I pulled permits to build an ADU @ My primary residence, a 2b 1bath in my area rents for 300-400 a night according to data & other listing in my area, along with a 70% occupancy rate. I already pulled permits here in north Hollywood for this deal but since I'm self employed they didn't accept my loan application. I have liquid cash that I could sell to construct this project but I don't want to sell, I'm considering partnering but do you guys have any ideas ?
Real Estate Agent · Los Angeles, CA · Member since 2019 · 302 posts · 163 votes
4y
Also look into doing furnished rentals for 3-6 months to get top dollar. I've also heard of the strategy of living in the adu and renting the house on Airbnb. I'm building an ADU right now and can't wait for it to start bringing in some extra income.
Also if you are interested in short term rentals, David Greene is hosting a meet up in 2 weeks in Long Beach. Hit me up for details.
To build 1 ADU , what sort of cost are you looking at ? Just materials ? You could probably get 0% on a credit card for a year and pay that off with your projections.
Message me on my website if you want to try applying to ulterior loans type and dont like my cc idea!
Investor · North Hollywood, CA · Member since 2016 · 2 posts · 0 votes
4y
Hey Jason, I live in North Hollywood. In last night's LAREIA meeting, somebody mentioned a company called Backporchhomes in Riverside that makes ADUs on wheels (which look a lot like tiny homes). There may be other companies with similar offerings. The web site shows these starting at around 65k so its an affordable option to consider if you don't qualify for a traditional loan and cannot find a hard money lender. I recommend hitting up the next LAREIA meeting as they have time at the end to help with real estate challenges and there are folks on there looking to invest or help others.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
I know of no jurisdiction in CA that permits an ADU to be used for rentals less than 30 days. Have you verified that your jurisdiction allows an ADU to be used as an STR? If your jurisdiction allows an ADU without owner occupancy, I would be very interested as I would consider purchasing some properties that had detached structures (garage, workshops, etc.) that could be converted to ADU at reduced cost compared to ground up construction.
It does not need to be rented for 30 days brotha, that’s why I’m trying to raise money for this deal, its a no brainer, construction is significantly lower as I don’t have to build a foundation roof etc.
I pulled permits to build an ADU @ My primary residence, a 2b 1bath in my area rents for 300-400 a night according to data & other listing in my area, along with a 70% occupancy rate. I already pulled permits here in north Hollywood for this deal but since I'm self employed they didn't accept my loan application. I have liquid cash that I could sell to construct this project but I don't want to sell, I'm considering partnering but do you guys have any ideas ?
How long you been self employed? Do you file your taxes?
Have you considered paying cash for the project, then refinancing after you've met lender requirements or working with a lender that accepts your SE income?
It does not need to be rented for 30 days brotha, that’s why I’m trying to raise money for this deal, its a no brainer, construction is significantly lower as I don’t have to build a foundation roof etc.
You seem Very confident. Is this true only with owner occupied or also true non-owner occupied? What is the jurisdiction?
Real Estate Agent · Los Angeles, CA · Member since 2019 · 302 posts · 163 votes
4y
Also look into doing furnished rentals for 3-6 months to get top dollar. I've also heard of the strategy of living in the adu and renting the house on Airbnb. I'm building an ADU right now and can't wait for it to start bringing in some extra income.
Also if you are interested in short term rentals, David Greene is hosting a meet up in 2 weeks in Long Beach. Hit me up for details.
Also look into doing furnished rentals for 3-6 months to get top dollar. I've also heard of the strategy of living in the adu and renting the house on Airbnb. I'm building an ADU right now and can't wait for it to start bringing in some extra income.
Also if you are interested in short term rentals, David Greene is hosting a meet up in 2 weeks in Long Beach. Hit me up for details.
Robert Reynolds
I believe in the city of Los Angeles, you can only STR your primary residence. You cannot STR the primary house if you live in the ADU.
What you propose may be allowed in Los Angeles county.
Make sure you know the ordinances where you property is located but also make sure you understand the sentiment with respect to STRs as this can dictate future ordinances.