All Forum Posts by: Nate Wiger

@Whitney Hill or @Matt Devincenzo do you know if the affordable and bonus ADU's have to fit under the FAR in a non-transit zone? I'm receiving conflicting info - SD City has a bulletin that says they do, but then I emailed the city and the person said they don't... wondering if the city person was incorrect or if the bulletin is out of date.

ADU Bulletin - July 2021

ADU Quick Facts - April 2022

@Whitney Hill thanks for the wealth of information! And a big thanks for all the info you post on SnapADU’s website - it’s a phenomenal resource.

One thing I'm unclear on is what parts of town the affordable ADU program is available in. Is this only in City of San Diego proper? Or are similar programs available in Oceanside, Carlsbad, etc?

I've been looking into the low income bonus ADU program and it seems if you buy a reasonably priced SFR with a good sized yard, you can construct at least 2 but up to an almost unlimited number of ADUs in a transit priority zone if you designate 50% of them as low income. Essentially build row homes in an SFR zone. Summary from the SD Housing Commission

Is anyone experimenting with this? 

Thanks both. @Dan H. I think you're referring to the improved 2023 rules that building an ADU can't trigger the remedy of unrelated issues. I don't think this would help me with the mailing address but would ensure I don't need to bring the guest house up to current code.

This was through a contractor connection. Owner was mildly interested in selling and the contractor convinced them to entertain an offer. I've also handwritten letters to land owners I find via vacant parcel searches. Very time consuming, but lots of land is owned by retirees who bought it 30 years ago and have no idea how much it's worth in today's market.  They aren't really motivated to sell because it takes a lot of work and emotional energy. Presenting an all cash offer, quick close can be compelling to some of them. But it's a low hit rate TBH.

Hi all, I'm considering buying a SFR with a guest house out back that is currently used by the owner's son. Owner and son moving out after sale. It's not an official ADU/JADU so due to San Diego rules, it doesn't qualify for its own address. I don't want to convert it to an ADU because I actually want to add an ADU + JADU for a total of 4 units, then rent all 4 out.

I've seen units around town that seem to be flying under the radar with addresses like "1/2" or "#A" which are not technically valid in this area of San Diego. It seems like the mail deliveryman learns that "#A" is the back unit and starts dropping off mail there.

Has anyone else run into this? I don't see a path to an official address (guest quarters are not eligible for separate addresses in SD) so looking for creative solutions. Thanks.

Bummer on the appraisal. Curious if you tried to challenge it at all?

Sounds like a great deal, nice work. How did you secure 3.25%? And how easy was it to get the tenants out in Long Beach?

If the tenant doesn’t move out, does the home still make sense for you? Sounds like it wouldn’t meet your needs of a second unit for your family member, since it would be occupied. You have a contract in writing. I wouldn’t budge. There are other duplexes out there. Contractors have to reschedule all the time.

Investment Info:

Vacant coastal CA land purchased off market, improved, sold. We took a piece of raw land and made it "turnkey ready" for a buyer wanting to build their own home. This one took us a long time - 3 years - but we were not in a hurry for cash flow.

Purchase price (off market): $595k

Improvements cost: $76k

Seller note interest paid: $53k

Property taxes paid: $11k

Total cost basis: $735k

Selling price (in escrow): $1.2M

Gross profit: $465k (63% of $735k)

What made you interested in investing in this type of deal?

I have a W-2 job and dabble in land deals because I enjoy developing things from nothing. This was a below market land deal that we were able to put some legwork in to add value. It took us 3 years but that's not unusual in coastal CA.

How did you finance this deal?

Cash

How did you add value to the deal?

For this lot, we did all the environmental studies, grading plans, fire approvals, and landscaping plans, along with a preliminary architectural design since it helps with the sale if the buyer can "see" themselves living in the property. A blank piece of land with no house design is generally too much to grok for people. We didn't actually do any grading or road work.

What would you do differently?

We sold it due to the shifting market but in different conditions, we would probably have taken the time to grade the lot, improve the road, and get all the utilities setup. Probably an additional $200k in costs for $500-700k more in profit. I also chose an overpriced and overworked civil engineer who probably added 1 year to the project... will not use him again.