All Forum Posts by: Rick Albert

Hey Everyone,

I'm an agent out of Los Angeles. I'm a 2x house hacker (once in my condo and now living in my ADU that we built while renting out the main house) and I've worked with a developer for over 10 years. Because the market is so saturated, I thought it would be interesting to hear what you all look for in an investor/house hacking friendly Realtor. I'm going to be doing a big push into 2021.

Thank you!

Rick

Maybe remind them that they still owe for that other half and starting in March you can take them to small claims for it.  Therefore their options are for you to take the remaining of the deposit towards payment or they will have their credit report damaged, making it difficult to rent elsewhere.

And yes, you have to provide receipts (which is a way for landlords to be held accountable).

Just echoing what others have said, if the zoning allows it, it will be much easier.  One of my developer clients tried splitting a lot in the Hollywood Hills and the neighbors stopped it before it could happen.  They don't want more density in their neighborhoods.  That same developer bought a R 1.5 zoned lot and building 5 single family homes (almost complete).  It is quite a process to do it.

The most I have seen appraiser give is $50,000 for a 2 bed ADU in the Valley. I have one client who owns three ADUs, worked with a developer who has flipped 3 ADU homes, plus other clients and I own one myself (I currently live in mine while renting out the main house). Appraisers just aren't on top of it quite yet. I would focus on the cash flow and go from there. Just make sure you design the ADU to maximize rent and privacy. Happy to chat further if you would.

A lot of people have posted on this so I apologize if it comes off as repetitive:

Converting the garage and not getting it permitted does run the risk of getting caught with the city.  The risk is generally low assuming no one rats you out.  That could include a disgruntled guest.

Look into permitting it into a "Recreation Room" instead if you want to avoid the classification as ADU. The downside to the rec room is that it is only for a half bath, no shower. You can explore options from there.

You can only utilize your property as an ADU for no more than 120 days out of the year (there are exceptions). You might be better off just keeping it as a traditional rental. Run the analysis for both scenarios, plus factoring in your time. I had clients run an Airbnb and it was practically a full time job for them (granted they had two units).

Not sure if you already own the property, but check to see if your area would even do well.  For example, I had clients in the Granada Hills area look into it and there appeared to be no demand.

Just some food for thought.  Best of luck!

Hey Everyone!

I'm on my second house hack here in Los Angeles, including having built an ADU (currently living in it) while renting out the main house. I put 10% down on my condo and did the FHA 203(k) loan for my house where we did an extensive remodel, addition, and converted the garage into the ADU.

Under $600K is getting to be pretty impossible in the valley without making sacrifices on location (such as busy streets, etc).  I have represented clients in the valley and nearby such as in Simi Valley.  I would be happy to sit down and discuss your goals and strategies.

I would actually start with meeting with a loan officer to see what you are qualified for.  Don't make assumptions and it can point you in the right direction.  Happy to refer if you would like.

Best,

Rick

In Los Angeles EVERY single wholesale deal I've received has never penciled out.  Wholesalers want to network and I'm happy to have the conversation but it just hasn't panned out.

I agree with @Will Barnard.  A developer I work with has flipped three homes with ADUs but some either took a while to sell or had appraisal issues.  It's why (at least from what I'm seeing), there are less flips happening with ADUs.  It's quite a disappointment considering the value it can bring to such an expensive market.

Something that isn't cash flow related directly but study the rental laws for each scenario.

For example, in Los Angeles, a duplex is subject to LA rent control. With a house and ADU, only the house is. This means more flexibility as a landlord. Plus with ADUs, you can generally be better located, which might command higher rents.

Best,

Rick

I would be careful with prefab ADUs. Keep in mind you have to factor in where the unit will be on the lot in order to create privacy and yard space (both of which are important for ADU tenants). I'm not knocking them as there are some great ones out there, I'm just saying to be aware.

For example, in my detached ADU (where the garage was down the driveway in the back), we did two sets of french doors and a window with built in shade for the front door. This way we can't see into the main house yard but we still get plenty of natural light.