All Forum Posts by: Felicia Nitu

Sounds great, Alan! SB-9 is definitely exciting. I'll be happy to refer your partner whenever there's a client ready to start a project.

Hello everyone!

If you're in real estate, whether as an agent or a developer, SB-9 in San Diego City is something you need to have on your radar and smart investors can make it work to their advantage. Urban Lot Splits (ULS) allow you to divide a lot into 2 parcels, and Multi-Dwelling Unit Developments (MDUD) are allowed up to 2 units per lot. With enough space, this could mean up to 4 units on a single property. A potential goldmine for those seeking to increase property value and generate rental income.

However, navigating this opportunity requires strategic planning. Investors need to factor in zoning regulations and parking requirements, which are essential for smooth permit approval. While permits for ULS may take up to 1.5 years, MDUD projects can proceed faster, provided all requirements are met.

Let's break down the numbers for San Ysidro, a promising area for development. Building a 4,000-square-foot, three-story duplex with a 1,000-square-foot ADU could cost about $1.83 million, including construction and permits (excluding land). With market values reaching approximately $3.95 million, that translates to a 115% ROI. Construction could take a year, with permits stretching up to 15 months, a timeline that’s still attractive given the return potential.

For developers seeking even bigger returns, a lot split project might be the way to go. Constructing two 4,000-square-foot duplexes on separate parcels in San Ysidro would cost roughly $2.96 million, with a market value of $6.31 million, offering a 113% ROI. Compare that to Tierrasanta, where market values hover around $3.01 million for a similar project, and it’s clear that location is key to making SB-9 projects profitable.

Agents, this is where you can shine. By highlighting properties in high-demand areas like San Ysidro that are ripe for SB-9 developments, you'll attract savvy buyers and investors who are eager for strong returns. Presenting these insights to clients sets you apart from the competition.

Thanks for reaching out, An Lan! 

Under SB-9, you can have at least 2 units per lot, with a minimum of 800 square feet each. There's no fixed max size beyond local zoning rules. If you're thinking of denser development, you can split the lot and go for up to 4 units across 2 parcels.

Hello investors and developers!

If you're considering property in San Francisco, SB-9 could significantly enhance your investment strategy. This law allows you to split single-family lots into two or add a duplex, maximizing development potential on land you already own. Imagine turning a property into two 800-square-foot units with minimal red tape. The approval process skips public hearings, though lot splits can take up to 1.5 years for final sign-off. Be mindful of setback rules and a 20-foot height cap to maintain neighbor-friendly designs. With the right approach, SB-9 offers a streamlined way to boost property value and rental income.

Now let's talk numbers because that's what matters. In Noe Valley, building a 4,000-square-foot, three-story duplex with a 1,000-square-foot ADU could cost around $2.17 million, including permits and construction. With market values hovering near $7.5 million, that’s a 245% ROI. Sure, construction will take about a year, and permits might stretch up to 15 months, but the return makes it well worth the wait.

Thinking bigger? Consider a lot split. Build two 4,000-square-foot duplexes on separate parcels. Costs rise to about $3.51 million, but market values in Noe Valley could reach $12 million, a 247% ROI. Even in Monterey Heights, where prices are a bit lower, the market value could hit $8.8 million, with a 151% ROI.

Real estate agents, this is your moment to stand out. Position yourself as the go-to expert by showcasing properties primed for SB-9 development. In high-demand areas like Noe Valley, the potential for strong returns speaks volumes to buyers and investors.

If you're curious about how SB-9 can work in other parts of California, definitely check out It's Time to Invest in California, now! The zoning changes will make California a hot real estate market. With zoning changes making California’s real estate market even more attractive, now’s a great time to dive in. I’ve done a lot of research on these projects, so feel free to ask any questions here. I’m happy to help and share what I’ve learned!

Hey BiggerPockets Community,

If you're a real estate investor or developer eyeing opportunities in Los Angeles, SB-9 (the California HOME Act) could be a game-changer for your strategy. It's creating new ways to unlock property potential and offers a pathway to profitable investments if you're targeting the right neighborhoods.

Here’s the deal: SB-9 allows to split a single-family lot into two parcels and build up to four units. Two on each lot. For investors, this can mean boosting rental income or increasing the property value significantly. Not interested in a lot split? No problem. You can still build two separate homes on the same lot, offering investment flexibility.

The streamlined approval process is a huge advantage, cutting out the red tape of lengthy public hearings. You'll need to meet requirements like parking and setbacks and might encounter additional hurdles in environmentally sensitive or historic areas. But for most properties, it’s a smooth way to add value and potentially start bringing in some rental income.

To give you an idea of what's possible, I ran an analysis on a project in Sycamore Square, Los Angeles. Imagine building a 4,000-square-foot, three-story duplex with a 1,000-square-foot ADU. The total cost including construction and permits (but excluding the land) comes to about $2.14 million. In this area, market values hit around $4.95 million, giving you a solid 131% ROI. Not bad, especially considering it’ll take about 9 months for permits and a year for construction.

Now, let’s say you decide to do a lot split with two 4,000-square-foot duplexes. This would run you about $3.48 million, but the market value jumps to $7.92 million, keeping the same 131% ROI. However, this only works in premium neighborhoods like Sycamore Square. In lower-value areas like Sylmar, market values max out around $3.28 million, which results in a loss.

The key takeaway? Investors need to target high-demand markets where property values can support development costs. For agents, this presents an opportunity to stand out by guiding buyers toward properties in these profitable neighborhoods, making you the go-to resource for savvy investors.

If you're curious about how SB-9 can work in other parts of California, definitely check out It's Time to Invest in California, now! The zoning changes will make California a hot real estate market. With zoning changes making California’s real estate market even more attractive, now’s a great time to dive in. I’ve done a lot of research on these projects, so feel free to ask any questions here. I’m happy to help and share what I’ve learned!

Sounds like a great event, Alex! Hope to attend to the next TET Conference

Cool! Looking forward to it!

Oh, I  feel so bummed for missing this meet-up. Are you guys planing to meet sometime soon?

@Brandon Turner Thanks Brandon for the welcome. You guys rock! I've listened to most of your podcasts and I'm amazed how you guys turned the good old boring real estate biz in a fun attractive professional environment. Kudos to you! If you're coming in the area please give me a shout. Maybe for the summit. I'd love to get together ...

@J. Martin It was great chatting with you, today. Thanks so much for all the pointers. I've already followed up with one of your suggestions and I set up a meeting with a broker who was actually born and raised in the area I'm interested. We'll see what it comes out of it. Have a safe trip. Keep in touch...