All Forum Posts by: Jin Tan

@Ronnie S. @Marinelle Tan

I wonder what would happen if you let the permit lapse. Typically the construction permit expires if there is no inspection for six months (you may want to confirm this with your building department).

If you let the ADU become unpermitted and turn around and pull a new permit to legalize it and wrap up the construction, technically it's now a new permit which falls in the 2020-2025 period. It's a loophole, but may be worth a try.

Living paycheck to paycheck and doesn't have enough reserves to cover the move-in funds. Huge red flag. At least he's honest about the reason and not stringing you along with some other BS excuse.

Move on to other applicants. Just be glad that this problem showed itself before you went into a contractual relationship.

Watch out for jurisdictions that sneak in language for an owner-occupancy covenant even for ADUs (not just JADUs). Here is language from the City of West Covina:

@Matthew Forrest Do you mind sharing some details about your ADU? City/jurisdiction? Attached or detached? Square footage? Hope you can get the valuation that you were expecting. Please chime in once you find out.

@Barbie Steele That's great to hear! I was bummed thinking that most of the equity is locked in for at least a few years until these ADU properties start getting sold. It's good to know that there are options.

Hi All,

I am wondering if there is anyone in the LA County area who have completed an ADU project and going thru (or have gone thru) a refi or HELOC process. We just built a 1200 detached ADU and are applying for a HELOC. The appraisal came back far lower than what we expected. The comps used are single family dwellings, and our ADU is being considered as a "guest house" and an amenity to the main dwelling. As such, the appraiser is giving it $60/SF. To me this makes no sense. Just the cost of construction is already $150+/SF.

Has anyone had this similar problem? And were you able to substantiate a higher valuation?

Hi everyone! My first post on the forums! Shout out to @Tom Mole for introducing me to this awesome community!

A little about myself. I have a stable job as a civil engineer with decent income. Besides my W2 job, I do design on the side for new homes, additions, and remodels, so I'm familiar with that aspect of the industry. Since discovering BiggerPockets, I have been binging on Josh's and Brandon's podcasts and getting really serious about planning my financial future.

My goal for this first post, besides introducing myself, is to ask for feedback and comments on my plan for taking the next few steps. I also hope to connect with other investors and professionals around my area to bounce ideas off one another. Although, admittedly, I'm just starting out so I don't have much experience to share. So it may be a one-way street, but I am very appreciative of any advise and guidance and will gladly show my appreciation in the form of coffee or lunch.

Recently, I purchased a property as my first rental, taking the first step in a long, and hopefully prosperous, journey. Everything around my area is expensive. My first rental is not even close to meeting the 1% rule. Everyone has to start somewhere, and I decided to start in my own (expensive) backyard, instead of jumping out of state with all guns blazing. Although I am actively researching other markets for my eventual move out of state.

For the second property, I plan to buy a duplex or triplex, live in one and rent out the other(s). Like the first, I will likely not be getting positive cash flow, but at least my mortgage payments will be subsidized. Also around this time, I plan to begin construction of a second unit on my first property. California has a new law, effective 2017, that allows ADU's to be built on all single family lots. I was careful in my search for the first property to make sure the lot has enough space in the back for this second unit. I will be able to shave off some expenses from the project by doing the design myself.

After that, my DTI won't allow me to get a third property until I can show my landlord experience and rental income history. I am contemplating a few options for my third property. 1. Continue house hacking but suffer the high price-to-rent ratios in my area. 2. Buy further inland. There are cities in the Inland Empire that provide better ROI, and still close enough for me to self-manage. 3. Buy out-of-state. This is what I eventually want to do, whether for my third property or later. I would appreciate any suggestions you guys can offer to point me in the right direction and to the right markets. David Greene's book has done a lot to put me into that long-distance mindset. This won't happen for another two or three years. I intend to do as much research as I can about other markets between now and then, and connect with local talents from those markets.

Thank you for reading this long post. Please chime in and drop a line. I'd love to hear from you.

Jin