All Forum Posts by: David Maldonado

Quote from @Robert Ellis:

Quote from @David Maldonado:

Quote from @Jaron Walling:

@David Maldonado How much equity are you going to leave in this property? I'd be asking myself that question. I can't see the numbers penciling otherwise but I'd love see how it could. 

New construction and BRRRR don't work like it does when you buy distressed properties below market and rehab them back to market value. There's no value add component. New construction doesn't benefit from the spread of value add vs ARV.

Hi Jaron,

I won't know until I find out what the total costs are from the city to build (permits, school fees, impact fees, required improvements etc.) and the cost to run utilities. This is the part where I need guidance in from experienced build to rent investors.

I've built one of my 745 sq detached adus for an all in price of about 70k (plans, permits, fees, construction costs etc.) That is currently renting for $2300 per month. This was during covid when lumber prices skyrocketed.

I think new construction deals are hard to BRRRR, if its hands off construction (unless you get the land at a very good price). I will be performing most of the work on the new builds, so I'd save quite a bit on labor. 

 exactly correct. land cost drives everything and location. before we vet any deal in columbus or any market we look at land cost, tap fees, plans, rezoning fees, and then exit price as well as what the property will sell or rent for. that's why we build as small as possible units for single family and houses under 25% of the average size home in our market 

Interesting. How did you know where to look to estimate all the soft costs involved with a new construction project? 

Quote from @Jaron Walling:

@David Maldonado "I've built one of my 745 sq detached adus for an all in price of about 70k (plans, permits, fees, construction costs etc.) That is currently renting for $2300 per month." - OMG that's incredible. Wish you could go back in time and build 5 more?... ha

Thank you! I was able to build 4 of them and I'm saving money to build a 3rd detached ADU on one of my properties that currently has an attached ADU and a JADU. But unfortunately I got priced out of my market. Way too much demand and I don't have the capital to compete with other buyers in my area.

Quote from @Jaron Walling:

@David Maldonado How much equity are you going to leave in this property? I'd be asking myself that question. I can't see the numbers penciling otherwise but I'd love see how it could. 

New construction and BRRRR don't work like it does when you buy distressed properties below market and rehab them back to market value. There's no value add component. New construction doesn't benefit from the spread of value add vs ARV.

Hi Jaron,

I won't know until I find out what the total costs are from the city to build (permits, school fees, impact fees, required improvements etc.) and the cost to run utilities. This is the part where I need guidance in from experienced build to rent investors.

I've built one of my 745 sq detached adus for an all in price of about 70k (plans, permits, fees, construction costs etc.) That is currently renting for $2300 per month. This was during covid when lumber prices skyrocketed.

I think new construction deals are hard to BRRRR, if its hands off construction (unless you get the land at a very good price). I will be performing most of the work on the new builds, so I'd save quite a bit on labor. 

Hey y'all,

Anyone utilizing the build to rent strategy in or around the fresno area? I am interested in pursuing this strategy, but I don't have any experience with new construction, besides ADUs.

My plan would be to build traditional 3 bed 2 bath single family homes with detached ADUs. I know the permitting and building process is way easier with ADUs, but I would assume that it's much more difficult with single familys.

I will be acting as my own general contractor (currently waiting to be issued my remodeling contractors license). I have experience building ADUs on my properties, but haven't tackled a new construction project for a single family with unimproved land.

I'd be using the BRRRR strategy, cash out, and do it over and over again.

I would love to connect with anyone doing this!

Hey y'all,

i recently passed the law and business exam for the b-2 license. I'm currently studying for the trade exam. 

I qualified through owner builder experience, military credit, and my college degree. I wanted to keep buying properties and build ADUs in my area, but I got priced out of the market and most of my cash is tied on my properties. so I decided that i wanted become licensed and do what I enjoy for clients. I love everything about construction, this has probably been the first career/business that I actually obssess about mastering it. 

I would love to connect with b-2 contractors and even general contractors, to hear about your experience!

I also plan on getting my gc license to build new construction.

Hey everyone,

So I have been looking for a lender that can open a HELOC on a my primary residence single family with both an ADU and a JADU. Unfortunately, all the lenders I have called so far do not lend on multi-unit properties. Has anyone else, in a similar situation, had any luck getting a HELOC or Equity loan on a property with an ADU and JADU?

Has anyone heard about getting a land trust to bypass the JADU owner occupancy requirement? I've been following 'howtoadu" and that was mentioned by a construction company that builds ADUs. 

Quote from @Jeff T.:

 Will do!

Quote from @Jeff T.:

One place I heard an interview with that does ADU loans is ADUloans.net
Its a mortgage broker in CA that specializes in ADU loans.
Might be worth checking out. At least they are familiar with ADUs.

 Thanks Jeff, I'll check them out!

Quote from @Chen Zhou:

Quote from @David Maldonado:

ADU Appraisal:

Hey everyone it has been a while. I'm currently getting ready for my 5th ADU build and I want to share some news:

A similar house in my neighborhood with both an ADU and a JADU sold for $1.15 million, after only being listed for a few days. Properties around my neighborhood are worth around $550,000. I was able to get a copy of the appraisal report and the comps that were used were mulit-familys (tri-plex). As of today, that house was the first and remains the only property with both an ADU and a JADU in my area.

Question:

If I were to apply for a HELOC, would that $1.15 million dollar property be the only objective comp that can be used to determine my property's value? I'd be able to quit my job and do this full-time if this can work!

 Would love to know how your appraisal went.

 Hey Chen,

Unfortunately, the lenders that I tried out, did not use that comp (along with 1 other additional comp), as well as not considering any value of the ADU and the JADU. It was an in-house appraisal for a 250K HELOC. The lender literally said the value was based off searching my property on Zillow (which does not have the ADU nor JADU).

I will be trying out another lender soon for another HELOC after my 1 year occupancy is up on my current househack, and I will be moving back to the property with both a ADU and JADU for a primary residence HELOC (way better LTVs).

Anyone else have better luck with their ADU appraisal?