All Forum Posts by: Lee Gardner

Hi all, sorry for the delay in responding. ADU is still in the works, although in the current economic climate we've put things on hold. We recently refinanced our home without doing a cash-out, primarily because we're seeing a lot of vacant rentals in our neighborhood, and construction costs are still very high. We're thinking of revisiting the ADU idea in the spring, with a cash-out refinance - not a HELOC - because of the refi fixed interest rate. If any other real estate investors have any words of wisdom, please jump in and share with us! Thanks

Thanks @Chris Coleman!  

Hi all,

We're homeowners with no other investment properties, and we're planning on converting our detached garage to an ADU. My brother-in-law (who has a few rental properties) suggested we do a cash out refinance on our primary residence - which currently has enough equity in it to finance the entire ADU construction in Culver City/Los Angeles.

But after doing a bit of research, it sounds like going with a HELOC might be the better way to go, mainly because we don't start incurring interest until we actually use the financing.

My concern with a HELOC would be higher interest rates and possibly not being able to secure enough financing through a HELOC to pay for the whole construction.

After the ADU is complete and a renter is in place, we plan to refinance again. With the additional sq footage we would hopefully be able to buy another rental property elsewhere.

Any BP members with experience with this sort of endeavor, or words of wisdom with lending would be greatly appreciated.  Thanks!

@Jason Carter Wow a meetup in my very own town of Culver City!  I'm a total newbie, so I don't know how much I can bring to the conversation but I'm happy to meet some new people and hear some real estate investing discussion.  Thanks!

@Oleg Enik @Dmitriy Fomichenko - Thanks for all the help guys!  I feel really welcome here and glad to be on this journey.

@Oleg Enik Thanks for the tips! My property with the ADU is in Culver City. The ADU regulations are getting more open now, so that they can be built with more square footage than before, which will be great in terms of a bigger rental, but also in terms of adding square footage to the overall property value.

As far as future rentals: I haven't narrowed it down a ton but as @Zeke Liston kindly gave me a heads up on in this thread, Columbus OH is an up-and-coming market that looks to be in the price range I'd be looking for. I also heard a guest on the BP podcast mention Wisconsin as being a market with lower prices. I'd love to invest around LA, or even try the Puget Sound region in WA - where I grew up - but both areas are expensive and not something I'd be able to BRRRR to start my real estate investing. Any ideas would be greatly appreciated.

Hey Aaron!  I appreciate the warm welcome on BP.  I'm hoping to head up there sometime in the next month or so to visit family, and if I do, I'll definitely get in touch.  Thanks!

Hi John, 

I realize your original post is a couple years old, but I'm in a similar situation with my house.  Did you end up doing the cash out refi?  And if so, do you mind sharing how it went?  

Thanks!

Lee

Hi! I'm a homeowner living in Los Angeles/Culver City. My brother-in-law is doing well with his rental properties and he's really inspired me to get going with my own real estate endeavors. My wife and I are in the process of converting our garage into an ADU, which will be our first real rental/landlord experience. My main interest is buy-and-hold rentals in markets outside of LA (it's way too expensive in LA and I need to get started in a place that's not so pricey), and possibly house-flipping.

I'm originally from the state of Washington, I grew up in the Puget Sound region in Tacoma and went to school at the University of Washington in Seattle. I'm a video editor by day - working primarily in advertising & marketing, with some dabbling in TV promos and movie trailers. I read Brandon's book on rental property investing and that really got me thinking about how this can be a legitimate avenue for me and my family. Once I read that, I found the podcast, and I'm lucky to have stumbled onto the Bigger Pockets community. As one of the podcast guests said to do - I'm making it my obsession. I'm now reading David's BRRRR book, listening to the podcasts all the time, and getting started here online. Looking forward to being part of the community and getting this journey started!