All Forum Posts by: Tim G.

I worked it out, I didn’t realize the SEV is half, so I based taxes on the whole number. I should be at $3600 a year in taxes, putting my monthly cash flow at $400

Looks like I was about 33% lower on my estimate. Good reminder to have multiple exits on a property.

 I’ll be honest it was a pretty shoot from the hip decision. I confirmed market rents were $1750 in this neighborhood and priced out everything else but didn’t confirm tax values. 

Should it be a bad rental the Exit value is high enough it can be a flip or a wholesale. 

How does someone confirm property taxes? I can’t believe a $130k home would come with that kind of bill ($7k) 

Interesting topic. I just picked up a property in Grand Rapids and don't have a clue how to estimate property taxes. Depending which estimator I use online I'm getting numbers from $2400 annually (expected) to $6800 which would be cash flow murder to the place. 

Can anyone recommend how I get an exact figure on this? Purchase price was $127,500

I've sourced 100% of my deals in Southern California since 2016 from SEO marketing. 

Great question, the grey areas in ADU's are huge. One thought, I'm working on a similar project.

In Oceanside, there is a process (likely just a designation formality) that basically allows you to designate the existing SFR as the ADU and the new construction ADU as the SFR. I believe likely to be done in this case, when the ADU is larger. Or.. to allow you more building flexibility.

This could be something as simple as stating, "The city allows us to swap designations, the ADU we built is now considered the home, the smaller structure is the ADU". 

The situation might be tainted with this lender, but I would be very interested to hear how it goes if you approached it with a new lender and kept the story straight that the bigger structure is the house. You might be in the clear. Keep us posted. 

This is a fascinating thread. 

Here's a method that could work that I am exploring. 

Where I'm building my ADU. I am allowed to reclassify the existing structure as the ADU and the new construction as the SFR main house. So if you have a small house like I do on the lot and plan to build another. By classifying the new unit as the main house, in theory I could construct a garage in that house. Then turn it into a JADU. This would only work for those who have the room to build something with a garage on their new construction and have the capability to swap the structures classification (old being the ADU and new being the SFR).

I don't know if this is possible, but the idea seems feasible. Does anyone else have any updates to this year old thread on how things have progressed for them? 

ADU's are one of the top plays right now, there are many variables but if it works. It tends to work well.

The costs are all over the place, you have owner occupants with equity that are being used as ATM's by designers and contractors who can provide the "be an investor HGTV" experience. You also have the investors with construction experience, who can commit to not overbuilding and they're coming in with some solid numbers. Under $200 a sq/ft 

Besides the above mentioned be sure to know how are you going to pay for it. Often the house does not appraise at a value that will allow you to retrieve those costs fully. But, it'll be very good cash flow. One perk to this is assessment values seem to be coming in very low, so your property taxes will be favorable. Also, consider how you build this additional unit while not interfering too greatly with your tenants on site. 

I am building an ADU at a property that currently cash flows $300 a month in Oceanside that I also consider a poor investment until the ADU is in then its going to be fantastic. There could be another play in which you build a 1200 sqft SFR with a garage, then later turn the garage into a Jr. ADU. Now you have three units.

The Data Driven Real Estate Podcast, which is hosted by two well respected industry professionals  (Sean O'Toole & Aaron Norris) recently released an episode I think is worth listening to. They interviewed Dr. Karyn Lacy a sociologist from the University of Michigan. 

Data Insights into Race, Class, Segregation and Housing Dr. Karyn Lacy:

Both Sean and Aaron the hosts are known for their expertise in data collection and how to present it, have created a one hour episode that anyone who has commented on or read this thread could benefit from listening to. 

Funny story, I had something similar happen. 

Was interviewed on BP podcast in 2014. Someone sent it to my employer, I'm not sure why. I was a full time sales rep for a very large corporation. Apparently they did an internal review and determined in California I could not be fired as it was not a conflict of interest. I had co-workers with side gigs like a musician and landscaper.  

I eventually quit a few months after their discovery for personal reasons, I was ready to go full time, not knowing they knew or that I had been part of an HR investigation. 

I imagine most states have similar rules for termination, but I was still doing a pretty good job at my corporate gig so perhaps that had a factor into it. But this story seems odd. 

 Really sorry to hear that. My outlook is more bleak than a month ago at this point. We have no leadership.