Homes in my neighborhood average at $650k, a similar home, with both a JADU and ADU sold for $1,025,000 i neighborhood.

I believe there is another up for sale right now for about the same price in Santa maria. But I know more comps are probably needed
(assuming it sells).

ADUs are definitely expensive to build. That's where I save a lot of money on the build. I'm a contractor, I'd be self performing most of the work.

I wonder when more comps will come up for the ADU values.Most people in my area build ADUs for extended family, so I don't see it happening anytime soon.

Post: Home purchase loan and Home style for ADU build

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81
Quote from @Caroline Gerardo:

Homestyle/Choice/reno loans are first trust deeds not a piggyback or second after closing. This means you close your purchase and pray the appraisal with the proposed ADU has the value you think. The problem is a house+ ADU does not appraise in comparable sales to a duplex or two houses. You need to find single family with ADU that sold in your planned purchase tract that appraises high enough to make this work. Problem is there will be few or no such sales.

How much down payment are you planning? 

ADUs in my area add a decent amount of value to a property, but I understand. What would happen in a situation where if the adu doesn't add the necessary value?

As for the down payment, most likely the minimum. I believe it's 5% down for owner occupied.

Post: Home purchase loan and Home style for ADU build

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

Hi everyone,

I am planning on purchasing another home to househack and I would like to build an ADU ASAP after closing on the house. I've read that with the homestyle loan, an ADU can be built and the funds from the homestyle loan will be added on top of the home purchase loan.

The ADU will offset a big chunk of the mortgage.

Anyone go this route? 


Does anyone know or any lenders that offer this?

thanks!

Post: New Construction Company

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

@Janelle K. Eagle Thank you! Hopefully I can be of help!

Post: New Construction Company

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81
Quote from @Allen Maris:

Well done, David!

I’ve worked with David on a couple projects. He’s a good guy and works hard. I’m looking forward to working with him again!


 Thank you Allen!

Post: New Construction Company

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

Hello everyone,

I recently obtained my Residential remodeling contractors license and have started my construction company: Sweat Equity Construction. My company is Veteran owned and operated. I have acquired my experience from working on my personal live-in-flips and building ADUs, as an owner builder and self-performing most of the work. Through that process, I discovered my passion for construction, specifically finish work.

I wanted to continue house hacking and build more ADUs, but I have been priced out of the market. I can't make the numbers work with these rates and high prices. So I decided to hold off on purchasing more properties and focus on growing my construction company. I have been blessed to own a few properties with ADUs that have allowed me to quit my job early last year. 

As an investor, I understand there are remodeling budgets that must be met for remodeling, and labor costs can be high. All I want is an opportunity to master my craft and continue doing what I love, working on houses, in exchange for exceptionally fair prices. My company is veteran owned and operated.

I am interested in working with investors in the San Luis Obispo, Arroyo Grande, Nipomo and Santa Maria areas, but open to outside areas in California.


I plan on getting my general contractors, as soon as I qualify to take the exam, to become an ADU builder. ADU is my niche in real estate and the laws are only going to get better for ADUs in the future.

Post: Best way to prepare for CA CSLB General Contractor B License

David MaldonadoPosted
  • Rental Property Investor
  • Santa Maria, CA
  • Posts 158
  • Votes 81

Hi Krystal,

I have recently been issued my Remodeling contractors license. The business and law portion should be the same for the general contractors exam. I have a business degree so I knew a good amount before I took the law exam. I used an online crash course and it helped, also for the trade exam. The courses really help, only if you actually study the material with the intention to learn instead of memorizing the material and the practice questions. I passed both exams first time and I'm not what you would consider "book smart". All of my qualifying experience came from live-in-flips and building ADUs as an owner builder.

Hope this helps and good luck to your husband!