ADU+DADU-Condos, How To Acquire Property

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ADU+DADU-Condos, How To Acquire Property

David Benton
Member since 2022 · 4 posts · 2 votes

I just finished my 2nd DADU but I'm green to RE investing. I'm really excited about being able to do ADU+DADU condos in my county since they just changed the rules. I have plans, engineering, and all the contacts and sourcing for a 1200 sqft 2br/2ba DADU that I just built, and I've identified a property I think would be great. It's being remodeled by a RE investor that intends to flip it, but he seems to have slowed way down with the recent market drop. It wasn't showing sold online so I looked into the records and see this RE investor has recorded a deed of trust and given the owner about 50% of their purchase price for what I assume is the right to remodel and sell.

It looks like I could add an ADU to the existing house and build a DADU with plenty of room to spare, I just don't know how to go about getting this property. From the workers I've talked to I know they're trying to do a really upscale remodel and get top dollar which I don't think can afford outright, but I'm interested in the loan/build/refinance examples I've seen. From that deed it looks like he can't have all that much into it yet, but I'm not sure how that works. It's vacant so it's costing someone money, the RE investor or actual owner I don't know. But I'm wondering if any of this makes them more motivated to offload it or if I could get a deal. Any advice would be appreciated, thanks!

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  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @David Benton-  if you havent already tried  locating and contacting the owner of the property - try this  tactic  .... if you have a local realtor  that you work with - maybe ask them to intiate contact as well  ....if you need  assistance determining of what is possible for the dadu/ adu   on the specific  property - you might have a  real estate type attorney  review and assist  ...finally  - make sure you have  financing  lined up  so that  you know this is possible once you nail down anf  find a  property

    0Reply
  • Scott Simpson
    Investor · Bellevue, WA · Member since 2021 · 20 posts · 11 votes
    3y
    Quote from @David Benton:

    I just finished my 2nd DADU but I'm green to RE investing. I'm really excited about being able to do ADU+DADU condos in my county since they just changed the rules. I have plans, engineering, and all the contacts and sourcing for a 1200 sqft 2br/2ba DADU that I just built, and I've identified a property I think would be great. It's being remodeled by a RE investor that intends to flip it, but he seems to have slowed way down with the recent market drop. It wasn't showing sold online so I looked into the records and see this RE investor has recorded a deed of trust and given the owner about 50% of their purchase price for what I assume is the right to remodel and sell.

    It looks like I could add an ADU to the existing house and build a DADU with plenty of room to spare, I just don't know how to go about getting this property. From the workers I've talked to I know they're trying to do a really upscale remodel and get top dollar which I don't think can afford outright, but I'm interested in the loan/build/refinance examples I've seen. From that deed it looks like he can't have all that much into it yet, but I'm not sure how that works. It's vacant so it's costing someone money, the RE investor or actual owner I don't know. But I'm wondering if any of this makes them more motivated to offload it or if I could get a deal. Any advice would be appreciated, thanks!

    Very cool. What size properties are you targeting to add this large of an DADU to? Do you have any photos of your DADU that you are willing to share?

    We have plans for a 1500sq ft 4 bed / 3 bath that’s proven to be perfect size for STR and have been curious about building it as an “DADU” elsewhere on a large waterfront property in the Sound.
    0Reply
  • David Benton
    OP
    Member since 2022 · 4 posts · 2 votes
    3y
    Quote from @Dave Skow:

    @David Benton-  if you havent already tried  locating and contacting the owner of the property - try this  tactic  .... if you have a local realtor  that you work with - maybe ask them to intiate contact as well  ....if you need  assistance determining of what is possible for the dadu/ adu   on the specific  property - you might have a  real estate type attorney  review and assist  ...finally  - make sure you have  financing  lined up  so that  you know this is possible once you nail down anf  find a  property


    Thanks for the tips! Some interesting things have happened with the property in question and I'm waiting to see what happens next. My strategy has changed however and I'm going to be adding a 1200sqft 3br2ba AADU to my principal residence now instead, same as the DADU it will be the maximum size the county allows. Effectively making my SFR a triplex. Would be very nice to do the same with this other property, maybe when I'm done with the AADU I can leverage the equity to make a move on it. Looking at condoizing to tap equity but getting hung up on my my existing mortgage, naturally I don't want to give up this rate.

    0Reply
  • David Benton
    OP
    Member since 2022 · 4 posts · 2 votes
    3y
    Quote from @Scott Simpson:
    Quote from @David Benton:

    I just finished my 2nd DADU but I'm green to RE investing. I'm really excited about being able to do ADU+DADU condos in my county since they just changed the rules. I have plans, engineering, and all the contacts and sourcing for a 1200 sqft 2br/2ba DADU that I just built, and I've identified a property I think would be great. It's being remodeled by a RE investor that intends to flip it, but he seems to have slowed way down with the recent market drop. It wasn't showing sold online so I looked into the records and see this RE investor has recorded a deed of trust and given the owner about 50% of their purchase price for what I assume is the right to remodel and sell.

    It looks like I could add an ADU to the existing house and build a DADU with plenty of room to spare, I just don't know how to go about getting this property. From the workers I've talked to I know they're trying to do a really upscale remodel and get top dollar which I don't think can afford outright, but I'm interested in the loan/build/refinance examples I've seen. From that deed it looks like he can't have all that much into it yet, but I'm not sure how that works. It's vacant so it's costing someone money, the RE investor or actual owner I don't know. But I'm wondering if any of this makes them more motivated to offload it or if I could get a deal. Any advice would be appreciated, thanks!

    Very cool. What size properties are you targeting to add this large of an DADU to? Do you have any photos of your DADU that you are willing to share?

    We have plans for a 1500sq ft 4 bed / 3 bath that’s proven to be perfect size for STR and have been curious about building it as an “DADU” elsewhere on a large waterfront property in the Sound.

     The property in question is about 1/2 acre, maybe a tad less. In Snohomish County ADUs are limited to 1200sqft but you can build 2 (an AADU and DADU), King is 1000 and has owner-occupied requirements, in both counties garages are not part of the square footage limit. Not sure about other areas, often city requirements are even more stringent. PM and I'd be happy to send you some photos of my DADU design.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    Thanks for the update …what an amount do you figure you will need to complete this new plan ? 

    0Reply
  • David Benton
    OP
    Member since 2022 · 4 posts · 2 votes
    3y
    Quote from @Dave Skow:

    Thanks for the update …what an amount do you figure you will need to complete this new plan ? 

    I'm building the AADU myself for around $200k.

    The other property I have no idea, it's just been foreclosed and is pretty distressed, even after being half-remodeled. I know the flipper was hoping to get 1-1.2mil for it, but that's not happening now. Timing might not work out as it will take me most of this year to get my own property in order and income from the AADU.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @David Benton- thanks for clarification - how are you funding the 200K ? Do you have any needs/ questions regarding the new plan you have ? Do you have a HELOC in place on your present home ? if not - you might consider using a heloc to fund this project ( or part of the project ) - thanks again and good luck

    0Reply
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