All Forum Posts by: Sebastian Marroquin

https://www.biggerpockets.com/forums/521/topics/1166981-property-crawl-3-locations-meeting-in-highland-park

Meetup page on here: 

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Hello all: I am hosting a meetup on Feb. 10th (Sat.) starting at 11am: in Highland Park CA 

Where we will do a 'home crawl' 

We will meet at the first property, we will walk the ADU project in progress in the framing and rough phase and then answer some questions about it. Then we will go to the next project for another 15 to 20 mins where we are doing a full remodel on the home for a rental home and permits in process for a new construction ADU, and then we will end in at the 3rd project also a new construction ADU. Hope to give you a lot of value there and hope some of you can make it!

Let me know if you would like to attend? 

1. Highland park 

2. Pasadena 

3. El Sereno 

Hello ALL! Excited to start hosting our Property Crawls again! (Like a Bar Crawl where you go from bar to bar but with properties). 

We will meet at the first property in Highland Park, CA where we are helping the client with a 2 level 850 sq ft ADU. New construction 2 bedroom 2 bath. Then we will go to Pasadena and then to El Sereno. We will be at each of the first 2 homes for about 20 mins. starting at 11am sharp. Then we will meet-and greet at the last property in El Sereno. *** Very important - to message me on here with your name and email and saying that you will attend. I suggest you check on here a week or a couple of days before the FEB 10th date so that you can get details as to where to go first.

You can also DM on this forum. The problem has been that people do not check this forum and only put their emails on here and it becomes very difficult to communicate. 

So: name and email below. for details on the first address: there or by email, I will give you the 2nd and 3rd address. Pretty simple. 

We will go over the purchase price for each, how they bought it, how they are financing the renovation, ADU, etc What they plan on doing with the property? What they plan to do next? How much everything costs and how much they expect for rents!

I am helping them do everything - purchase, design, build and rent after. 

My name is Sebastian : 13 years as a Realtor and started with our first rental and primary residence about 5 years ago. 

Hope there is a lot of interest and look forward to meeting you all! 

Let's be respectful of the homes we visit please! 

Sebastian Marroquin 

Reporting that our ADU rented out for $1850 per month + $150 utilities! Our mortgage is effectively $800 per month plus utilities now!

We are also helping a client do a construction loan for a $750k purchase plus $400k for renovations and adu with 5% down payment. 

More to come! 

many moving parts here... 

My 2 cents: became part of someone's investment (Don't put any money in right now) but just see if you can become part of the process for learning purposes. Think about a savvy and reputable investor, or a Realtor that invests or works with investors that are doing different kinds of deals that you are interested in. BRRRR or house hacking, or building, or additions, or long term holds etc

figure out what you like and want to get into first! 

Then gain experience from what they are doing while bringing value to them (think, running errands for them in their RE business) or helping them with cold calls, sit in for inspections etc 

If you meet the right people: you maybe would do this for 3 to 6 months. If they have active deals, you will learn a lot from them! Once you see how the moving parts work (like : finding deals, construction, structuring a deal, managing a deal etc ) 

Then you can think about investing. 

With the money you have, you could buy all cash for about $100k to $130k and then renovate with about $50k to $70k : Then refi and keep the property or flip them. The key is finding good deals and managing the rehab well! then selling them with a good Realtor. Rinse and repeat. Do 3 to 5 deals there  in a cheaper state. Learn the process and then bring $300k to CA and do it here. 

I would say, learn, gain experience, go slow, enjoy the learning process and take action. 

Do not spend your money for the next 6 months while you learn and then you can go for it full throttle. Even, after the 6 months of learning, you could pay $3k to $5k from a reputable investor that has a good program. The point of that will be the resources and networking, not so much the course itself. But it could help. 

Be careful of all the sharks that will try to get you to pay now or to invest in their shiny great investment now. 

Last thing, don't re-invent the wheel... at the end of the day, equity and passive income (cash flow) are the two important things. You will def. learn more later. Reach out if you have questions. I grew up in pasadena also! Good luck 

Quote from @Robert Ellis:

Quote from @Sebastian Marroquin:

Coming on here to share my experience planning, designing, permitting and the construction process for our 380 sq ft Garage Conversion ADU. This ADU will be a 1 bedroom and 1 bath unit with full kitchen and bathroom. I am a realtor in San Gabriel Valley in LA county. Our offices are in Pasadena,CA and I live in Claremont, CA. We have helped many clients purchase a primary home and rental property and have helped with the ADU process. There is a lot of information out there but seldom do I see everything in one place. From purchasing the property to planning the ADU to getting the permits and then going through the construction process.

The reason why we purchased this particular property was because I kept seeing on forums that you could not cash flow anywhere in CA and much less in LA County. I wanted to prove that theory wrong. So, we set out to find the right property. I found an Off Market property in Claremont when fixers were selling for $680k, we bought our home for $550k and got a $50k credit from the seller for some of the renovations. It took us about 2.5 months to renovate the entire property including all the old systems (HVAC, Plumbing, electrical and roof along with everything else). 

We started the permit process in Nov. of 2022 and finally received approvals to start the project in June of 2023. 

The architectural plans costs: $6k 

The city fees were a total of : $7,500 

We applied for a city grant and got approved : for $20k once we finish the foundation. (We will be getting that in the next 2 weeks). 

So far (1st week of work), we have finished the first part of the foundation (trenching, rebar and plumbing) And assuming we pass the inspection on Monday, we will be pouring concrete that day and will start framing on Tuesday (of the second work week). 

I will be sharing on here: 

. Existing property/ Lot and acquiring tenants for the rental 

. ADU requirements (city and LA county)

. Planning and permits with city (timelines) 

. Soft costs, city and impact fees, 

. Architect, engineer, title 24 for energy calculations

. Contractors, bids, and actual costs 

. Value of home and potential Value added by this project 

. anything else you have questions about! 

Address: 353 saint Bonaventure st. Claremont CA 91711 (check on Zillow if you like to see purchase etc ) 

(We are finishing the landscaping, driveway and ADU together)

 ADUs are super popular near downtown columbus ohio as well with a council variance. did you do all the zoning and plans yourself or hire an architect or attorney? most around us hire one of those but we typically do it as part of the project if we are hired as the contractor. 

 Hired a drafter for the building plans and city runs. $5k for a conversion out here. some are charging more ($8k to $12k ) 

Just rented the unit last month: Started at $2k plus utilities for a 400 sq ft 1 bedroom unit. Only received about 5 applicants so we brought it down to $1800 + $150 utilities 

The tenant will arrive in January! :) and our mortgage will go from $2,800 

to $1,300 per month! pretty good for us! (if this was not a long time or forever home for us, I would have built a 2 bedroom adu (probably an extra $20k to our budget and that would rent for about $2,500 here) and then maybe a jr ADU to the main home for another $50k and that would rent out for about $1,500 per month.

That will likely be our goal for our next rental. 

ADU: $2,500 rents

Jr. ADU : $1,500

Main home: $3,500 

total rents: $7,500 per month. 

Interest rates are coming down so could be great! 

It does depend on the city and cost of labor. 

I would suggest you reach out to multiple contractors in the city with good reviews and see what the prevailing average per sq ft for something like this is. 

I would say: $170 per sq ft is his costs : and even if he was willing to give you a good price, I would say it would be closer to $200 to $230 per sq ft not counting utilities (sewer, water lines, electrical lines from the st and even hardscape) and not including permit and architectural costs. 

usually I see about $200 to $250 per sq ft for construction only and if you have a relationship with the contractors : otherwise the price could be about $300 to $400 per sq st (that's for standard material and single level) anything outside of that would be more. 

And just bc I can get $200 per sq ft in CA does not mean you can where ever you are and why it is important to interview contractors in your area that are GOOD and trustworthy. 

Quote from @Rick Albert:

Is the City already approved the lot split? I've heard it can be extremely difficult because a notice goes out to the neighbors and they tend to turn it down because of density.

What is the cost of the land? Could the $1M in construction costs be used to buy already existing properties? Sounds like a lot of loss opportunity costs. In that same year for the units to be built (not including the time it takes for the lot split), there are plenty of 2-4 units on the market that could be rented out immediately. 

Thank you for the comment and points of conversation. :) 
This client is a contractor + Engineer and has about 40 ongoing projects he is managing with his (construction clients), he knows exactly what he is doing, has the money to do so, has done multiple projects like this one and more than anything, he likes these type of projects. If this were my money: I would probably do something slightly different, but it is not. He has more than enough experience and knows the opportunity costs and options. So, in this case, he is making an educated decision to move forward. 
I would do this project with leverage and instead of doing one, maybe do 2 or 3 similar projects. 
Nothing against your suggestions at all. 

Quote from @Kenny Cho:

If this were my client, I would advise against this.

Much better ways to utilize 1M in cash.

 Thank you for your opinion and suggestion but this client has 30 years of experience. He is a contractor and engineer and ** he is NOT asking for my advice on this and the purchase. I am simply helping him with comps and selling the properties after completion :) 

(... I am how ever, helping and suggesting he talk to my lenders that can provide a construction loan for the entire project with under 20% down payment all in). 

But thank you for the comment! :) 

Quote from @Geoff Regan:

Seems like they aren't paying attention to this post. Bummer 

 Who is them? :) curious minds would like to know