All Forum Posts by: Account Closed

 I feel like my initial question sounded short but it certainly wasn't meant to be haha. I was just generally curious! I live in California too so I know how bad the housing crisis is. They're pretty strict about those kinds of things are up here, so I was just wondering!

@Account Closed looks like an awesome plan. Does it work? Is it zoned correctly and have the right setbacks? What about financing this is a large project can you get it paid for and cover the carrying cost before cash inflows start, or should you break it into sections and slowly do it. 

If you are just doing rent by the room almost with divisions it who knows how zoning will be, but don't forget about the exit you might have to pull the house back apart to get the most out of it on the exit.

Keep up the creativity! 

Quote from @Account Closed:

How much is too much? Haha California real estate is insanely $$ and so I want to make this happen (resi turned into 4-5 unit complex) to aim to not only cover the mortgage, but cash flow and/or pay the property off early. Was initially just going to do an ADU (yellow) in my backyard and garage conversion but have decided to also most Iikely cordone off the master BR + BA as one unit, and he bonus room (will add a bathroom and hot plate). I will be living in the main part of the house. I know it seems like a lot but for those who have rented most or their lives in giant complexes, I know this is a good deal for them re not only minimal shared walls but also having a yard (most units will have a small yard). Ton of street parking also but I'll likely add 2 on site spots for a total of 3 on site parking spaces (after garage is converted to a livable unit). Open to thoughts and suggestions 🤗

 Is this zoned MF?   Are you planning on doing this using SB9?   Deed restricting to affordable units?  Not legal units?

I suspect you will be negatively surprised by the development costs and the associated added value.  It could easily cost more than the value added.  In this case the negative position will consume the initial cash flow.  eventually, the negative position will be recovered and it will produce good cash flow.  

I also suspect you will be surprised by effort involved and time it will take (with expenses but not producing income).

It will also detract from the current home. 

If you proceed, you likely need a substantial hold time to have return be worth the effort.  

I believe there are better local RE investment options.

Good luck

How are the zoning and laws there regarding so many units on one parcel?

@Account Closed I applaud and love the ambition. My first question, I'm sure you thought of, is: does the zoning work? If the zoning allows for an ADU than surely you could also convert the garage into a living space partitioned by a large, heavy door that locks on both sides to "separate" units.

I do know a lender with an interesting loan option. A combination of a purchase and construction loan in one. They will loan to you the total appraised future value of a project like this. For example, if the House cost 100k to buy and the ADU cost 50k to build (obviously ridiculously low numbers) AND if the the future value from an appraiser appraised for 150k, you could get a loan for 150k to buy the home and build the ADU. You do have to start paying the mortgage immediately on the entire 150k.

I think a bigger concern is where are all these ppl going to park their cars?  Maybe I’m missing something?

I am looking to convert a single family home (SFH) into either a duplex or an ADU. This is my first house, first duplex, first purchase using the VA loan. I need help identifying the pros and cons of each strategy, ADU or duplex route. The home doesn't need significant renovations in order to make two seperate, but attached units. All I need to do is put a wall where a door is and install a kitchenette. This will create a 3/2 attached to a 1/1 with a sunroom (where I will install the kitchenette). I plan to keep the house for a long period of time and rent out both units in the home once I have met my 1 year minimum occupancy time required by the VA loan. Below I will list out all the considerations for this situation...

1. Zoning: the home is in Vista, CA in an office professional (OP) zoning district. Right off the bat, I am not sure if this zone allows for multi family homes. I've tried calling the Vista Building Division, but haven't learned much. If it is not allowed, how painful is the process of getting it re-zoned to allow for multi family? 

2. Code requirements for a duplex: I know I need a fire barrier on all the walls that are shared by the two units. I need noise insulation. I need parking for both units and seperate entrances to the homes. What else am I missing? What I don't know about is getting separate water heaters,  electric meters and mailing addresses. 

3. Resale: is there a significant difference in resale values for a duplex compared to a home with an ADU?

4. Rent: I wouldn't think a renter would care if he/ she was renting an ADU compared to a unit in a duplex. Is there a difference in what I can charge for rent for a duplex vs. an ADU?

5. Cost: After speaking with the City Building Department, I learned that there is a minimum deposit for reviews and inspections of $5,000 when I submit my initial development plan to the city, which has a 4-9 month turnaround time. Permitting an ADU takes no more than 60 days, thanks to the new legislation passed in Jan 2020. Is the time, red tape, and extra cost worth converting to a duplex instead of getting a permitted ADU?

6. Permitting: if I go the ADU route, do I really need all associated permits? Eventually, I am going to be renting both units in the house, so I am assuming I want to play it safe and get the potential ADU permitted the right way. But, I have been to many open houses with unpermitted additions in California, so I am not sure.