All Forum Posts by: Rick Albert

Thank you everyone!

Yes, it would be sectioning off a portion of the house.  I just wanted to see if anyone has experience in this and has insight (for example how easy it was, cost, etc).  Really the only thing that is new to the space is the kitchen since it was a large master before.

Thanks,

Rick

Hello Everyone!

I have a client who is interested in doing an Accessory Dwelling Unit within the existing footprint of a house.  It is actually already done we just want to complete it with permits.

I am familiar with garage conversions, but doing it within the existing footprint is new. It would be about 1,200 square feet, which is why the Jr. ADU option is out.

Because the utilities wouldn't be split, and it was originally what looks to be the master, the only new item is the kitchen.  I would imagine it would be pretty easy to get done but any and all guidance would be appreciated!

Best,

Rick

Hey Amro,

FHA loans are strictly for owner occupied. In this scenario, it cannot be done. Most lenders will want at least 20%-25% down. I have heard of programs with less down, but the points and interest rate make it unappealing.

Not sure on your financial situation and goals, but maybe buy as a primary residence and rent out the other rooms (house hack).  Do it for a year and if the numbers make sense, move on to the next one.  But at least this way you can put less down and get a better interest rate.  Of course every city has their own guidelines so make sure to do your homework.

Hope this helps!

-Rick

Good call.  Also keep in mind that for those that are partially renovated means you could allocate that money towards the down payment to make it more affordable on a month-to-month basis.

In my experience it would still have to be presented in case someone was willing to bid more.  That was the only thought I could think of.

Maybe there is a compromise to be made.  For example, find a duplex where one of the units was remodeled (or at least livable) and the other still needs some love.  This way you can immediately rent out done unit while the other is under construction.  The other thing to consider is finding a duplex that doesn't need any work at all.  There is nothing wrong with buying a place that is already nice.  Your time and money can be invested elsewhere and at least you are no longer renting.

Keep in mind house hacking means that someone pays part or all of your bills.  As long as it is equal to what you are paying in rent or less, it is a win as far as I'm concerned.

Hey Erik,

Are you sure you were at the right courthouse?  For Los Angeles County in CA, there are two locations where auctions are held.

The other thought that I have seen is the bank actually bids on the property to keep it instead of selling it off.  When that happens, it still goes through the bidding process with other potential bidders but maybe it is different where you are.

-Rick

@James Chu

Absolutely! Send me your contact info!

I know your intention is to BRRR it, but what if you submit an offer with an appraisal contingency? If it doesn't appraise, then you can attempt to renegotiate the price. The cost of the appraisal may be worth it.