All Forum Posts by: David Maldonado

 Thank you for the information Andrew, I was not aware of any of that. This would be my first time going the heloc/cash route. Are these rules the same for private lenders?

Hey Y'all,

Just wanted to update everyone on a property with an ADU and a JADU down the street from my house that sold for $1,150,000. That's insane! Homes in this neighborhood are selling in the low 500's. That house is very similar to mine (also have an ADU and JADU), but mine has a little more square footage overall. I talked with the lender that the agent, that's representing the owners, recommended regarding the appraisal. Apparently CA SB 9 changed the game. He said that since the bill got rid of r-1 zoning in California, appraisers are now allowed to use multifamilys as comps for a single family home with ADUs. I'm waiting on the property to close so I can get a HELOC to start investing full time. I was here thinking that there was no way someone would pay that much for a property in a neighborhood with an average home value in the low 500s, but they got an offer accepted within a few days the property hit the market.

Hey y'all,

I'm planning on getting a heloc off my primary residence to brrrr houses.  Do helocs require a seasoning period before being able to get a mortgage to pay off the line of credit?

Hey everyone,

So Sb 9 allows homeowners to split their lots and build duplexes on each lot (total of 4 units) and it is up to the city if they want to allow ADUs as well. I'm still waiting on my city to implement a plan on how homeowners can do this. I have had success with ADUs, but I think this method will not only produce more cash flow than ADUs, but may also have a much better return when it comes to equity. It is still unclear how the properties will be zoned by the city if someone adds a duplex to their r-1 zoned home (will it stay as an r-1 or turn into an r-2?). I'm curious to see how lenders will treat these properties when it comes to lending and if appraisers will treat them as legit duplexes. I spoke with my lender and he said that as long as they are considered legit duplexes on r-2 lots, they will be treated as such. 

ADUs are great for cash flow, but not so much for equity so your money will most likely stay in the deal. The issue is that it is a hit or miss when it comes to the value it adds to the property overall (some add a lot of value, and most do not). I think utilizing SB9 can provide much more cashflow (from the additional units) and especially more equity. 

I would like to purchase an owner occupied property with at least a .5 acre lot, split the lot, build 2 duplexes, cash out refinance on both duplexes, build 2 more ADUS, then keep purchasing single families and continue building ADUs while I wait for the 3 year owner occupancy to expire and then repeat.

I know SB9 isn't favored by some people because of the fear that investors will turn single family home neighborhoods into multi families. I don't think that will happen due to the 3 year occupancy, but even so, there is nothing we can do about it so might as well capitalize on it instead of complaining. I personally think SB9 can give  the average homeowner the opportunity to build wealth and generate cash flow because the average homeowner in California cannot compete in this hot market.

Anyone here thinking about going the SB9 route? I'm curious to hear what y'all think.

Thank you and That would be awesome! I'll definitely reach out to you before I fly over to set something up.

Hi everyone,

I have been successful with my first two house hacks and have built 3 ADUs in California. I am looking to take the leap and invest in the Las Vegas area due to the insane home prices in California. Competition is crazy out here! Buyers are paying over 50k for properties in my area and the numbers don't work for me when considering as an investment property (20% down). In the long-term, I would still like to purchase properties in my hometown in California and build ADU's. ADUs are cash flowing machines, but there are not many financing options for them. Right now I am interested in fix and flips for Las Vegas and slowly build capital to finance ADUs. I am also interested in rentals in Las Vegas, but I am not informed on the market. Are there any local meetups in Las Vegas from Feb 18-21? I will be in Las Vegas visiting a friend and I would like network with others.

I agree. I spoke to a few appraisers in my area and some just count the JADU/ADU as square footage to the main house (if its attached). As for detached, they go off of comps, but if none are found, they add the extra square footage towards the main house as well.

Hey everyone,

Has anyone gotten an appraisal on a SFH with an ADU in California? I am just curious to see how much equity it has added.