All Forum Posts by: David Maldonado

Hello everyone! I'm still a beginner in the real estate investing world. Read countless books on real estate investing and own my first sfh with an ADU. I am currently house hacking and have all my extra rooms rented out to live for free until I fullfill my 1 year occupany (ends in Dec 2019) in Santa Maria. I am moving to Fresno for school in Jan for the spring semester, but the main reason is to move further in my real estate business. Fresno appears to be more affordable than most cities and from my research thus far, returns are pretty good for mulit family homes and is filled with college students looking for places! Just want to hear opinions from experienced investors in Fresno area. I plan on getting a quadplex and live in one of the units while I go to school and house hack and repeat until I finish school. Once settled in, I plan on partnering up with my old man (experienced investor in my hometown and the person who taught me the business) and tackle our first flip since we can compete with cash buyers there.

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Originally posted by @John A Murray:

Originally posted by @David Maldonado:

Originally posted by @Ben Aragon:

@David Maldonado Thanks for sharing this new update in ADU rules!

I have started working with architect on my LA southbay rental to convert a detached garage. Since you have 488 sqft, I'm assuming that you have extended the existing (typically 400 sf) garage? Does entire foundation needs to be replaced on these conversions or is the existing garage foundation enough? If it does need replacing, will it be cheaper to build on top and have a raised foundation instead? Thanks for any input..

No I didn't have to extend. It was a 2 car garage. A little bigger than normal I guess lol. The foundation did not have to be replaced. I didn't replace it. I didn't think the cost to level it with the house was worth it. Plus the ceilings look like their about 8in higher from the house!

David what did you do with the foundation where the big garage door sat? Cut out enough of the old floor, dig and pour a raised foundation?

I had to add a section of concrete that connected both ends where the concrete stop by the garage door. Pretty much the end product is a square of concrete all around the garage.

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Originally posted by @Ben Aragon:

@David Maldonado Thanks for sharing this new update in ADU rules!

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Originally posted by @John A Murray:

Originally posted by @Hobie Day:

@David Maldonado very informative thread you started, thanks!! I just got into my first house hack, it's a SFR with a separate 886 sq ft ADU (2 bed, 3 bath) that was converted from a pool house prior to my purchase. I am now considering filling the pool that's next to the ADU and either extending the ADU 314 sq ft (max 1200 sq ft) or adding a JADU (didn't consider this option until reading this post) but I'm wondering if you, or anyone on this thread, has any experience filling and building on top of pools? I have a GC coming out next week to provide estimates but am looking to get multiple opinions/advice

I would want to make sure that the anticipated rental income increase would justify all the expense to add 300 sf. When you say adding a JADU what exactly do you mean?

A JADU is usually an existing space (the garage) converted into a separate living unit but is 500 sq feet or less) the bill allows a JADU and an ADU (above 500 sq ft)

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Originally posted by @Hobie Day:

Hey thanks! But no I do not have experience building on top of pools but let me know what the gc says!

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Originally posted by @Matthew Forrest:

@David Maldonadoalfaro

This may just be me, but I haven't seen anything stating that the owner needs to live on the property to rent the units. My city has a provision that I needed to live on the property to developed the ADU (this will be going away), but again I never saw anything that said anything about owner occupied requirements for renting.

If anyone knows any areas that have a requirement like this, I’d like to hear more about it.

I think that's just based by county. My county made me sign an owner occupancy covenant before I even built the unit but starting January 1st, that will be voided.

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Originally posted by @Nick Hu:

In SB-13, it states: "this bill, until January 1, 2025, would instead prohibit a local agency from imposing an owner-occupant requirement as described above". So for ADU developed between 1/1/20 to 1/1/25, does it mean it will not require owner-occupancy even after 1/1/25 (which means these properties are exempt from owner-occupancy completely), or they are exempt from owner-occupancy before 1/1/25, but might still require owner-occupancy after 1/1/25?

I would like to know that as well but I'm sure it's more for Units built after that time (if it isn't renewed) because how would someone with multiple ADUs be able to occupy all of them?

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Originally posted by @Damaso Bautista:

@David Maldonadoalfaro

Thanks! I printed out SB13 and read it. The provision that my city government was using to stop whole neighborhoods from adding adu’s was addressed.

Now I am able to build an adu on my properties.

Glad to hear that!

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Originally posted by @John A Murray:

That's what I'm talking about David. I mean, I see all these really beautiful interiors, these $200k ADU's, but what you've got is all most people need. There are so many inexpensive ways of doing things. I plan to have some cool space saving things such as a "Murphy" kitchen table, desk and bed. Additionally I will have multiple skylights, lot's of window area and one maybe two French/sliding doors. I'd like to have a cathedral ceiling (drywall right under the roof rafter) and a big ceiling fan. There are cool things you can do with a concrete floor,concrete counter tops and concrete shower. I will be the contractor and do some work by myself, no hurry, and I hope to keep it around $30k.

David what did you learn that you feel is important/not important?

Here's my two car garage:

Nice layout. It looks similar to mine. When I researched and saw that an ADU can cost up to 6 figures I was shocked. It all depends on the area. For my area it isn't worth going the extra mile or spending extra money for something big and luxurious. What area are you planning to build the adu?

What I learned what is most important is to know your market and the types of tenants these units will attract. What I mean by this is: do people look for luxurious apartments? Affordability? College students looking for a place? For my town tenants look at affordability and prefer the residential area over apartment structures.

Another thing that's important is to not go all out and spend money that you don't have too (for the purposes of a rental). The only time its worth spending extra money on materials that will be durable aka tenant resistant. It's good that your are going as owner builder because that's how you learn about the codes, estimating costs for future projects, and much more.

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Originally posted by @John A Murray:

Tim you are out of luck it appears. I don't see any way you could shift things around to get the results you want.

There are no multi-unit rentals in my neighborhood only SFR's. I asked an appraiser how he would determine value of SFU with an ADU and he said that not having comps is the problem. He said something like 20k to 50k for a basic ADU but that's nuts. Having a small unit that would pay half of your mortgage payment is worth way more than 20-50k.

This happens when people overbuild for the neighborhood. A buyer would have to come in with a fair amount of cash. Most already do as they are trading up and have equity in the home they are selling. I think the only immediate problem is if one were to get carried away and put too much money into their ADU and plan on selling soon.

David thanks. Now would you be interested in putting up a few pictures?

My wife will be in heaven as I'll make sure she comes along when we buy everything. Shopping and spending!

I got ya! Here are some pictures of my adu!