All Forum Posts by: Sarah Jukes

okay thanks everyone. The other option is to actually build a detached 1 bed ADU on our property, which as mentioned, has become a bit easier here in Santa Cruz County, Brian C , I am also in Aptos, on 2.6 acres.

The initial return would be a lot higher because we could build one for under $200,000 and rent it out for up to $2000/mth. However, I am not sure if it would add value to our existing property, which is already a 4 bed home with an unpermitted apartment (for my relative) in the garage (it's very nice and pretty much to code). 

Does anyone know if the county would want to look in our garage when they come to see about us building a permitted detached ADU? We are only allowed 1 ADU so if they see the garage then that will cause a big issue!

It’s a great area for rentals, high demand. Purchase prices are also high so we are looking for the lowest priced with the most bedrooms etc.. we live here and know many tenants in illegal units but we don’t want to end up in a mess ourselves. It’s our first investment. Husband is a general contractor which helps.

We just got a non qual loan (we are self employed low net income), against our home which we own with no mortgage. We can use the money for what we want & pay for it once we need it, but plan to buy a 2nd property and rent it out. And breakeven (just about). They have ageeed about 50% of our current home value based on our bank statement deposits.

Finally have a refi loan on our home approved. The amount can get us an average home in a slightly cheaper area or one of the lowest priced homes in a more affluent area... we want to rent the property out and ideally breakeven. However all 3 homes we are so far considering have either an illegal ADU/unit or unpermitted rooms. Common here in Santa Cruz County CA.

One is for sale by owner $550,00, officially a 1 bed home but actually has a 2 bed apartment upstairs currently renting at $2300/mth and downstairs a1 bed apartment that could rent for about $1600 (currently empty). This would give us the highest yield but to get the unpernitted spaces permitted could take about a year here and i have no idea what cost to bring up to code. Is it too risky to rent out illegal spaces?

The 2nd home is listed at $680,000 (wed lay up to $620,000) a large 3 bed with 2 ‘bonus’ rooms downstairs of which one is currently a ‘4th’ bedroom. If we advertised it as a 3 bed rental with 2 bonus rooms does that keep it above hoses even if tenants choose to turn bonus room into another bedroom? Whole house could rent up to $4000 & would only involve one rental agreement as one unit. But would bring in lowest return on investment. But is the more conventional choice.

The 3rd home is a short sale about to list for $650,000 a 3 bed house with an illegal 1 bed ADU in back yard, the ADU rents at $1200 currently and the house would prob rent for $3000.

The best rate in return is the one with most illegal space..::is that too risky?Do you negotiate price based on permitted space? Seems the county tax unpermitted sqft.

Sorry typo can’t edit, should say ‘put name on grant deed’

Working with a Realtor specializing in Preforeclosures (she does all the door knocking, phoning, negotiating).

Going to see a house today. Owner has 3 days left to reinstate his loan. Realtor says I can pay the $30,000 to reinstate & transfer house over to me in the Grant Deed.

Then we pay his mortgage payments until we sell the house... is this even legal? Or do we get a new loan and pay off his one? currently applying for non Qualifying loans. (Self employed general contractor, income low on tax returns, but own house worth $1.2 million, no debt)

Would love other opinions on this, not just our realtor’s. Goal is to flip houses to build up larger cash deposits each time. The market here is crazy, homes sell fast, but getting good deal is tough.(Central coastal CA)

Thanks.

Advice needed, in a Catch 22 situation. We are trying to find a house to flip. The market here in Coastal Central CA is crazy and most homes sell fast. Couple of questions. We have applied for a non qualifying loan because we are self employed, and net income on tax returns low. (husband is a licensed General Contractor, specializing in renovations/refurbs).  However we own our home, no debt, no mortgage etc, valued about 1.2 million$. Are these non Qual loans a good idea? 

Any tips on finding good flips in a market where people are fighting over the lower priced homes (meaning under a million)? Is it even realistic? We have a Realtor door knocking on Preforeclosures, this is her typical method. But seems to be alot of No's and doors being slammed in her face, although this is how she's made her career. She sent me Affidavits of Death to pick out good addresses but feels rather uncomfortable. However I know once home listed it's not a good investment.

Alternative is to find a home and rent it out. However we'd like the mortgage to be covered by the rent, which will be tough to find. rents are high here, but the mortgage will be too. We only have about 10% down. plus it wouldn't give us a chunk of cash that a successful flip would (if we find one)

Other option is husband takes a job and the pay stub will make it ALOT easier to get a regular mortgage, BUT he won't then have time to fix up the flip, unless he uses the job to just get the mortgage.....We are mortgage free because he fixed up our previous homes and increased the values a lot, although at the time we planned to make them our home, not flip, but we still did well. We will not be selling our current home anytime soon.

Am I wasting my time, or will something come from this, how to make this all more effective? Thanks so much.