All Forum Posts by: David Frandsen

@Nabil Suleiman nailed it on the head. They will most likely see those additional units and not allow an ADU. I would preface by saying...make sure you lookup the zoning on the counties GIS Zoning Map and do not rely on a Title Report or other source as they are often wrong.

I have a lot of experience with ADU's in California. Not sure what the rules are there but can tell you what is working here. Finding a lot with an alley can be good for the access. We like lots that are zoned multifamily because here you can build two detached ADU's. Two story is an option but the construction costs go up (price per square foot). Have contractors give you an average price per square foot to build and then add in the soft costs (permitting, design fees, water/sewer fees, structural engineering if needed). If the rents can justify the financing needed to build the ADU then go for it.

@Christian Johnston did you ever get your permitting questions answered? 

If the zoning is right and the numbers crunch out, why not? But as @Cesar Ruiz mentioned you could look into the ADU route. If it is a multifamily zoned lot you can build two detached ADU's.

I second what has already been said and think you will have no problem renting out an ADU for top dollar in San Diego PLUS you have the potential appreciation that San Diego has to offer.

@Pablo Hernandez In California the ADU's are allowed to encroach on the setback requirements (as close as 4'). I would not trust the planner as we have planners get the rules wrong ALL the time. You need to understand your states ADU regs. The only setbacks in CA that are gospel are the Front setbacks to the street. All the other setbacks can be 4' or less for ADU's.

You need to understand the Florida ADU regulations. (And local City regulations). I don't know how it works there but in California you can put ADU's on Single and Multifamily zoned lots. In fact Multifamily zoned lots allow two detached ADU's.

We have a lender based out of San Diego that does ADU's. DM me if you are still needing someone.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Redding.

Purchase price: $174,000
Cash invested: $60,000
Sale price: $310,000

This was a Value-Add investment opportunity. It was purchase in 2014 as a short sale (it took us 6 months to get bank approval). It was an old 1940s structure that had been remodeled in the 1960's and all the finishes were pretty much frozen in time. We remodeled the units one at a time over about a year period (as a unit would go empty we would remodel). It was all sweat equity at the time or the rehab likely would have been much more. $60k remodel. Cash flowed $1000/mo after expenses.

What made you interested in investing in this type of deal?

This was a classic case of stumbling into real estate investing. My wife and I were young without kids and wanted to plant our savings into a home but instead found a 4-plex fixer.

How did you find this deal and how did you negotiate it?

It was on the MLS. It took us 6 months to get bank approval to purchase this as a short sale.

How did you finance this deal?

30yr conventional. 20% down. Had to borrow 10k from parents to make it happen.

How did you add value to the deal?

We remodeled each unit as they became vacant then raised the rents once fixed. (paint, floors, countertops)

What was the outcome?

Higher rents. Better tenants after we stabilized the building (it took at least a year to get a good tenant base)

Lessons learned? Challenges?

Old buildings can be challenging. It made it hard to buy, hard to remodel and even harder to exit. There is always something for an inspector to find on an old building. This made a lot of buyers walk and we lost momentum after listing the property. (We actually dropped out of escrow 4 times). Lots learned on the exit.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Chris Headrich in Redding, CA is excellent.

@Cory H. Thanks for the detailed info! All very good. As a park owner what are your thoughts: what prevents me from paying $$ for this mobile home only to have the park owner tell me I can't rent that space? Do I need to have the park owner write up the agreement ahead of time and put that along with title and my payment in an escrow account? Do I get a title company involved?