All Forum Posts by: Nick Hedberg

@Cody J Leivas - I think there was an issue with your post.

@Dan H. - Those numbers sound fantastic for LA. The JADU is a great plan for the larger properties. How much are you estimating to convert a master into a separate unit? That's fantastic cashflow for LA and these changes will be profitable for investors that are the first to jump on board. How do you think the coronavirus will impact your market?

@Cody J Leivas - That sounds like a great plan. If you can do a garage conversion for $25k that's an insanely good conversion. Did you get several bids? I've heard $60 - $100k for most garage conversion but they can vary widely.

@Dan H. - This is an incredible invasive change and will have a large impact on many communities. I feel like many high end neighborhoods will be less impacted, but the lower priced neighborhoods will see a large impact over time. 

On the flip side California desperately needs more housing. The state rammed this down the throats of all local communities. This will help some communities and be a massive strain on others that down have the infrastructure to handle and increase in density. 

@Jon Schwartz - What are your plans with the tenants and the property?

I would recommend talking to a property manager or an attorney depending on what your plans are. If you plan on keeping the tenants a property manager can help screen them.

If you plan on buying out the tenants an attorney or someone that specializes in working with tenants. Any agent can help with either but an agent specializes in helping people buy or sell real estate. I would recommend you expand your team with additional people that can give you an opinion.

@Harry Burgos - Yes, these changes are specific to California.

Did they sell all of the properties? If you were hard money you should have been in 1st or 2nd position. In order for them to sell you would either have to be paid in full or your would have to accept a reduced principal amount in the terms of a short sale.

Did you invest as an equity investor in the company? Or was it a hard money loan on the property? If your loan was setup properly they can't just sell the property without paying off the liens. If you had an equity investment in the company, then you are in a more challenging situation. I would recommend an attorney.

Hey BPers,

Some MASSIVE ADU changes came into effect on January 1st, 2020 in regards to ADUs. You can now add a Junior ADU (JADU) in addition to an ADU which means you can legally convert a single family home into a property with 3 units. The new laws also relaxed parking restrictions, setback easements, approval times and added ADU potential for multi-family properties. The state is mandating these changes and is removing a large degree of freedom from local zoning departments.

What do you think and are you taking advantage of these new laws?

Highlights:

• A 500 square foot junior ADU is now permitted as long as it's attached to a detached ADU or the primary residence. This effectively allows you to convert a home zoned as single family into a triplex.
• ADUs can now be built on multifamily properties. You can convert garages and increase density up to 25%.
• Local permitting agency must act on all ADU applications within 60 days (vs. 120)
• HOAs and local CCRs cannot prevent you from building an ADU
• Strikes restriction on owner-applicant for ADUs until 2025
  
• No impact fees on ADUs under 750 SF.

I'm blown away with the breadth of these sweeping changes. Is anyone buying up multi-family properties with large garages?

This post is not intended as legal or zoning advice. Please consult your local zoning department.

@Phillip Kim - I would call LADWP and get their input. ADU rules changed significantly in January. They relaxed the easement rules but I am not sure if they apply in your case. LADWP is your best bet. Good luck and let us know what they say.

Hi @Miho Y.,

I live in Venice and do a ton of business in Venice. Venice is super hot right now and there are lots of investors, developers and agents looking for deals. Most homes get bombarded with letters from agents and investors saying they want to buy there house. Since he is renting a unit, this is a common way for investors to contact homeowners seeing if they are looking to sell a property. NOO (Non owner occupant) properties have a higher turnover rate then homes where the homeowner lives there. Plus on a rental ad he has to put his contact info which makes it easy for them to get a hold of him.

If you are renting a place you are going to get phone calls for people that want to buy the home, especially in a hot neighborhood. He should politely decline and ask if they know anyone looking to rent. I recommend he puts the property on Craigslist, HotPads, Westside Rentals, etc. for marketing. He needs to expect he will get these phone calls and he should know it's part of the game. If it's that big of a deal he should hire an agent or a property manager to rent it out for him.

Venice is a diverse area. Many rich people but Venice use to be a rough area. Most homeowners are blue collar people that work for a living. Even though its an expensive area they are just people. I wouldn't lose any sleep over people trying to force him to sell.

@Andre Taylor - Are you going to refi? What all did you rehab for the $90k?

I have been using Garcia Property Management and have had pretty good results. They are responsive and know what they are doing. A little on the slow side to turn units.