whatever you do, avoid balloon payments girlie.

I suspect it's an old line that failed and required replacement.

I would buy it also for roughly the same price (it will be in good condition but may require some small fixes for a tenant), but it's bigger and has an extra bedroom so it will rent for $1400.I could have also ran this model by assuming that I would get the same type of property as the turnkey, but for $125k and would rent for $1200 as the turnkey would.

CA maybe as high with their EIR requirements that cost 250k to 500k just for the EIR reports.

If the water bill is $100 a month, increase the price by 20% (or whatever you decide is fair) to compensate you for the time required to split and bill and to cover additional use when tenants squander the utility.

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.

I’d really appreciate any insights, whether there’s anything I missed, any places you’d avoid, or any tips for STRs in this market.

Hi Dave,The topic is 2 years old which you might not have noticed.Closed at a 7 must have been urban core in a highly desirable area.I am seeing trade at a 9 here with no rent bumps in the primary term.For anyone wondering many tenants are credit tenants.There is a huge difference in that INVESTMENT GRADE tenants are BBB- or higher.The ones below that are considered junk status by many lenders which doesn't make them a bad investment just harder to get financing and more to put down.The dollar stores (there are 3 big brand companies nationally) with other smaller regional knock offs are okay as long as you are not buying in obscure rural locations.The fronts are usually brick facade and the sides are sheet metal.You second and third generational tenant will not have the same per sq ft sales they will leaving you with less of a re-rental return.Having said this I have seen some very nice all brick ones where the city required a certain architecture and look to approve the building permits and process.Those typically run 1 million in price to 1.2 versus the cheaper ones in rural areas at 500k to 800k.

What are your requirements?

Hello Adam, The way I draft our contracts in Pennsylvania I include a clause that requires the tenants to carry $10k in personal property and $100k in liability.