Here is a list of why adding ADUs in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

Selling and reinvesting in higher cash-flow properties or other opportunities might provide better returns.

I'm a mother of an 8 and 11 year olds, my husband works full-time but I quit my job when we had my daughter and wanted RE investing to replace my income.

Hi Steve, glad to have you as a part of this awesome community!

Also, why do you think so many people are advised to get an LLC when starting in RE investing? 

Yes, any cash you take out of a 1031 exchange that isn’t reinvested into a like-kind property is considered “boot” and is subject to capital gains tax.

I would reinvest in a another property and use a 1031 exchange to detour taxes.   

Plus, they provide great opportunities for cash flow, especially if you’re looking to scale and reinvest profits into future properties.If you’d like to connect or chat more about strategies, deals, or even market insights, feel free to reach out.

Your reinvestment targets for a 1031 exchange would have you purchasing $700K of replacement real estate using all $500K of equity. 

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