All Forum Posts by: Steve Buchanan

@Steven Nguyen I'm interested in meeting up for a mastermind group in LA/OC. Not sure which Friday you were referring to but I could do the Santa Monica venue you suggested next week. A little background on me - I mainly do multifamily value add here in LA, have just submitted plans to build my first ADU and also have done a couple TIC redevelopment projects.

Looking forward to this event. See you all Saturday!

I've had nothing but good experiences renting to Section 8. The best part being that the portion of payment from Section 8 (the largest portion) is virtually guaranteed to come and the tenant's portion (smaller portion) has always come (*knock on wood) since the tenant doesn't want to lose their Section 8 status. This has been very comforting during the pandemic and eviction moratorium. Also Section 8 has generally been good about accepting our rent increases when we can show other units at the property or in the area renting for that amount. 

@Alina Ho it’s currently 8.6% until new CPI numbers are released later this year.

@Jason Kang have you thought about house hacking a duplex or triplex in LA? If so I bet @Jon Schwartz could help you out with this. He’s the guy for LA house hacks

Good luck!

@Patrick Collins interesting point on converting offices and pool houses to preserve parking. Great website you have. I'll definitely keep you in mind if we do an ADU deal!

@Shiva Bhaskar that's fantastic that lenders are counting the income. I'll give my mortgage broker a call as well to verify. 

On another note I saw recently that you host a meetup in the South Bay. I'll try to attend the next one whenever that might be!

@Chris De Celle thanks for the response. I'll message you for his number. Do you know if he has experience with ADUs in the 5+ unit space and not just residential 1-4 unit properties?

Does anyone have experience adding ADU's to 5+ unit multifamily buildings in Los Angeles or elsewhere in California? I see deals highlighting this as a potential option, I'm just curious if once completed how lenders will perceive them. For example taking a 6 unit building and converting 2 garages into studios. Will lenders now see this as 8 units and count the full income of the new studios?

I recently completed a project where we purchased a 4-plex in Los Angeles, did a major renovation and then sold the units individually to separate buyers who purchased as Tenants in Common (TIC). The entity structure we used was a limited partnership where I acted as GP via an LLC and then had investors who were LPs. In preparation to dissolve the two entities (limited partnership and LLC) I spoke to an attorney who has advised keeping both entities open for at least four years to protect against 3rd party claims. He also advised maintaining a reserve for contingent liabilities.

Since this is CA the annual cost to keep the entities active would be $800 a piece for CA LLC fees plus a couple hundred bucks to file tax returns.

Is it typical to keep these entities active for liability protection? Would it change if this were a single family flip or a large scale development?