All Forum Posts by: Brian Larson

Back when I worked in residential property management, we locked in our leases for variable monthly periods.  We essentially created a lease matrix where ALL leases went MTM during the summer months.  Given that this was the busiest time of the year, it gave the management leverage to increase rents; since, if the tenant moved, we could typically turn the unit and re-rent it quickly.

The workload was a little crazy during those summer months but it helped to keep down our vacancy and push the rental rates on the property.

In answer to your question, I would never lower rent for a longer lease.  I doubt it will work to your advantage.  Also, I would never sign a lease longer than 1 year.  I follow these rules because I like to keep built-in flexibility to my process so I can easily issue rent increases and other rent term changes.

@Frank Wong - I like your idea of a short term lease to establish a "get to know you" period.  As you stated, hopefully the tenant that met all your screening requirements is a REAL winner but sometimes they aren't.  A good short term lease allows you the flexibility to remove them if there are issues.

@Patrick Shea - thanks for sharing your story. It sounds like it works well for your family.

@Jeffery Chang - good point. I saw that too but I am opting to build larger in SJ

@Todd Dexheimer - great article and great research. Thanks for sharing.

@David Greene - Thanks for your information and energy last night.  It's always inspiring.

@Nabil Suleiman - I agree with you.

@Kevin Lefeuvre - Also, as far as costs, it depends on multiple factors. For me, I'm budgeting about $300 per sqft foot in San Jose. I think this is a mid-range for the market to build an ADU above a detached 2 car garage.

@Sam Mueller - Is this a hypothetical scenario? Or do you have a property identified? If so, which market? The Bay Area is a big place and specifying might help you get some better advice from the local BP community.

@Jamie Lafollette - following because I would also like to know if there are any recommended lenders

Investment Info:

Single-family residence buy & hold investment.

Purchased an off-market SFH in downtown SJ. Currently working to design and build an ADU onsite.

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

Off-market listing

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

My agent found this home on an email thread being circulated within his brokerage.

How did you finance this deal?

Traditional Loan

How did you add value to the deal?

Building an ADU

Lessons learned? Challenges?

TBD

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Josh Anderson with Intero in the Palo Alto Office

@Richard Goore - I would love to hear more about any of your ADU projects. I think the business model you described above is the next great investment model in Sacramento and the Bay Area.

I am currently working to build an ADU at my downtown home in San Jose.