All Forum Posts by: Paul Dashevsky

Hi Derrick- I'm happy to provide you some 'mentoring' on your assets and potential options. The advice above is a good start, but there are other things to consider like a 'step up in tax basis' when you inherit property...thats something worth discussing with a CPA/tax attorney. Also, loan rates are very low right now, so something worth considering is mortgaging a property to pull out the cash to renovate (or add ADU)...and increase the rental income. Of course, the current crisis and potential affect on future real estate values should weigh into your decision matrix. Anyways, I'm happy jump on a call and share my experience investing in RE over 20 years if that helps.

@Jonathan Taylor You may want to consider reaching out to Estineh Mailian in Planning or Chad Doi in Zoning...they are the people who wrote the latest city memo interpreting the state ADU guidelines : https://planning.lacity.org/odocument/ec892d01-7873-455a-8e15-78a771b2c7ac/ADU_Memo_2020_Final_2.26.20_(1).pdf

I invest in Los Angeles because its 1) a huge diversified economy that's not reliant on any one industry and 2) the large size of LA creates a 'gravity' that attracts people to move here and creates great 'network effects' that causes the formation of many new ideas and new businesses.  New businesses = new jobs = more demand for all types of real estate (housing, office, retail, etc) = increases in rents in the long term.  Plus the weather ain't bad!  

Our free service helps with that. Greatbuildz.com 

You can check out SKSI & Maxable for design and Greatbuildz for contractors/blogs on ADUs. I also have an ADU construction checklist if that would be helpful to your in-laws. Best, Paul.

Yes, raw land gets hit hardest during a downturn.  However, buying raw land (if you're not an experienced development company) is EXTREMELY risky.  You need to understand zoning, entitlement risk, political environment, local neighborhood groups (NIMBYs), water, sewer, electricity, gas availability, soils, grading, drainage, environmental issues like endangered species, and the costs of all the items just mentioned.  If serious, get with an experienced local land broker than understands all the details.  Most raw land (unless its infill) has very little potential to be developed because one of the above items is 'missing'.  It just takes one thing to be wrong to prohibit development...imagine you have everything except for sewer...you're dead in the water.  raw land = crazy risky. 

The city of Los Angeles is not currently requiring solar for new ADUs. How about other cities around Southern California?

@Nick Hedberg Our contractors have been bidding $70-100k for a standard garage conversion (in Los Angeles County), not including plans and permits.  I'm sure you can do it cheaper if you 1) act as the GC and hire all the subs or 2) do the construction yourself.  

@Sydney Sherman   

From my experience, ADU plans cost between $3500 and $12,000. The price for plans should include architectural, structural, title 24, LID for over 500sf, etc. BTW, you're probably aware of this, but just wanted to mention that JADU comes with occupancy requirements, so property owner will need to either 1) live in the main house or 2) live in the JADU...you cannot rent out both. Also, I just created a bidding checklist for ADU construction (all items a contractor should include in their bid)...let me know if you'd like me to email you a copy.

The city of Los Angeles is not currently requiring solar for new ADUs.  How about other cities around Southern California? 

The problem with duplex, triplex, and up is 1) rent control and 2) they are very expensive (low cap rates). I think you are better off finding a single family home in a reasonable price range and adding an ADU (making it essentially a duplex). If it has a garage in the back already that you can convert, that will save you some money. If you find a house with an attached garage, you can convert that into a JADU and rent that out (as long as you live in the main home - occupancy requirement).

Any way you look at it, the cost to build an ADU is cheaper than the cost per square foot it costs to buy any existing property in LA (SFR, duplex, etc) plus you get brand new built space rather than on the 'old' space of an existing property. Garage conversion to ADU cost $70-100k. New ADU construction is $250-400/sf. There is a FNMA loan called a HomeStyle loan that will fund your home purchase AND the renovations or construction of an ADU...