All Forum Posts by: David W.

Some people say do not try to be the general contractor as it will take way more time, costly mistakes and will be nearly impossible to manage with current work. best to hire a company that will do it all and cost about $250 per square foot. I have 1000 sqft so $250k.

if I have no GC and manage all the subcontractors I will not have a Rolodex so have to find subcontractors and I’m sure there are a million other complexities. Not sure how much money % I can save if I do it myself too?

if anyone has ever done this themselves I would love to hear your thoughts. Especially if you are in LA! Thank you

The good GCs charge 20% but this does not equate to your savings because the GC will have better contacts, have namer experience coordinating contractors, be more familiar with permit process and expectations of the inspectors. My belief is that you will be challenged to realize a 10% savings loan n your first effort and there is some chance it will cost more than if you used a GC.

I would recommend against being the GC unless you are confident of doing more than one effort. We act as GC on our efforts but we have gotten tired of the effort involved. So. I am training our son to basically do the rehabs but there is a learning curve. He is leading his 2nd rehab and it is taking longer than I would take (but I have done it many times). In addition I am giving him freedom to explore (to a certain extent) on my dime. This is for a LTR in a nice area (A-/B+ area (pt Loma), but B unit due to MF). For example he is trying to place a bookcase door to access a small amount of storage from the bathroom. No way we can get additional rent to justify this effort. He is also planning on a tile accent wall. Again I cannot collect rent to justify this cost/effort. He is putting in a spa (I think because it is 4 units this expense can be justified). We wants to rip out a perfect pre-fab shower enclosure to put in a custom tile enclosure. I think I will not let him make this upgrade as a 5 year payoff would require over $100/month additional rent.

My point is certain things are learned with experience and 1) acting as GC once does not provide an opportunity to leverage the experience 2) mistakes can be costly.

good luck

Hi Dan,

thank you. I think I will be hiring a GC. Do you know how I should go about to find a trustworthy and fair GC for ADU build in North Hollywood?

How much a sqft foot is a good cost for ADU in LA?

0 Votes

Los Angeles County, California

Quote from @Benjamin Aaker:

How handy are you? The GC does a lot of the odds and ends work of tying the place together. Managing subs is also a lot of work. Since you don't have the contacts, you will likely wait longer to get them in. You'll need to do a lot of learning on the order of operations. Also, make sure you know what the local laws are. You may need a license to GC even on your own property in your area.
GC in my area cost 10% of the total and I would say that is worth it for what they provide, but if you have the knowledge and willingness to be on the phone with subs (and spend a lot of time on site) you could save that by DIYing it.

Thank you it seems that most people I have talked to now are saying not to. I will now focus my efforts on finding a good GC. I have seen companies like “Sturdy Build” whom I consider to be an A to Z service that is premium. They charge $250+ sqft. Do you know what a competitive cost would be and how I can go about finding a good and fair GC for ADU build?

0 Votes

Los Angeles County, California

I just hired an architect to design and plans submit for ADU in my 8 multi unit to use the tuck under parking.

1 Vote

Los Angeles County, California

Thank you Rick for your reply. Will call HACLA to verify all details

0 Votes

Los Angeles County, California

@Rick Albert thank you kindly for your response. I am entering escrow tomorrow and although I have reviewed all the various data from this property I am still "inexperienced" and we all know that although a buyer's agent has a fiduciary they are still going to have a monetary agenda so if something might be on the fence they will shine a positive light on it. That is just reality so I was hoping to find an outside thought on the deal. I know that is a lot to ask for but I don't have anyone else that is a real estate pro or has any experience with multi unit analysis.

1. Property condition. Built in 1963 and requires soft retrofit aprox $100k (getting estimates this Friday). I have to find out with inspector(s) anything else but I was told there is no deferred maintenance and 6 of the 8 units have been remodeled. No roof issues etc.

2. What was attractive about this property was that 6 of the 8 units are section 8 and all are 100% current. The property is owned by a company that does exclusively section 8 and I have been told their vetting is very thorough. With the socialist prop 33 that might be approved in November then section 8 is all the more attractive.

3. 6.6% today but we all hope that the crystal ball will lower. I have no prepayment penalties at that rate and at that rate I will be positive cash flowing (not much but enough after expenses, vacancy rate, etc)

4. I would guess that a 3% max annual raise is more realistic because the socialists are tightening their grip on California and pushing for harsh laws to take control of properties etc.

0 Votes

Los Angeles County, California

Does anyone know where I can get some advice? Is there perhaps another forum that might be more active?

0 Votes

Los Angeles County, California

I see a tumble weed and a turtle off in the distance crossing the sun scorched sand lonely road in the desert.

0 Votes

Los Angeles County, California

Hello!

I am going into escrow with a multi unit, two 2 bed + 1 bath, six 1 bed + 1 bath. located in . It has a rent roll of $16,000 per month. Price is $2,030,000. I am putting 33% down, 6.6% mortgage. Renters are all up to date and no missed or late rents. This offer would not seem attractive to middle America because it is not cash flowing as much but I would say this property will conservatively appreciate 5%+ per year. I own 2 sfr in LA and this will be my first step into multi. What do you guys think?

1 Vote

Los Angeles County, California

Quote from @Bradley Buxton:

@David W.

I agree it's not the best idea to tie up all your capital in one property unless it's a house hack or you a have a good exit plan. Deals need to be more creative and are harder to find. The gold rush days are over and now it takes more tools to find deals. Networking can be one of those tools and a good agent that has an investment mindset and values your time and understands your goals. Strategies might also include, get the seller to buy down your rate, find a less expensive property, analyze more properties, look out of the LA area, or even out of state. Nevada has low taxes and landlord friendly with strong appreciation and close to CA. Happy to share references.

Thx Bradley, Nevada, Arizona, Texas are the three I'm looking at. I have a friend who has a ton of property in Bakersfield, Ca so I'm still keeping my eyes on local. Still trying to calibrate my sights on not just the country but get it down to 1-2 cities max! Where in Nevada do you feel has the most growth, economic stability, new tech etc?

0 Votes

Los Angeles County, California

Quote from @Tim Ryan:

Hey David, I learned years ago not to invest in buy and hold properties in SoCal, in spite of the great appreciation. I have been buying out of state and getting both cash flow and appreciation, for years. The key is to find a future growth market, get in early, and ride the wave. I can give you a book recommendation that explains this well. DM me. Perhaps we could meet up for a coffee since we are both in LA. We can see if there are synergies within our business.

Hi Tim, thx for the book recommendation. I have been very hesitant to pull the trigger anywhere outside of LA. Tbh everyone wants to close a sale and will never say anything negative. I know the truth in LA. There are conflicts of interest with the buying agent wanting to close, the selling agent wanting to close, the property manager wanting new business etc. I'm sure once one gets into a new geographical area and builds the team then it can work but that in itself takes a ton of commitment. Otherwise buying in Socal I'm a drive away I can be hands on. I have saved a LOT of money doing jobs. Just finished doing my own front yard revamp at a rental that was quoted for $8k and I did it for $1k. Not that that is my goal as I'd rather find a trusted team (very hard).

So where are you investing in out of state now?

0 Votes

Los Angeles County, California

All Forum Posts by: David W.

David W. has started 29 posts and replied 133 times.

Post: Should I Build My Own ADU - Multi Unit?

Post: Should I Build My Own ADU - Multi Unit?

Post: Should I Build My Own ADU - Multi Unit?

Post: Help With Analysis

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Post: Help With Analysis

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Post: L.A. Resident Commercial Investing Advice Needed

Post: L.A. Resident Commercial Investing Advice Needed