Oakland, CA · Member since 2018 · 12 posts · 11 votes
Hi!
I've been on this journey for about 6 years saving for my first investment property as a small business owner. I just bought a 1200SF fixer in East Oakland. House is currently a 3/1 and I plan to convert the house to a 2/1 long term rental and a 1/1 mother in law unit to be used as a short term rental. In a few years I would like to leverage the cash flow to gut the large stand alone garage and create a third term unit out there.
Very excited for forums like these, I have so much to learn! Excited to connect with others trying to handle zoning issues and decide between rentals vs. Air BnBs. Am I correct in thinking I will only need zoning for a duplex if I make the 2nd tiny unit in the house a Mother in Law?
Real Estate Agent · Oakland, CA · Member since 2016 · 123 posts · 77 votes
7y
One note here, though seems like it was mentioned above - you technically cannot have an ADU with a duplex. You can have an ADU with an SFR. When you build an ADU, you don't have to pay impact fees.
Good thing is that you're in Zone 3, which means you'll be paying lower impact fees for each new unit you create (relative to Zones 1 and 2)....assuming your zoning designation allows you to build 3 units.
Rental Property Investor · San Ramon, CA · Member since 2017 · 350 posts · 611 votes
7y
Congrats on making moves!
You will need the zoning to be as multifamily and not single family residence. Then each zoning has density max allowable, such as 4 units or 10, etc. Best if you check with the City planning and building department with your APN and start there.
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
7y
@Tobey Grey you FIRST need to go through zoning to make sure you can do this. Assuming zoning will allow you to add density to the are, you will need to go to planning. Make a drawing of your SFR and show them what you are thinking of doing. Depending on the amount of work you need to do, you can draw up simple plans to show the planner what you intend to do. Assuming they give you the green light, you will need to get permits. Depending on the amount of work you will do, you may or may not need actual architectural drawings and engineering calculations if you are moving load walls. In theory you will also need plumbing and electrical drawings so you can get those permits. They may also ask for electrical and gas load calculations... Unfortunately, there is a lot of stuff to do.
Real Estate Agent · Oakland, CA · Member since 2016 · 123 posts · 77 votes
7y
One note here, though seems like it was mentioned above - you technically cannot have an ADU with a duplex. You can have an ADU with an SFR. When you build an ADU, you don't have to pay impact fees.
Good thing is that you're in Zone 3, which means you'll be paying lower impact fees for each new unit you create (relative to Zones 1 and 2)....assuming your zoning designation allows you to build 3 units.
Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
7y
@Katie P. I'm pretty sure I sold your broker SkySlope when I worked with them a few years back lol! Tangent, I know.
Are conversions like the one proposed in this thread really common in Oakland right now? I deal in different markets but this sounds like a lot of trouble to go through. I just bought a house that I liked/fit my needs and then took the remaining funds and invested in cheaper cash flow in other markets.
Real Estate Agent · Oakland, CA · Member since 2016 · 123 posts · 77 votes
7y
@Account Closed cool!
Regarding your question....I think both buy-and-hold investors and flippers are looking for more creative ways to add value to their acquisitions, considering this market seems to be softening (while sellers are stubborn and think their homes will continue to appreciate the way they have the last five years). I see many interested in purchasing underutilized lots and/or properties zoned for higher density.
Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
7y
@Katie P. got it- and that makes sense provided the lots are already zoned appropriately. Rezoning isn't something that's easily performed for me in other markets because sometimes the characteristics of the lot/improvements inherently cannot meet the requirements of the desired zoning classification.
Oakland, CA · Member since 2018 · 12 posts · 11 votes
7y
@Paul Choi Thanks! This has been a big step for me I've been saving for quite a while and it's exciting and simultaneously terrifying to be making moves!
@Arlen Chou Fortunately I am not needing to move any walls, the unit is very easily split into two units by just walling over one doorway. I will then need to add a kitchenette to the second unit and a bath. This leaves one 2/1 and a small 1/1 studio. Agreed I will need quite a bit of footwork to cover all my bases. I do have some concerns if I make a mistake in my proposal I may be denied and then will be without option. Any idea if this is true or if I can re apply?
@Katie P. Can I have a 2/1 in the main house, a rear mother in law studio, and an ADU? Or is a home with two units just a duplex no matter how small the second one is or if it contains appliances? I was hoping to use this In Law as a short term rental as there is a college and stadium nearby.
Any idea how I can calculate exact Impact fees? Would I pay impact fees for a short term rental?