All Forum Posts by: Sebastian Marroquin

I have a great lender that can do DSCR loans or conventional loans anywhere. Reach out when ready!

Coming on here to share my experience planning, designing, permitting and the construction process for our 380 sq ft Garage Conversion ADU. This ADU will be a 1 bedroom and 1 bath unit with full kitchen and bathroom. I am a realtor in San Gabriel Valley in LA county. Our offices are in Pasadena,CA and I live in Claremont, CA. We have helped many clients purchase a primary home and rental property and have helped with the ADU process. There is a lot of information out there but seldom do I see everything in one place. From purchasing the property to planning the ADU to getting the permits and then going through the construction process.

The reason why we purchased this particular property was because I kept seeing on forums that you could not cash flow anywhere in CA and much less in LA County. I wanted to prove that theory wrong. So, we set out to find the right property. I found an Off Market property in Claremont when fixers were selling for $680k, we bought our home for $550k and got a $50k credit from the seller for some of the renovations. It took us about 2.5 months to renovate the entire property including all the old systems (HVAC, Plumbing, electrical and roof along with everything else). 

We started the permit process in Nov. of 2022 and finally received approvals to start the project in June of 2023. 

The architectural plans costs: $6k 

The city fees were a total of : $7,500 

We applied for a city grant and got approved : for $20k once we finish the foundation. (We will be getting that in the next 2 weeks). 

So far (1st week of work), we have finished the first part of the foundation (trenching, rebar and plumbing) And assuming we pass the inspection on Monday, we will be pouring concrete that day and will start framing on Tuesday (of the second work week). 

I will be sharing on here: 

. Existing property/ Lot and acquiring tenants for the rental 

. ADU requirements (city and LA county)

. Planning and permits with city (timelines) 

. Soft costs, city and impact fees, 

. Architect, engineer, title 24 for energy calculations

. Contractors, bids, and actual costs 

. Value of home and potential Value added by this project 

. anything else you have questions about! 

Address: 353 saint Bonaventure st. Claremont CA 91711 (check on Zillow if you like to see purchase etc ) 

(We are finishing the landscaping, driveway and ADU together)

Nice!congrats!  So what was the total spent in material and labor + permits? And how much are you renting out for? 

I finally received the approval for my conversion in Claremont, CA and started the project on Monday! So far so good! 

We did the trenching, rebar, and plumbing and have our first inspection on Monday! 

investingopp@gmail com 

send details please 

you could ask a realtor to use the MLS to see the trends in the last 10 years in a particular area

you could also ask a title rep to give you the same info. They have a lot of info by the way. and a realtor usually has a good relationship with their title rep. :) 

Rental meter . com 

Niche. com 

Zillow Rents 

Redfin 

MLS

Realtors, landlords and property managers 

get the average between all these sites: and get the expert advice from these people. 

In my complex : most people are renting their units for $1700 to $1850 

we are renting it for $2050 (renovated and looks good) most of the others are not 100% renovated... 

We don't get maintenance calls... almost at all... we have changed 1 lightbulb in 1.5 years : and spent $60 on an ac maintenance issue. 

and rent it for much more than other landlords... 

so, it is important to know the low, medium and high end rents for your area! 

 @Dan H. (maybe we are talking about the same things and actually agreeing here) :) and not just to go against you at all: this is meant to elaborate on the conversation not just to rebuttal you at all. I see Justin's point and he is right, just bc you can build it doesn't mean you should, right. The point that I was making and actually not taking sides at all, were that: 

1. One option is less costly, faster to get approved but could have a lower value at the end should they decide to sell. 

2. and other option, would be more costly, take longer, have more red tape from city but could have better higher value at the end. 

I was saying to explore both and do research on both: to make a better educated decision. 

I would go to 1 or 2 appraisers and get their opinion about it also. Which would cause the entire property to have more value at the end (1 unit + ADU) or (2 units).

From what I have seen in San Gabriel valley: and LA county when we sell properties: 2 units have shown to sell for more (accounting for the same square footage and bedroom and bathroom count). Plus, some (not all) but some investors are willing to pay more for a 2 unit property bc they can add more units (1 or 2 extra ADUs) assuming that the lot and property allows it. I would ask Justin: 

Why did you choose to go the ADU route? Are you keeping all units? is the ultimate goal in the future to sell them?

and if he did sell any of them and capture all of the potential gain : meaning he sold them for maximum value possible (same or more than going the 2 unit route) great! and I am more than willing to learn from his answers! :) 

Again: no ego here, and not meant to be an attack to your reply at all. Cheers 

The short: 

You have to bring something to the table: 

1. The Deal (good property with good numbers and good potential) usually off market. 

2. The Money (Hard money, private investors, HELOC on your personal home, qualify for a loan, or CASH)

3. The experience/ knowledge to put it all together 

* Right now: I am sorry to be blunt and hopefully you take my comment in stride and learn from it: You lack all 3. 

You can find deals on Zillow and or MLS (but every other investor can also... ) so, why do you think 1000 other investors have not made an offer on that property?

It's not always black and white and maybe that is a good deal, but based on scope of work or timeline, investors see the opportunity cost and choose to go elsewhere.

To recap : 

1. Find a good deal or 

2. Find the money or 

3. Learn the know how and put it all together 

Books, YouTube, mentors, partners 

 Adding a level will require much more engineering and will add to cost: so keep that in mind. 

* Now: for timeline: the time it will take for permit approvals will be the same for adding sq footage, adding a level or doing an ADU (new construction or conversion). In all cases the process will be the same: Zoning, plan check, and building and safety.

(Unless the property has more layers : like hillside… or raw land, or splitting lots etc 

Your costs: now that will be much different for each scenario. 

If you want to know actual time frame: you should see around your neighborhood and see who is doing heavy construction: and they should know. The city and building and safety themselves won’t give you accurate time frames… (you can still call building and safety and ask to speak to the 3 departments and get some guidelines and timing from them if you like). 

Also: reach out to a contractor on yelp in your area with great reviews and ask them the same questions : they should be able to answer 

I see people's point here... but I do think based on data, that a second unit will add way more value to a property than an ADU.

Things to consider : 

1. If you build another unit : the building requirements for the city will be greater: set backs will be different, parking needs, utilities... and maybe more... (maybe gas, electrical and sewer implications) : but and a big one: the overall property will be worth more (consider price per sq foot in your area or that area) if the price per sq ft on the sale or appraisal is say: example: $600 per sq ft: then the 1000 sq ft second unit will gain $600k in value for the property (the ADU won't )

2. If you build an ADU: you won't need a garage, sewer , electrical and gas could or will be attached to the main home... etc

Less hassle, but also less value. For the same reasons you mentioned above (not enough inventory for appraisers) and they just don't count an ADU as a "second unit" and when you go to sell it... or refinance they will see it as such.

If the thinking is to keep it forever as a rental: (which doubt it will happen :) as many people will traded for a better asset later), but lets assume that rare scenario.... then, do your numbers according to the rents the unit can bring in. and it will be more cost effective and a better return on investment from that perspective. 

Hope this helps