Forget seeking 1% to 2% rentals, Try 6% instead

[Matt R.]

I typically see new investors looking for best cash flow areas. I thought I would share that with the new Calif ADU laws some might consider how that could increase cash flow with just a little homework and perhaps a few thousand in new investment. Here is one example of how 30K turns into $1800.00 a month or 6% by permitting an existing detached garage into a legal unit. My friend did this recently in the LA area and could add another on wheels of all things. Effectively turning a SFR into a Triplex sort of speak. Some might be able to take advantage of this so this post is to remind you, location really matters.

How do you think you might be able to take advantage of this new ADU law?

[Cody L.]

Originally posted by @Matt R.:

I typically see new investors looking for best cash flow areas. I thought I would share that with the new Calif ADU laws some might consider how that could increase cash flow with just a little homework and perhaps a few thousand in new investment. Here is one example of how 30K turns into $1800.00 a month or 6% by permitting an existing detached garage into a legal unit. My friend did this recently in the LA area and could add another on wheels of all things. Effectively turning a SFR into a Triplex sort of speak. Some might be able to take advantage of this so this post is to remind you, location really matters.

How do you think you might be able to take advantage of this new ADU law?

You're assigning $0 of cost to the land. If you were to buy that land, and build that structure, you'd be sub 1%. or buy the home + ADU together and rent them both.