All Forum Posts by: Osazee Edebiri

Quote from @Teddy Smith:

Hi All

I have a large garage in my single family in Oakland, CA (approximately 400 sf) that I want to convert into an ADU, preferably a 1 br. Want it permitted and separately addressed and separately metered, ideally.

I'm hoping to get some guidance here. It looks like I'll be able to borrow $100k to build it, and I've gotten quotes from 3 contractors and one came in at $80k, one at $130k and one at $200k.

I'd love to go with the one at $80k, but the range of pricing has me worried because if the $80k guy doesn't come in at $100k or less, I don't have any extra money.

Does anyone have any advice on how much this should cost with a reasonable contractor?

Recommendations of reasonably priced licensed GCs are welcome.

And more broadly I would like some feedback on if this is a good idea, if building a separately permitted and separately addressed ADU of 400 sf for $100k or less is doable.

Also feedback on doing it unpermitted and why that's something I should consider.

 As someone who heavily works in the Oakland market and helps many clients there on a regular basis I can provide direct insight on this. 

$80k sounds very suspect if its supposed be with permits. 

You mentioned getting separately metered that alone will cost you a minimum of $25k, so are your quotes with this included or without. Personal I would save the money on that part and just cost average the utility bills for the new tenants, It will save you funds and lag time with how slow the cites process will be to get those steps done. If you had more funds it is definitely a value add over time. 

With that said $80k would definitely be enough to get an un-permitted unit done for what you are describing, so verify what that contractor is providing you.

Good contractors are extremely busy so verify when each one these GC's can start if they are able to go right away that would be suspect to me as well. 

One other thing in terms of the range of the quotes you are describing. GC's have different baseline levels of work and qualities. Some of the gap difference in the 80 to 200k is probably some of that as well.

@Kathleen McDowell

I live in San Jose, Ca and I hold an Epic Pass Northstar and Heavenly are my two main mountains for Snowboarding. I have been going to the Tahoe Mountains since 2008.

It absolutely makes sense to instal one, I can't give you a number but the increase of EV's over the years that you see parked in the lots is very high. Just think how many people commute from the Bay Area which is a Mecca for EV's. Also if it helps a bus driver told me Heavenly on standard day has over 40,000 visitors.

When deciding which one to get, I would do a universal or Tesla charger. Tesla's with their long range and all wheel drive capabilities are going to maintain the current large share of EV's that will be in that area. Also, a lot of the rental car companies now have them in their fleets (I used work at Hertz back in the day so I stay up on that stuff). 

I also have a Tesla and installed a wall charger at my house-hack in San Jose, which I plan to offer as a perk when I move to the next one. It cost me about $2300 w/ permits and the charger. I definitely could have got it done for cheaper, but I am also planning to write it off, so I didn't care as much. 

I was concerned at first with it being a Tesla specific charger, but what you could do is also just provide adapters for people who use other chargers for their cars. 

I have seen this in practice. Some of the clients homes we have been selling have Tesla chargers, but the clients have adapters for their non Tesla vehicles. 

Lastly electric is hands down better than gas cars, maybe aside from the engine noise a sports car makes, it is finally clear it is the direction we are going and should have been going many years ago. 

While there is still a good amount of room for improvement, simple little things such as more trunk space will get more and more people to catch on over time. 

 Yes that makes sense, Just wanted to make sure that you weren't basing your move on the amount you are making here, but the amount you are making there.

I have talked to numerous people who have moved and made several thousands less, realizing that the lower cost of living didn't cover the lower wage difference.

Since you know your number difference you are prepared. 

Hello Edwin and welcome to investing.

Flips and wholesaling are great, I would say they are more methods of generating income similar to your W2 job. 

Have you already tried to get a pre-approval with a lender? You can still potentially qualify for a loan without 2 years work experience. 

Then I would recommend house hacking for your first investment because you can do lower money down owner occupied loan. Gaining rental income and appreciation from the new home you purchase.

 Sorry for your loss Nels.

Tax should change but I believe since your Mother is over 55 there is a seniors clause that comes in effect. I am not a tax professional so consult someone on that, but I believe that should save you/her significantly.

If you decide to sell, don't do any renovations first, it will not be necessary in our San Jose market.

Rehab will take you awhile to setup as good contractors are busy, high demand, and backlogged. Start reaching out to get bids on work sooner than later so they can get your project scheduled and going asap after everything settles with acquiring the home. 

 The sentiments from this string is House Hacking in LA where you currently live is the way to go. I currently house hack in San Jose, here in the Bay. I would say it is more expensive that most LA County cites.  The 60k you have can get it done. 

Also once you start house hacking you will immediately make $3000 a month in the money you are saving not paying rent. So evening if you don't factor in any other benefits you would be saving $36,000 a year which is more than half your current savings, this will obviously allow you to save for future investments faster.

This is assuming you find a home that lets you break even with your PITI vs the rent you are collecting, which you can do, with the amount of money you have saved and your income.

 I would say there are opportunities, just find something that is a bit less in a similar desirable area. If you can make a bit of cash flow when you move out, you should be aiming for that.

I am interested in attending, flexible on location.

 Many people move out of state for affordability, and while yes things are typically cheaper out of state, average wages are less too. One of the reasons many people in California can invest in large amounts out of state is because they have high paying jobs, like the numerous tech workers, that live here in the Bay. 

Double check that your income isn't going to be lessened by moving out of state. If it is, compare saving to house hack here vs Columbus. I have a house hack in San Jose, if I add the money I am saving not paying rent, I cash flowing about $200 a month. Once my PMI comes off (Have had this house two years) I will be around $480 a month. The house has appreciated over $300K, that's almost double the median home value in Colobums.

Californian house hack = Scale faster