All Forum Posts by: Aneesh Nainani

@Matthew Forrest - thanks for your kind words.

I am building a single family home along with an ADU and a Junior ADU (JADU) in Castro Valley, CA and the county wants to impose a deed restriction which will require owner occupancy of the JADU/Main Dwelling Unit (MDU) per CA - Gov. Code Sec. 65852.22.(a)(2).

The code specifically says "

(a) Notwithstanding Section 65852.2, a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single-family residential zones. The ordinance may require a permit to be obtained for the creation of a junior accessory dwelling unit, and shall do all of the following:

(1) Limit the number of junior accessory dwelling units to one per residential lot zoned for single-family residences with a single-family residence built, or proposed to be built, on the lot.

(2) Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization.

Link to the code - https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV§ionNum=65852.22

They way the law is written - owner occupancy requirement should not apply if the property is owned by a land trust 

Am i interpreting it correctly and does anybody has experience doing this ? Can transfering the title to a land trust help overcome the owner occupancy requirement on JADU

Appraised for 1,050,000 after ADU addition.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $735,000
Cash invested: $290,000 (245,000 for the 1000 sq. ft ADU, 45,000 for rehab of the main dwelling unit)

1000 sq. ft detached ADU in Livermore - Both MDU and ADU are rentals

What made you interested in investing in this type of deal?

Sideyard for RV which turns out is ideal for side by side ADU

CA ADU Laws implemented in 2018

How did you find this deal and how did you negotiate it?

Pocket listing through agent

How did you finance this deal?

Conventional Mortgage with 20% down

How did you add value to the deal?

Added a 1000 sq. ft detached ADU

What was the outcome?

Both units are now rented. Was able to refinance. ~3000$/month net cash flow with ~12% cash on cash return

Lessons learned? Challenges?

In retrospective i would have added more living space for a 3BR/2BA ADU