All Forum Posts by: Akshat Jain

@James Sansangasakun Not yet. I am finishing up a couple of other projects and the ADU will be next. I will likely start the process in May.

@Zab Khan I will reach out once I have a permit. 

Welcome to BP Leslie! Great to see you here! I have ties to the Cleveland area too through my wife and have considered investing there. My research hasn't led me that far yet, but cash flow is easy to find, so are the properties. I lack street knowledge of the neighborhoods, so haven't purchased anything so far. Focusing locally for now. Let's catch up on REI next time we see each other.

Thanks everyone for the insights. There have been 2 different opinions, either go OOS or build an ADU, but I feel that buying IN the immediate area is pretty much ruled out. Personally, I do not have much knowledge about OOS investing, no target areas etc. So this will take some research before jumping in. For now I will stick to what I know so far and go ahead with the ADU plan. This will take a while but I will keep updating this thread with progress to have a log in case it helps anyone in the future.

Matt, I do not disagree with your analysis. In fact I'm glad to see a different perspective. I tried to run comps for a house with an ADU before replying but could not find a good comp fast enough. I am curious to know whether sinking 300k in the house will add 300k in value. I see duplexes in the area that are around 8-900k. If that is the value of the home after adding the ADU then I wonder if it's worth the investment. But here's the flip side: currently we live in a house that is way too big, and we pay way too much for it (>3k). We could be in a situation where our monthly effective payment would be ~1500, not 3200. So that in itself is more than 1500 less than our current expense. If I buy an OOS property, I'd rather spend 36k (20% down) than 180k, to minimize personal risk. I have not looked much into OOS, but feel that it may be more work than we can put in. BTW, have you invested OOS? Sounds like you have with success. Amit, I'm going to take a hard look at how much the value add is. 480k sounds great, but not sure if it's realistic for my area.

@Chris Mason, @Randy Chapman, @Arlen Chou, @Matt K.

Thanks all for your responses. 

Randy, yes Emeryville requires owner occupancy while doing an ADU. We will try for a variance and make a case for building a second unit (making it a duplex as opposed to SFH with ADU). If not, we stick with ADU. Are you aware of an instance where the City has made a stink about owner moving out after building an ADU? In our case, we will stay put for at least another 3, but just wondering. Selling when we move out may not be a bad idea if the price makes sense.

Arlen, that is a valid point. My goal is to get this completed by end of 2018, and then look into buying another property if the Bay Area market cools down/ I have more resources to buy. If not, then probably look to other markets nearby where I can buy. I am ok moving in to a 2-4 unit for 2-3 years. Looking into prefab as a solution for the construction portion to shorten the timeline. I will trust my professional ability to get through permitting without major delays. Long term goals of having 5 such properties in the next 10 years. You make a valid point of making a more robust business plan first, I have to work on that. 

Matt, I would be funding construction through a heloc,  with payments being interest only, and only when I draw on it. My estimates put me paying around 8-12k over a period of 1 year (interest only) for that loan, with let's say another 50-60 out of pocket. I will refinance after that, to pay off the heloc and end up paying less than what I do for my mortgage right now, considering the rental income. There may be opportunity to pull some cash out too, depending on how much the property appraises for, but not counting on it. So essentially out of pocket expense would be 60-75k which I should be able to recoup with the refinance. Also, I am not going to find a 150-200k property in the area I want to be in (Berkeley, Oakland Emeryville, Alameda, El Cerrito, Richmond annex). Not ready to go out of state yet, definitely not for just 1 property. What do you think?

Hello BP! 

I am a newbie in the real estate world, I wouldn't even call myself an investor yet. I am looking to get started in real estate and have been reading/ educating myself the last few months. My current situation is that I own a SFH in Emeryville, CA, bought about 2 years ago for around 600k. It was originally a 3/1 and we added another bathroom to make it a 3/2. After we are done remodeling areas that need repair (all scheduled for this year), the house will be worth around 760-800k per my conservative analysis.

Here is my dilemma: I have access to purchase another property upto 800k with conventional financing and an equity line of about 180-200k. I could either use that to purchase a new property or construct a secondary unit on my current lot. For a new property my goal is to purchase a 2-4 unit in the bay area, but most properties do not cash flow to the point I would like. I did look into building a secondary unit, and I would be able to secure the necessary approvals needed to do so. From a cost standpoint, for a 600 SF unit (that's the most allowed in my case) I am budgeting around 200-270k (300+ - 450/SF). I would move into this unit and rent out the entire 3/2 house, for about 3200-3500/mo. I also have some reserves to fund the construction above and beyond what the equity line would get me. Obviously I would refi after construction is complete and main house is rented out.

Seeking the community's opinion, buy another property in this hot market, or build one? 

+1 on Hi-Tech termite. They are professional, thorough and (most importantly) honest. In general have their sh*t together.

Daniel Gonzalez One thing I would like to point out about Oakland rent control laws is that for up to a 3-unit building, if you owner occupy, you can start raising rents after you have lived as owner in the building for one year. It is a less known law and many people are not aware of it. As for finding deals, they are scarce right now. Your best bet would be to find something off market. I personally would stay away from fruitvale, but you can check out havenscourt blvd (further east).