Maximizing your cashflow with ADUs a2z WHO WE ARE Seasoned - PowerPoint PPT Presentation

Maximizing your cashflow with ADUs a2z

WHO WE ARE • Seasoned team of real estate professionals • 50 years combined experience • Specializing in both owner occupied and investment properties • Familiar with recent trends and regulations • Diverse in multiple languages • Experience with ADUs from owning ourselves

OUTLINE • What is an ADU? Accessory Dwelling Unit • How this movement comes about • San Jose Guidelines • How you as Real Estate Agents and homeowners / investors can help solve the housing crisis (while earning a good return) • Rental Market why ADU is an excellent investment

WHAT IS AN ADU? • Accessory Dwelling Units (ADUs) are known by many names: • granny flats, • in-law units, • backyard cottages, • secondary units and more.  An ADU must have a kitchen and bathroom

4 TYPES OF ADU • Attached Unit to the house • Detached Unit to the house • Garage Conversion • Detached Garage Conversion

WHEN DID THE CALIFORNIA ENACT LAW? • State legislation that took effect January 1, 2017 gave California cities more flexibility and latitude for allowing homeowners to build ADUs. • Three separate bills were introduced and signed by Governor Brown; • SB 1069 (Wieckowski), • AB 2299 (Bloom) • AB 2406 (Thurmond). • Each of these land use bills make it easier than ever for homeowners to take advantage of this attractive opportunity.

CITY OF SAN JOSE AND ADU • The City of San Jose is one of the first city in the Bay Area to loosen its guidelines in response to regulations • In the following slides, we will go over the city of San Jose requirements for ADU • Each city have specifics requirements for ADU.

CITY OF SAN JOSE – ADU REQUIREMENTS • Zoning • ADU are Allowed in R-1, R-2, and R-M districts as well as Planned Development (PD) • Lot Size • Minimum Lot Size is 3000 Square feet • Maximum Floor Area Allowed

CITY OF SAN JOSE – ADU REQUIREMENTS • Kitchen • One kitchen is required. • Bathroom • Bathroom is required. Must include shower/tub. • Height of ADU • One-story – 18 feet • Two-story – 24 feet * if attached to main house, has to match main house • Parking – is required unless it’s exempted • Rear Yard Coverage • ADU, shed, and accessory structures cannot exceed 40%

RENTAL MARKET • Typical Rental Home in San Jose is approximately $3500 • A typical rental for a 1- bedroom ranges $1500- $2000 • A typical rental for a 2 – bedroom apartment is $2700.

WHY A2Z TINY HOMES & C21SOLDTEAM? • We provide a one-stop solution from planning, permitting, to construction • Our team is up to date on ADU’s city zoning, laws, and regulations • Our builders have been building in the bay area for about 20 years. • Each city has different regulations and you want a team that will take on this challenge for your client.

A2Z Steel ADU

WHY STEEL FRAME? • Steel buildings are more durable than wood, and more resistant to water damage. • Steel will not warp or expand like wood does, and it does not rot, so it will be less likely to attract fungus. • Termites and other insects who eat wood will also steer clear of a steel home. • Steel frames can withstand hurricane force winds, and be designed for seismic activity. • Metal is not flammable, which means the house will not give a fire more fuel, like a wooden home would do. • Steel house frames are also 25 percent lighter than wooden house frames.

A2Z MODEL 496

A2Z MODEL 180

ADDITIONAL INCOME FOR HOMEOWNERS Example : • A2Z Model 496 - $150,000 • Rental Market for 1 bedroom ADU - $1800 • $150,000 @ 4.5% for 30 years is approximately $925 per month • Positive cash flow of approximately $875 per month

HOW CAN YOU HELP • Help solve the housing crisis in the Bay Area • Investment opportunities for your clients • Work with your clients to get these ADU build • Incentive for you as Agent Partner with the right team!

FAQ? • Will my property taxes increase if I build an ADU? • Yes. Under the rules of Prop. 13, the Office of the County Assessor appraises new construction at fair market value when the improvements are complete, and the value of the new construction is added to the total assessed value of the property. • Can I build an ADU on a property where the SFH is a rental property? • Yes • May I rent the house and ADU to different parties? • Yes

FAQ? • Is an ADU required to have its own address? • Yes. An address will be assigned during the permit approval process • Is an ADU required to have separate utilites? • No. Utilities can be combined with the main residence or it can be separate.

WHAT ARE THE BENEFITS OF AN ADU? • ADUs are an affordable type of home to construct in California because they do not require paying for land, major new infrastructure, structured parking, or elevators. • ADUs can provide a source of income for homeowners. • ADUs allow extended families to be near one another while maintaining privacy . • ADUs can provide as much living space as many newly-built apartments and condominiums, and they’re suited well for couples, small families, friends, young people, and seniors. • ADUs give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care.

FAQ? • Why are A2Z Tiny Homes unit under 500 square feet? • When units are built above 500 square feet, the owners are subject to pay the school fees for their district. This cost can be higher than 3% of the square foot of the unit. • How long have A2Z contractors been building in the bay area? • A2Z contractors have been building for more than 15 years in the bay area.

Financing • We have Home equity line of credit contacts that can help you get a line of credit to finance your ADU in 30-60 days. Rates can be as low as prime – 1. Take cash out of your first loan because rates are at a unbelievable low. 3.25% for a 30 year fixed (3.38% APR), many lenders will go up to 75% of your homes value.

Rental Income Live Examples: [Charlie to add rental info or live example]

Airbnb example: [Charlie to add airbnb info or live example]

Sign up now by speaking with a team member that can help facilitate your needs. We have the forms available. c21soldteam.com/adu (for a copy of this presentation)