All Forum Posts by: Gary F.

San Jose Investors.  What do you folks think? I hear some say SJ is still growing with potential new IT space attractive to some companies.  Like the new Google facility at Diridon.  I see others say SJ may be headed towards a decline.  

What are your predictions and why?

Hello LA BP.  I'm looking to get into my first MF, possibly in  Torrance or Gardena.  Im hoping for cash flow and non-rent controlled areas.  From my research thus far, Torrance and Gardena are not rent-controlled.  From what I've seen so far, cash flow isn't great in the more desireable areas of West Torrance at least.  

I used to live in Gardena in the early 90s and was expecting some new developments. But when I drove around, much of the area seems to have become more lower income.  Maybe i didn't look in the right places.  I do like the potential to build MFs of some of the deep flag lots.  I saw quite a few near Peary Jr High.

What areas of Torrance and Gardena have more potential?

Hello all.  I too am looking into OC for my possible future investment/house hack.  Unlike the OP though I'm hoping to find a nice duplex, triplex, or 4-plex.  I'd like the best of both worlds with positive cash flow and appreciation, but if I have to choose I'll need the cash flow.  However, as Mike McKinzie said, cash flow is not great.  His figures are spot on at $1M = $3-$4k/month or even lower. I looked at a few properties in Anaheim Hills, Huntington Beach, and Irvine and was shocked at the low rents to cost ratio. 

The other factor is that many of the newer areas have that expensive additional property tax of Mello Roos. I couldn't believe that in Irvine where there is much new development buzz, an $800k townhouse will pay upwards of 1.8% in addition to the regular CA tax. That's about $24k in PT alone, not to mention the HOA fees. YIKES! But still most of the properties I saw in one development were sold out.

Are there really no areas for decent cash flow?

@jon 

@Jon Holdmanundefined

Very good points. Even if on paper and zoning ADU is possible it's the infrastructure that can ruin the completion. I've heard of folks who purchased a property with ADU plans only to find the sewer is too small

Well, according to a contractor I spoke with San Jose does require at least one unit be owner-occupied. I cannot rent both units at the same time.

However the requirement sheet from the city does not state this. But I did read this on another document. I guess I'll need to call the city myself for clarification 

Deleted. Wrong thread

Some great information 

https://www.moneycrashers.com/building-prefab-home...

Also prefab is not to be confused with manufactured homes. 

@Anna Vickroy

Prefabs came 3 ways that I know of

1) Whole house prebuilt. Transported as a whole unit and using a crane to lift onto the foundation. These can be all prefinished and near move in ready with paint and appliances already completed. 

2) Modular. The house is built of "boxes". A kitchen section, living room section, bedroom section and so forth. Each module is crane lifted into place. Each module can also be preassembled with appliances and finishes.  

3) Panels. The panels are basically wall sections. These are carried onto the foundation and bolted/secured piece by piece. This is a good option if site access is an issue. 

With the first and second option you need access for the large trucks to get near the foundation and clearance for a crane. I've heard they can lift the house over an existing two-story home in some situations that allow for it.  

The beauty with prefab too is that the ADU can be constructed while the foundation and other steps can be completed simultaneously thereby speeding up the process significantly. Obviously time saves $$$.

In my situation I'll probably have to go panel construction. I've got a big city planted tree in the way (you know how the city is very strict about the trees. Can't remove unless it's diseased and even then it requires a permit and public notice to remove)

@Ethan Cooke

Thanks for that information. The more resources the better especially from personal experience 

https://www.airbnb.com/help/article/805/what-are-some-things-i-should-consider-before-hosting-long-term-guests Airbnb regarding long term rental. Something to think about I guess the purpose of the governor's encouragement of ADUs was to aide the housing shortage. Still it's makes financial sense long or short term rental income. For those of you who've built ADUs, What were your total build costs? For panel construction from one company I was quoted $350/sf including foundation and utility hookups but not including permits. For a 400sf unit that's about $175k. Add another $7k for permits and more for utility fees. At 1.5% ROI I'd have to get $3000/month. Not likely I'd get that high a rent for a one bedroom unit. I'll have to keep looking. If anyone has construction companies and had good experience please share.