All Forum Posts by: Jeremiah Lee

Newbie here, please go easy on me!

Let’s say I have $200,000 that I’d like to use to invest in real estate and I’m interested in a buy and hold strategy. I’m 33 years old, have a full time career outside of real estate and am trying to decide between option 1 or option 2?

Option 1:

Build Secondary Unit at my Primary Residence in California

-800 Sq Foot –Stick Built or Modular

-All in cost approx. $170,000-$190,000

-est. rent per month $1,500 as of today

-self managed

Option 2:

Put that same money into multiple SFR properties out of state-ave purchase price around $150,000

-likely through a turnkey property company like Norada or similar

-managed through property mgmt.

-assuming a newbie(key word) who completes necessary due diligence

Of course there are many variables and unknowns, but which option would come out on top in the next 20-30 years? Thank you for reading!

Hey Ben,

Greatly appreciate the info and response,  It's also nice to hear from a Central Coast local. Yes, I've checked in with SLO County to find out all their guidelines and approximate costs for permits.  From what i've learned so far, it should be very do-able.  I have also spoken with a couple contractors to get some cost estimates and building ideas.  Realistically, I think it would be very smart of me to save up quite a bit more money before jumping into this project.   However, I'd like to figure this thing out now so I can better determine what the next best investment opportunity will be for me.  Over the last five years, i've really focused on paying off student loans, my truck and figuring out how to live off less.  I would be interested in talking to your lender if possible. Thanks!

I'd like to build a Secondary Dwelling/Granny unit at my current property on the Central Coast of CA.  Thinking long term, what’s the smartest way to finance this project? I would assume I need to save up more money, but how much would you want to see in your account before building this secondary unit and what type of financing would you utilize? 

Location: San Luis Obispo, CA County 

Project

-Cost of construction approx. $200,000

-800 Sq Foot 2 bed/1 bath

-Estimated Rent $1,500-$1,700/month

Personal Assets

-SFH -Primary Residence on One Acre

-Last appraised $550,000

-Amount owed $390,000

-No other significant debt

-Credit score 770-780

-401k-$48,000

-Investment account-$31,000

-Income $100,000/yr