RECC: 5 ADU's on an Existing Property with CashFlow Permitting

[Andrew Greer]

Learn about cashflow permitting on an existing property with the project owner James Heinzman.

The event "5 ADU's on an Existing Property with CashFlow Permitting" revolves around the development of five Accessory Dwelling Units (ADUs) on a property with existing structures. Here's a summary based on the provided information:

Property Overview:

• The property initially consisted of four units: three 1-bedroom units and one 3-bedroom unit.
• One of the 3-bedroom units was operated as an Airbnb while the 1-bedroom units were leased out long-term.
• The plan includes developing five new ADUs on the property:
• Two 2-bedroom units (planned for midterm)
• Three studios, two of which are deed restricted.

Financials:

• Purchase Price: $1.675 million
• Market Appraised Rental Value (MARV) after development: $4.5 million
• Estimated Build Cost: $825,000
• Estimated Permit/Design Costs: $120,000
• Rehabbed units cost: $210,000 (Note: unpermitted)
• Holding costs are currently covered by rents from existing units.

Challenges:

• Permitting has been a prolonged process, spanning 24 months, largely attributed to poor choices in architects.

Key Points:

• The event highlights the strategic addition of ADUs to enhance the property's value and cash flow potential.
• Despite challenges in permitting and potential concerns about unpermitted rehabbed units, the project is financially viable, with holding costs mitigated by existing rental income.
• The property's transformation is expected to significantly increase its market value, offering both short-term and long-term rental opportunities.

The event provides insights into navigating real estate development, emphasizing the importance of thorough planning, managing costs, and overcoming regulatory hurdles for successful project execution.

This event is FREE to attend!