All Forum Posts by: Matthew Forrest

@Tanner Shore In my opinion having equal payments (rent vs. mortgage) isn't automatic support for buying a house. There are a lot of hidden costs that the mortgage payment alone doesn't include (taxes, repairs, opportunity cost). You could also generate some income that can make buying look better (house hacking, renting storage space). There's a guy on instagram (@personalfinanceclub) that lives in San Diego and has some pretty good posts on owning vs renting. He mostly posts about index funds, but you can scroll through for the housing ones. 

You should do a side by side quantitative analysis of your buying and renting options.

@Derek Daun $8500 would be more than what I've seen other people pay for plans unless you're looking for something custom. A lot of the time the design firms have a couple of designs that they have had success with and recycling them. When I was building my ADU, the most difficult part was generating and approving plans. My biggest mistakes:

• -Not getting a recommendation/referral to confirm product and service quality and instead just going with the most available architect. Your guy may be available in this busy time for a reason.
• -Paying the architect 80% when the plans were submitted. Cities can be really picky about approving plans and there were several rounds of revisions after initial plan submission. I believe that me giving the architect too much up front was the reason it took seven months from initial submission to approval.
• -Not managing my architect's progress well. I allowed him to take more time on certain tasks than would be acceptable by industry standards

In general, the design and permitting process are a huge project schedule rick/uncertainty in the ADU process.If possible I would use an architect that has had plans approved for several ADUs in your specific city. Also going back and forth with plans to the city yourself can be time consuming and may be inefficient if the architect needs to make revisions. I think that's a task that should be handled by an architect or one of their staff.

@Adam Schatteman I'm sure there are agents that can help with advice on house hacking or help get you into the right property because they have the education, but I haven't been in contact with agents that have access to anything better than a MLS deal. My rationale for why this is the case is that there is a ferocious investor and retail appetite for properties so unless you're sourcing your own deals there will be intense competition and bidding wars.

I've just started getting on the buyer's list of wholesalers so I'll let you know how it goes. I'm also trying some direct to seller marketing to see if that can be successful to generate leads. The last property I bought was off the MLS with an agent.

Experience is the best teacher.

Every year since I got started looking at real estate in 2015, we have all heard this is a top, this is the peak, prices are going to crash, etc. In most markets, this was not the case so from my perspective forecasting the market cycle is not purely data driven. There are so many factors that influence asset prices that a bad economy or high unemployment may not even drive prices down. The government injected trillions on dollars into the economy and those dollars are not just going to disappear. I believe that it will go into the hand of people that value assets who will use their newly found money to buy more assets at whatever the market price is. Money is basically free, asset prices go higher.

I agree that investing now seems more difficult that 2013 was in hindsight, but in 2030 we may be saying how easy 2020 was and how buying was a no brainer. For me it is more risky to sit on the sidelines and watch the market go up without me (some FOMO, I'll admit it) while not getting the experiential education that I'll need down the line. I'm NOT advocating for betting your net worth on the market, but as long as you have a solid financial foundation the education of getting involved NOW will probably be more valuable than any money you lose (if you lose any at all). 
 

@R.J. Mazolewski Congratulations on getting/keeping your job in this tough environment. It sounds like you would benefit most from generating more savings. From a defensive standpoint, take a hard look at your current expenses and decide if they're really more important than the savings you could put towards your property! Offensively, consider a side hustle to generate more income. 

@Adam Schatteman Welcome to the best coast! I moved here from New York City thinking I would move back within two years, but here I am six years later. Now I'm trying to get the family to move out here instead. 

I haven't been successful in finding an agent that's inventor/ADU friendly, so I ended up focusing on educating myself. At the end of the day I feel that agents have a bad compensation incentive structure (they make the most money when you close at the highest price possible) so I wouldn't rely on an agent. In my opinion you would be better off looking for wholesalers to help you look for deals. If someone does know a good agent though, I would appreciate an introduction!

Good luck!

@Bruce P.

It's strange now that I think back on it, but I looked at this since I had tight seat depth requirements in my ADU. For some reason the one piece toilets (Glacier Bay or equivalent) seemed to be very popular. People would make comments like "wow it looks like a spaceship." I really don't get it, but I've never heard anyone comment on a toilet before, so there must be something to it...

@Larry Marshall

1) I did mine in 2019 so I don't have experience using the 2020 regulations.

2) The majority of R1 lots can accommodate an ADU in some fashion. Whether or not the lots you're looking at can accommodate the ADU you're looking to build is another question.

3) I agree with Derricks answer. If this is your first deal and you're looking to be conservative, the answer is no.

4) Cash, refis, and HELOCs seem most popular. Prefab companies offer their own financing.

5) Probably not

6) Probably yes

7) You're welcome!

@Gio Fuentes Owner/builder managed my project and the permits were definitely simple to pull! The rest of it was the tough part, but it was a great learning experience.

@Jeremy Pelle Invest in what you know! Personally I liked the gentleman's recommendation on $AMZN as well as the recommendations for house hacks and syndications if you want to be more passive.