All Forum Posts by: Zachary Jamison

@Eugene M.

I haven't been able to get a clear answer on whether or not that is actually a viable option. I currently hold a VA loan, so I'd have to refinance to get the VA eligibility reinstated which is doable. I'm not certain that you can use the VA construction loan to build an addition as opposed to a new home, especially since I don't own the land outright.

@Justin R.

The plan was to have a GC run the thing from top to bottom. I have zero experience in the home-building art so I’m not sure where to start otherwise. Problem is obviously the price point, 300-325/sqft. 

If I'm going to subdivide, I imagine the additional fees, work, and time required are going to eat up a lot of that potential money. That's why I was leaning toward the ADU. I guess I'm just looking for some general guidance as this is all very unfamiliar to me. I'll DM you.

@Dan H.

The lot size will not support a project that big. Also, I’m having a tough time figuring out how to finance building one property, I imagine multiple  will be even more difficult. That plus the associated fees with subdividing as well as all the improvements required to get a 1940s home up to code which is a requirement before subdivision. 

I’ve found myself in somewhat of a predicament with no clear answer on how to move forward. 

Background:

Purchased a home in the San Diego area using a VA loan in 2016. Purchase price was 470k, the outstanding balance on the loan is 440k with a 3.5% interest rate. I lived there for the first year and change to satisfy the VA owner occupancy requirements but have since moved and rent a condo in a more desirable neighborhood. The home is currently leased for a year at an amount that pays my mortgage exactly (2650)

Situation:

I bought the house with the intention of subdividing the lot and building a second home on the property. a lot of the investigative work and planning with the city has been done by the previous owner but is outdated. All those documents belong to me now (tentative parcel map etc). It seems to me like it would make more sense to build a large detached ADU on the property and and rent out both units. I'd be maximizing my space and creating a good amount of cash flow without all the crazy requirements to physically divide a lot. It is zoned accordingly and all the preliminary conversations with the city, the ADU project looks like it would be a go barring any extreme unforeseen issues. Construction estimates have been 350-400k. The new home would be a 1200sqft 3bed/2bath and I expect to be able to rent it for about 3,000-3,100. The problem is I'm not sure how to finance it. Right now I expect the property to appraise around 550k as is. Since I am not in an OO situation, the broker said I wouldn't be able to actually pull any cash out and refinance. If I want to just straight up refinance into a conventional loan, that too would cost me 15k.

I know I’m missing a ton of information. I’m just looking for some creative ways to finance this project and start making some cash flow before moving on to other investments. Thanks in advance.