Ep 22: ADUs Explained: Cost, Value, & What You Need to Know

[00:00:00] Speaker A: Welcome to AllView360 all things real Estate podcast. With your hosts Daniel Gutierrez and Shannon Dempsey, we explore real estate from every angle, giving you insights, tools and confidence to make smart decisions that support your future. It's time for a new perspective on property. Welcome to AllView360. Hello. Hi, Danan. Another podcast. We have a guest. This is our favorite. Today we're talking all things ADU with Mr. Chasen. Daniel, do you want to tell us about Chasen? [00:00:31] Speaker B: Yeah. So super excited about this one. Chasen is a longtime friend and real estate professional. Jason was in real estate, I mean, longer than I've been, but also super interesting, longer than most people given his age. Started out super young. But the purpose of this podcast here is everything ADUs. Chase has built several ADUs. Rented, managed, sold, I'm currently building one. Have done multiple in the past and different capacities and obviously manage a ton through all of you. But wanting to give people the real insight, like the real real of what it goes into for planning, building, operating, managing an ADU and a lot of stuff that no one talks about. So even before we started this, we just went off on a 20 minute [00:01:15] Speaker A: race geeking out over ADUs. [00:01:18] Speaker B: Yeah, before we even started recording. So super excited for this. I'll ask Jason to introduce himself because he will do a better job than I ever will given his background experience. But super excited to. [00:01:29] Speaker A: You did not give him this. [00:01:32] Speaker B: Tell us a little bit about yourself. [00:01:33] Speaker C: Well, thank you guys so much for having me on the pod, first and foremost. Yeah, I'm 41 years old, but I've been doing this 21 years. I'm actually in my 22nd year of doing real estate. I was 19 when I got licensed. I like to tell people that I started working on loan files when I was 14 years old. [00:01:48] Speaker A: Is that true? [00:01:49] Speaker C: Yeah, just as an admin. So I've been around the business a long, long time. I've seen different iterations of the market. I've seen the, you know, the development basically from, you know, single family residents to multifamily zoning to all of a sudden this new ADU concept which has completely rewritten the rules of what property ownership means specifically in the single family realm. And I've seen goods, bads and, and otherwise. So I'm happy to share it. I'm happy to be here. [00:02:16] Speaker A: So we're excited. [00:02:18] Speaker B: We're super excited for it. We have some of the topics that we really want to touch on and give our viewers and listeners the information that they want need. Have been asking for but just letting the convers talking about the. Was it the good, bad and ugly of ADUs? So I think Jason, what was the phrase that you said? [00:02:38] Speaker C: The saying that comes to mind with, with specifics to adus is just because you can doesn't mean you should. And it's not a one size fits all program. It's not, oh, I've got this property, therefore let's maximize, you know, the potential to develop it. But the state of California has come out with an ADU handbook which I would recommend anybody that's considering it. The benefits of the handbook is it kind of gives you the overarching theme of is my property a fit? What can I do? What are the development restrictions? And it's meant to be useful more specifically when there's disputes with regards to what you want to do with your house and what a city can actually require you to do. So I've run into that because there's permitting processes, there's zoning processes, you know, there's a lot to it. And so I do recommend speaking to somebody who's actually done one or is a professional. I'm happy to be that person for you. If not, talk to a contractor that's been through the development process, talk to an architect that's been through the development process and you can go there. I've seen that there's a lot of companies out there that you prefab ADUs and people think, well that's just a matter of giving them a check. And then the ADU shows up on my house and it's not. The city still has the right to review your plans, your permits, all of those things. [00:03:55] Speaker A: In Orange county, do you guys have, are there zip codes that have the pre approved ADU plans that you walk in and walk out the door? [00:04:02] Speaker C: As far as I know, yes. I think Garden Grove is one of them. But to be candid, I've only done custom build. I've never done one of these prefabs. I do know people that have actually applied manufactured housing as ADUs. You know, where they take an actual like a trailer based, you know, I guess, you know, home built in a factory and put that onto, onto their lot. [00:04:24] Speaker A: So I know we have good amount of zip codes here in San Diego. It's literally go to the planning department and it's not necessarily prefab, but it's the full set of plans and you have like three options. I think Encinitas is one of them. And then you give it to your. [00:04:37] Speaker B: But it's still not that easy Throw a baby. [00:04:41] Speaker C: I can tell you. Napa county does so, so I've done it, I've done it in Napa Valley as well. And Napa county has pre approved plans that you can go in there. There's three plan sets from the ones that I reviewed and my personal opinion on those is maybe if you are in a crunch for time and you need this and that, maybe there's some extenuating circumstance where you have a ill family member and you need to make it happen fast. Sure, go for it. Maybe it'll save you a little bit of time in the review process. But it still needs to get fabricated, still needs to get built. You still need to put a permanent foundation down. There's field inspections that need to happen. It's, it's not overnight. [00:05:16] Speaker B: So let's talk about that. I think the pre approved permits, it's not making it really all that much easier. That's going to save you on the, you know, architecture, engineering side and a little bit on the plan check. But after that, you're still having to go through that whole process. So it's shaving off 10% of the time maybe, but it's by no means a G code. [00:05:34] Speaker C: I would tell you maximum you're going to save on that is six weeks, which is basic, which is depending on your city or municipality design review. [00:05:42] Speaker B: So design reviews, some cities are much worse than that. [00:05:45] Speaker C: Certainly. They certainly are. I mean, you know, some are, some are three months. You know, I mean, it really depends [00:05:49] Speaker B: on where you're at, but it's not a ton. But then also too, you're trying to put sometimes a, you know, square box into a round peg. When fitting in one of those pre approved plans into your lot, your structure, your building. [00:06:01] Speaker C: I'll give you a perfect example of that is the Napa project that I did is it's a single loaded driveway. And so if you were to buy a prefab, you know, adu, there's no way to get it to the back of the yard. Oh, you know, you don't have the width in the, the width of the driveway is 10ft. The prefab is, you know, it's getting everything in. Yeah, yeah, yeah. [00:06:21] Speaker B: Do you not own a helicopter? [00:06:22] Speaker C: Yeah, yeah, exactly. You crane it over. Some people would crane it over. I mean, that's an actual, you know, that's an actual development operation, you know, option. But again now we've complicated the, you know, arranging for that to happen. So, you know, my, my opinion on that is, you know, there's different strokes for different folks. And if you're super cost sensitive, if you're super time sensitive and your city offers one of the pre approved plans. Sure, why not? You know, but you know, there's so many more options than that. [00:06:51] Speaker B: Well, before we go there, kind of let's take a step back. Like what is an adu? What's been the progression of an adu? You know, accessory dwelling unit, Weird word. It is what it is. We all know it as adu. Now, Jason, can you tell us a little about the origin of it? You've been involved in these quite a long time. So going back just from the beginning to where we're at now and what [00:07:10] Speaker A: made you so passionate about ADUs? [00:07:13] Speaker C: I'm the, I'm an ADU pioneer, let me tell you. [00:07:16] Speaker A: When did that become your identity? Tell me. [00:07:18] Speaker C: Okay, so back in the day, and I'm able to say that at this point in my life, but back in the day, if you wanted to be a multifamily investor, you had to look at 2 to 4 units or 5 units or greater. 5 units or greater were commercially zoned. 2 to 4 units were multifamily zones. They were all apartment style. And cities established zoning codes to where those properties could be built. And then in a 2016, we started hearing this term Accessory Dwelling Unit, ADU. Prior to that it used to be accessory structures. And what people would do is they would get the permitting as an accessory structure and then they would bootleg it after the fact without permits and then put in plumbing and you know, and then have somebody living in the backyard, but they were unpermitted. So that's what it was prior to 2017. This is state of California, by the way. I can't speak outside of that, but in the state of California, 2017 was the first ADU ordinance to pass. So my wife and I in 2016, December, closed escrow on our first one of these because it had a detached two car garage with a unit above it that was, you know, it was, they would say grandfathered in, where the square footage was there, but it wasn't on the books as a separate unit to be rented. But I knew that this ad, these ADU laws were coming down the pipe. And sure enough, 2017 happened. It actually took for a full 12 months before we were allowed to get the permits back then because they, the city that we did that one in had not adopted their own ADU ordinance. The state had approved the law, but the cities and the planning departments and building departments, they didn't know what the law said they, you know, so we would put together our application saying we're going to, you know, turn this into a unit, we need an address, we need a meter, you know, we need all these things. They would say we'll have to get back to you. It also originated that all ADUs you had to pay fees. So the state of California since updated that to say if you build something that's 750 square feet or less and detached in Adu, they waive the development impact fees, that cities are not allowed to collect fees on you for that. If you exceed 750 square feet then, then you know, they'll, they'll charge the development fees. [00:09:34] Speaker B: So I have a love hate relationship with that and like hate paying those fees. But when you look at what it a new construction sells for on a per square foot basis, like just pay the fees, bite the bullet, you'll get your money on the back end. [00:09:47] Speaker C: And in high cost markets, you're absolutely right. When, you know, when, when you're in a retail market like Newport beach where it's $1,000 a square foot and up to buy something, if you can construct it for less than great, less than that, then great. But if you look at Riverside county where you know, I'll give you an example of something that I've seen recently. But up in Big Bear Lake arrowhead areas, there's a lot of vacant land and people or, or large lots, they buy it, they want to put up an ADU there and they think okay, well I'll go build the ADU at $350, $300 a square foot because you got to pay a lot to get all the materials up to the mountains. [00:10:21] Speaker B: Yeah. [00:10:21] Speaker C: You know, and then the retail market for it is only $200 a square foot for the ADU, in which case that math, you know, is less efficient. So you know, those are the factors that when considering an ADU you need to be, you know, there's financial calculations and then there's non financial calculations such as, you know, family considerations and in laws and then all of that good stuff. I can get into that. [00:10:44] Speaker A: So when you find, when you got your permit for your ADU above your garage, what did you do then? [00:10:50] Speaker C: At the time I was living in the front house. So this was like the origin of house hacking, if you're familiar with that term. But it was basically, I knew for a fact that we were buying this property. We were, my wife and I were going to live in the front house. We were going to do the adu. And we were doing it for the purposes of creating rental income to offset our mortgage. So after getting the ADU developed, our mortgage was like, I think it's $3,200 a month, which sounds very low. It was, you know, it was high at the time, believe it or not, but it's $3,200 a month. But then once the ADU was done, we were able to rent out the ADU for, I think, 1500 originally. But our mortgage to own a Property was only $1700 a month net. And it was a game changer for us that we were really comfortable. We were able to, you know, save a lot more money going. And so within, you know, I think it was two and a half years later we had bought our next one in Costa Mesa. You know, I think that there's a lot of people that are looking for solutions to how do I get my bills down. And if some people inherited properties, some people, their parents are. Get reaching retirement age. If you're in the boomer category of 65 to 75 and your children own a single family property, the idea of combining households is this is worth it. I get a lot of these phone calls, and we provide the financing to construct this, you know, to. To construct the ADUs. That's part of my business model, is people will come to me and say, hey, we, you know, my mom, you know, is, you know, needs care at this point. She can't live alone. We say, not a problem. We'll get you, you know, we'll get you the financing. You know, we give us your plans together. We can give you construction financing. If there's not enough equity in the home, if there is enough equity in the home, we get you an equity line or just a, you know, regular second mortgage. So there's a lot of options there. But to answer your question, the intention of doing the first day to you was to offset my mortgage payment, which worked out, you know, brilliantly for us. And we still own and retain that property today, with rents going up over time. Our mortgage is still 30 200amonth. And I think that one brings in like 5,800 gross, something like that now. But it's been. That's been a godsend. I don't. I don't know that we would ever sell it. It's sentimental to us, but just the, you know, just the positive rental income that has come out of that has been, you know, very, very big for my wife and I. [00:13:07] Speaker A: What was your Napa project? I saw it unfold on The Instagram. And it was awesome. But what, why Napa? What happened there? [00:13:14] Speaker C: Napa's. I mean, this has got to be, you know, fourth or fifth one at this point. But we, we like wine, but you know, it's our happy place. We love going up there. You know, we would go minimum two times a year anyways. And we weren't necessarily in the market for it. But as with most vacations you're driving around, you're like, I wonder how much that house is. [00:13:37] Speaker A: Because that one was a doozy. [00:13:39] Speaker C: Yeah, that one was really ugly. I mean, our model is literally the uglier the better. And we take everything down to the sticks. We rip everything out, all of the furnishings, all of the drywall, everything. We get it down to the framing, we rip out all of the plumbing and electrical. Typically because we have a penchant for historical homes. That's kind of like our, our niche. We just love old architecture and old stylings. And so the Napa project was, it was 1930, no 1929 Craftsman in the front and had a detached two car garage plus a 500 square foot workshop in the back. And our first house, the one that I already mentioned, was a 1930 California cottage style property with a detached two car garage and a 500 square foot unit above it. So I went to my wife and I was like, this is like rinse and repeat. I. This, you know, we. I would love to have a house up here. I would love to have this for retirement. But that market is very expensive. You know, the, the front house is 1260 square feet. And the back house that the ADU that we made, we made it 705 square feet. When you add the two together, that's still under 2000 square feet. But it appraised for 1.6 to 5 million. No, you know, that's, that's in the [00:14:52] Speaker A: condition it was in. [00:14:53] Speaker C: No, not in the condition, you know, but, but anyways, we found that project, we saw it, we weren't sure if we could make it a reality. We offered, they rejected our offer. Then they accepted somebody else's offer. That person backed out and they came back to us, you know, and so we were able to get it at a number where I was like, I think we can make this project happen. But if you really want to get into the pitfalls of it, like we had a construction loan for that. We had budgeted somewhere between 350 and 400,000 for the total project. And due to the tastes of myself and my wife, you know, we spent closer to 600, you know, 600 and change, I should say total to make it happen. But one of the reasons why that happened was the labor in that area is astronomical. We have a crew in Orange county that's done a bunch of these for us. And it's really, I love my guys, they are exceptionally good at it. My architect is a plus. My framers are a plus. You know, my tile and finishing guys, I, you know, I think are excellent. But this was, you know, it's a hour and a half plane ride or an eight hour drive. And so we were able to get two of my guys to go up there live on site in the garage while they built this. You know, it was, you know, but had they not done that, how'd you make that happen? Because they're the best. [00:16:09] Speaker B: Lots of wine. [00:16:10] Speaker C: Yeah, yeah. Bribery with good food and wine. Yeah, we eventually put them up in Airbnbs and all the good, all that good stuff. But, but like, I'll give you an example. So the electrical on that project, you know, I, we've rewired homes that are 11, 1200 square feet. And you know, it's typically for us anywhere between 12 and $18,000. So my electric. So before getting the, you know, knowing what that cost is, we go and get bids up in Napa for the electrical. And our bids came in at 33,000, 40,000, $100,000 to rewire this property. And I just like, you know, I, I just thought, why would this guy waste his time? But the conclusion I came to is, is that the, the labor up there is much more scarce. They also have as many projects as they want. We got multiple people tell us we can get you, we can get to you in nine months, you know, and, and they also suffer from Silicon Valley where there's people where it's like, I don't really care, just do it. Yeah. You know, just here's, you know, the money is not the factor there. Right. And so somebody is going to pay that electrician 100 grand to do their house. I guarantee it. And which is why he knows he's just throwing that number out there, because eventually he'll get it and he'll do one or two jobs a year and he's done. [00:17:22] Speaker A: Yeah. [00:17:22] Speaker B: Yeah. [00:17:23] Speaker C: You know, which is wild. But these are, these are pitfalls, right? This, these are, this is the, this is the ugly side of it. So long story short is I from down in Orange county to drive up there and do that rewiring, but that was, it was super challenging getting it done. That was super taxing on me. I don't know that I'll do another one that far away. I think I'm like, I would cap it to, you know, hour drive time or, or less for myself personally, and I've done many, many, many of these. And you know, if you're a contractor and you're doing it for yourself and you've got all the guys, maybe a different story. But I'm not, you know, I mean, we're, we're investors. I'm hands on. I've done owner builder on every single one of these, you know, and I, and I bring in the subs and I hire all the people. But it's, you know, these things are challenging. There's, you know, I, it requires a certain level of expertise to do this. Well, let me put it that way. [00:18:11] Speaker B: It's not like it is in the TV shows. Long story short. Right? [00:18:15] Speaker C: No, certainly not. Yeah. And for the people that do the TV shows, I, you know, I went to college with a friend that has their own HDTV show and you know, in 30 minutes they make a lot happen, that's for sure. [00:18:26] Speaker B: For a lot less money than it actually costs. [00:18:29] Speaker C: Yeah, I don't, I don't know how they pencil that out. You know, my understanding is I think they give allocations to the remodel budget to make it look the way that it needs to. [00:18:36] Speaker B: But I had a friend of mine who was one of the regional directors for floor and decor and a few of the Orange county based HGTV shows would go to him and say, hey, we want you to give us all the material for free. And we're going to say, we got it from you, but it's actually free. Yeah. And they did. And yeah, the, the pricing is not at all even close to reality. Yeah. And they got it for free. Not even for what they're claiming they paid for it. But yeah, the pricing on materials is far higher than what you see in these shows. [00:19:07] Speaker C: You're bringing up a really good point, which is when you're contracting for these ADUs and if you're using a contractor that's not experienced in adus, how you do that contract matters. I always do my materials plus labor, and I only sign labor with the contractors because I don't want them. You know, I have a certain expectation of how it's going to look, what that quality is going to be, and I want to regulate what that, what those materials are. If they think they can get me a discount if they buy through them, great. Happy to. But that's going to be outside of the contract. I specifically limit it to labor only. I also think that there's benefits within that contract with who you hire to build yours to have time limitations because certain construction they'll take on 10, 80 use. Certain, certain contractors will take on 10, 80 years at a time. And guess what? Your ad, you're not going to be done for 12 months to 24 months of build post that. [00:19:56] Speaker A: Is that why you have to handle it differently? Because they usually have a larger amount of projects or why is it different [00:20:02] Speaker B: than it's construction in general? Contractors are trying to take on as many projects as they can as opposed to just saying, hey, no, I don't have time. You know, wait six months. But people don't wait. So then they just say yes to everything they overload. They don't have the manpower to actually do the project. And you're sit. They're waiting and that's when you see the contractors not showing up for, you know, weeks at a time or one guy will show up for a few hours and that's the only work that was done all week. That's I think unfortunately part of the course in construction in general that that's how they're. [00:20:31] Speaker C: That's the only way their business model makes sense is they need to sign more contracts than they have the labor for is that's where the margin comes from is, you know, if they get three deals that they can complete in 12 months but the, you know, one, one, one deal will cover the salaries of all their guys and the other, the other two is, you know, as we finish it, that's where our profit margins are going to come. They can't simply make, you know, ends meet on one project. [00:20:55] Speaker B: So I don't know if I fully, I don't know if I fully agree with that because there is a model where it does work. They just have to charge a certain amount and also be efficient and effective. Unfortunately, a lot of people who are highly skilled in the trades aren't highly skilled in business. And that's where you have a lot of that disconnect. [00:21:12] Speaker C: That's fair. That, that's fair. Yeah, yeah, I think I, you know, the reason for bringing it up is you should have an idea of how many projects your contractor is working on before you sign that and what and have an expectation of how long is it going to take you to build this adu. And that should be written down in [00:21:29] Speaker B: writing and progress payments. So pay based upon what's actually been completed, not just car blanche however many thousands a week or a day or whatever it is, only pay for what's been completed. [00:21:42] Speaker A: Are you running ADU builds for other people, Jason? [00:21:45] Speaker C: I have, yeah, certainly, you know, I built them for friends and family. You know, my parents are at retirement age. You know, they, you know, we've done a couple of them, you know, for them. My mother in law did one for her. So it's, I'm clearly an advocate of it and just for conversation's sake, you know, my mother in law's adu. She was kind of, you know, second up on the list when she did hers. Perfect property for it. Corner lot, detached adu. But the construction cost at the time I think came in right around $209,000. And it's presently rented for 2,500amonth as a one bedroom, one bath. So 2,500amonth times 12 months is 30. Was that 30,000 somewhere around there, you know, but let's call it 30,000 a year. $30,000 a year for $200,000 invested is what, 15% cash on insane return. That's unbelievable. Like that's, you know. Yeah, that's beyond a no brainer. So you know, and, and for her that's, you know, it basically pays for her entire mortgage. [00:22:44] Speaker A: So that's awesome. [00:22:45] Speaker C: It's a good situation to be where, you know, wh. By the time she's, you know, turned 60. Not that she's 60, she's 29. Yeah. But you know, she's got, she got a mortgage covered, she's good to go. [00:22:56] Speaker A: That's awesome. [00:22:57] Speaker C: Hang out. And you know, for my parents it was a similar situation where they had a condo that was only yielding like, let's call it 2800 gross, but it had 400,000 or 500,000 in equity in it. We 1031 exchange the condo into a single family property, built the ADU on top of it and now that property grosses 7000 with a mortgage of like 2800 bucks or something. [00:23:22] Speaker A: Just telling everyone, you're welcome. [00:23:24] Speaker C: I like helping people. [00:23:25] Speaker A: I know, yeah, you're like, that's awesome. [00:23:27] Speaker C: Yeah. But so it is a game changer and it's financially a game changer. But I'm not answering the question like who should do this? I mean it's not everyone should do this. Number one is if you are averse to problems, this is not the best, this is not the best way to go. But if you are very interested in creating a solution where it's retirement income on an existing asset, a plus if you're saying, okay, my mother is, you know, or father or whoever needs to. You can't live alone anymore. Let's build this on my property and let's rent out their property. This is a great solution for that. I cannot tell you how many people come to me and they're like, well, my house is owned free and clear, but I am out of money. I have no cash and no income and I live on Social Security. But I've got a $1.8 million property free and clear. And I'm like, we can fix this. [00:24:14] Speaker A: We can make this work. [00:24:15] Speaker C: Yeah, we can make this work. Right? You know, I have a galaxy Huntington Beach, $2 million property, like maybe more, half a, you know, half a mile from the ocean, owned free and clear. But her retirement income is tied to a six unit in Long Beach. And that six unit is, because it's commercial, is about to adjust the interest rates, about to adjust. And so what do you do? It's going to adjust, the rate's going to go up, you're going to lose your cash flow. We got to come up with a new solution. And, and my, my first thought immediately [00:24:44] Speaker A: was like, do you just drive around and see like ideal ADU lots and [00:24:49] Speaker C: just, oh man, I, yeah, I just bounce around. It's really sick. If I had an unlimited amount of money, man, it would be, it would be fun everywhere. [00:24:58] Speaker B: But to your point right now, building an ADU is sometimes the only way to actually get a positive return in real estate, given how high land value is, how expensive construction is, how high mortgage rates are to go buy, deploy capital, buy a new property. A lot of times you're not cash flowing, not even close to cash flowing. But if you have an existing property you could build at a low dollar per square foot, rent it out. That's one of the few strategies that actually produces a positive ROI in today's market, especially in Southern California. [00:25:29] Speaker C: That's correct. 100% true. I can tell you that the majority of multifamily properties, and this doesn't, this is anything with two units and up let, you are 30 to 40% down payment for break even cash flow, best case scenario, you know, and so there's a much better way to do this, which I do advocate for, but it's by the single family that you live in, build the ADU with the remainder of it. Now you have a multifamily property, you are obligated by the lender to live in it for one year for owner occupancy purposes to finance it. And after that year, move on out. My wife and I, that is. Well, sorry, go ahead. [00:26:02] Speaker B: That is not for everyone because you do become a landlord and you become a tenant and you're living next door to your tenant. A lot of people don't fully acknowledge that. And one of the things that we were talking about before, before, you know, starting is once you add an ADU to a single family home, the value, the rental value of that single family home drops. And as you said, a cannibalization, which is the perfect word. Let's say you're renting that home out for $5,000 a month prior to putting the ADU on there. You, you on, you might get what, let's say $2,000 for ADU. That single family home is not renting for $5,000 anymore. [00:26:41] Speaker A: That would be on a smaller lot. Right. Like when they're close together, I mean, [00:26:45] Speaker B: depending, sometimes even on large lots, they're built to only get access one way. If you have a alley, for instance, and you have like back access, you're putting an ADU on top of a garage maybe. But at the end of the day, you're cannibalizing some of that revenue of the initial home. Because people pay premium for single family homes. So they don't have neighbors, they have the whole lot. They don't have to share with any, anyone. Once you premium. [00:27:12] Speaker A: Yeah. For the adu. [00:27:13] Speaker B: Yeah. Once you add any to you, that rental value drops. [00:27:15] Speaker A: I have, yeah, I have one. Last year we were having a hard time selling. It was kind of a tougher property. It was a quarter acre, but sloped, all that good stuff. We did a price reduction relist after doing some work. And he said, hey, I was going to put an ADU above the garage here. That was my next step. Can we advertise potential adu? I'm like, okay, we advertised potential adu. It was showing after showing after showing of people trying to figure out where can we put this adu? That particular scenario. Building it above the garage was not working for a lot of those people, but I was shocked at how many. And it was a lot of people our general age that were, I think, thinking ahead for their parents or thinking ahead for how can I, yeah, offset my mortgage. I did not know there was that much of a demand or that people were that in tune with this even being an option. And then I took a listing. So that one sold two streets over and it's a flat acre with an RV kind of parking situation. That would be a separate driveway. And so all Day I'm gonna figure out what ADU situation can happen. I'm gonna tell people to listen to this podcast and chase in. But I think it's gonna have a really big result just because it does have that potential, whether it's now or you know, 10 years from now when your parents are older or whatever it might be. But that buyer pool was way more significant than I had realized. [00:28:32] Speaker B: And adus, as time goes on, it's just getting easier and easier in a lot of respects. In the past, you know, you used to have a certain amount of parking requirements, certain amount of parking for each unit now and then for a while it was if you were next to any public transit, that reduced. Now I think it's like nearly nothing. If you're by any public transit, it is literally nothing. And now people are putting Jason to your point. One of my neighbors, it was zoned R2. So it means you could put two properties on this parcel. Fairly large. Well, somewhat it's I think right around 6,500ft lot they put two single family homes for the R2 and then they put detached ADUs and then attached junior ADU. So you took a single family home and turned it into six units. The construction itself is questionable. They've been at it for four years. We see the people working. It's rough in some areas. Eventually they'll finish it. But yeah, you took a single family home and turn it into six units in a very residential neighborhood. [00:29:36] Speaker C: Yep. You're bringing up really huge points here. Which number one is, is this goes back to the first thing I said, which is just because you can doesn't mean you should. Number two is, is the cannibalization. You know, not only do you cannibalize your own rents by adding additional units, you know, but on resale value, one of the things that I've had to be very careful about when in selecting ours is I want an area that has multi family comps for upon resale. Okay. So any residential, you know, the farther you know or anytime. I'll give an example. Irvine. Okay. Irvine is master planned. Everything looks the exact same. There is no multifamily. Okay. So to do an ADU in Irvine, in my opinion is a little bit more challenging because you know, depending on what you know, the size of the lots are, they're all very small. But you're not going to have comps to get to exit to give value. And I can tell you these appraisers are not that skilled at this. [00:30:33] Speaker A: I was going to say what How. What are you seeing with the appraisal process with adus? Is it. It's not just square footage, right? It. [00:30:41] Speaker C: No. So I'll tell you. You want all the secrets. You want the secrets? [00:30:46] Speaker A: Yes, always. [00:30:47] Speaker C: Okay, so when I first started doing these, right, I, I had an appraiser who basically valued my adu at like $80,000, the very first one. And he gave me the construction value cost of it. And I said, so the property that's bringing in $20,000 a year is. You're going to give me 80,000 in value. [00:31:08] Speaker A: He loved you. [00:31:09] Speaker C: I said, that's. There's no way I'm like that. You know that as a cap rate, that's a 25% cap. Okay. So if you know what that means, that's a 25 cap property. I said, absolutely not this amazing. I said, you are not close, sir. You have completely missed the mark, you know, and that's okay, you know, you know, we're all, we were all learning at that point, but sounds like you were schooling. Hopefully, you know, hopefully we got educated there. But, you know, but it used to be that Fannie and Freddie Mac, who are, you know, they fund 70% of every loan origination in the nation, would not give you rental income value in the financing. So that was a problem when you'd go to sell it because you'd say, oh, well, I'm getting $2,000 a month in rent. And they'd say, tough luck, you know, you can't count it. So that is, that's been updated, that's been changed. And so it's come a long way. But the, the appraisers also used to be restricted to ADUs that were attached they could give value to, but if they were detached, nope, can't give value to. [00:32:07] Speaker A: How does that even make sense? [00:32:09] Speaker C: There was all these. Nobody knew what to do. Okay, so this is my experience from 2017 through 2020 and Covid. And then in 2020, the state of California made massive revisions and they basically just dropped the gavel on all of these municipalities and said, you're approving everything. Deal with it. Right? So the ad ordinances got completely ripped open in 2020 because of COVID It was emergency statutes everywhere. Everything's getting thrown through legislatively at the state level. [00:32:41] Speaker A: You were just in your house, like so happy. Just. Yeah. [00:32:44] Speaker C: Woo. You know, fortunately, you know, when you, when you know things, when you learn things and you can, you see laws changing, you can get yourself ahead and you can position. Okay, but what happened is, you know, that's when they started allowing the JADU, the detached ADUs, the no fees for ADUs under 750 square feet. The two ADUs per R2 zoning is 182:1. One detached ADU plus one JAUD. That's how you go from a single family on an R2 lot to six units. Now. [00:33:15] Speaker A: What's the difference? What's the difference between an adu and a jadu, which means junior adu, right? [00:33:20] Speaker C: Yep. So junior adu is attached to the main structure, 500 square feet or less. It can have its separate address, separate meters or not separate meters, but it is attached to the primary structure of 500 square feet or less. [00:33:33] Speaker A: Not of the builders. [00:33:34] Speaker B: I've seen a lot of those people turning their garages into junior adus or [00:33:37] Speaker A: like what's the next gen housing? Is that what they're calling it? Like Lennar and. Yeah, kind of out in Riverside county there, that's a. There's a lot of these big single family homes with the attached single bedroom, they call it. [00:33:52] Speaker C: Yeah, yeah. These are garage conversions primarily because that's that standard garage is 20 by 20, which is 400 square feet. That's where this came from. I personally, I'm. I am not. And I'm going to get in trouble here, but I just, you know, I'm all for honesty and transparency. [00:34:09] Speaker A: We like getting in trouble. [00:34:11] Speaker C: I'm not a huge advocate for garage conversions. Sometimes it's all you can afford and I get it. But I'm big in preserving off street parking. I have seen the value in that in renting. When you go to rent out these properties, off street parking matters. Okay. When you don't have the off street parking, you don't get as much on the rents. [00:34:32] Speaker B: Some things there that we always run into issues with is when people like get super creative and build out all of these like adus and junior adus. It's like, where do you park, where do you do laundry, how do you get in, how do you get out? And a lot of times you have to like jumble so many random things together to put that much density into one of these lots that it doesn't work. Like, I've walked into some super, super funky builds where they've turned a single family home into like four units. I remember one of them, you pretty much had to like walk. Like it was a shared entryway into a single family home that went two ways. You went right into like the lower unit. You went left up a staircase into an ADU to the junior adu. That was above and then behind, they had a detached ADU that was detached garage prior. And like you walk around and like the infrastructure, like the electrical was all tied together in certain aspects, was separated in others. The gas, the water, like it was a total disaster. [00:35:32] Speaker A: I'm just thinking like a garage conversion. You're getting rid of your garage, which, it's a deal breaker for a lot of people. And that's not the type of ADU that everyone's going to be jumping at or excited. So that would have to be a personal choice to do that. If I, if someone were saying, I'm going to do that, most likely you're going to have to undo it at some point or find the right buyer that's not going to pay you a premium for it. [00:35:57] Speaker C: In my opinion. This touches base on the cannibalization. This is the resale value of what you did. You just went and spent, you know, anywhere between seventy and a hundred thousand to convert your garage. You know, that's a nice one, but you know, people do it for much less obviously, but they do a nice one and then they go and then they want to get appraised as a two unit property with these duplexes that have separate garages in the whole deal. And they're like, well, what's, how come I'm not appraising at that value? How come I'm not getting the same amount there? Another saying I have is people have the right to be unreasonable when they're selling their property. And unfortunately, some of these folks, they say, well, I have a 2 unit, I have an ADU J80U, I've got all this and therefore my property's worth blank. And that's completely unrealistic in terms of the monstrosity that you built. That is not only an infrastructure nightmare, it's a floor plan nightmare. It's an architecturally disaster. You know, this is an ugly house. You know that you can do this wrong. Okay, it might work for you, but you can do this wrong. Please do it right. That's my appeal to the general public. Because the better you do it, the more you will get rewarded. You will get rewarded in terms of rental income, you'll get rewarded in terms of resale value. You know, and when you do it right, adus used to be a pariah. It was like, I don't want that in my neighborhood or my backyard when you do it right. The vast majority of every project we've ever done, neighbors have come over and said, fantastic job. We, you know, would you Be interested. You know, we'd like some help. We're. We've considered it. We always thought these were terrible, but if you do it well, you do it nice. Do you think you can help us with this? And it turns into things. We were in Napa this past weekend. Neighbors from three houses down saw us, came over. You know, who did you use? Who was your contractor? All the deal. I said, happy to share. So. [00:37:43] Speaker B: Yeah, well, I think you're a bit different. I think you. You approach things as if you were an artist. And you are an artist. From all my experience with you, it's not just try to, you know, forces shove as much down people's throat as possible and see what comes out. You do it tactfully, you know, beautiful design. And that's lost on a lot of people. [00:38:04] Speaker A: You're. I did not. I mean, I didn't know what to expect. But when you did that reveal video of the Napa one, I was blown away. I'm like, it's gorgeous. [00:38:12] Speaker C: Thank you. Yeah. You will get paid for it. You will get paid for it if you do it right. I mean, that. That's the reality is people want a good, attractive housing that doesn't break the bank. And this is the way to do it. And it's a good solution. It does work. The math works in most circumstances, in most markets, not all markets. But if you have questions of what that market is, that's what I'm here for. That's what I can do. [00:38:36] Speaker A: What are. What about the people that are sitting on. Like you had, the one that I guess is grandfathered in, Right. And you went through the process of getting it appro. I'm sure there's a ton of people out there that are sitting on a property that has an ADU that never was approved or it wasn't a thing at the time. What should they be doing now, if anything? [00:38:53] Speaker C: The answer is, is hiring an architect to draw an existing site plan and survey if necessary. But when you get your site plan, you can take the site plan and you can go into your city and you say, I'm thinking about doing an ADU in this area. Will you approve this? Will this meet standards? And the building department and planning department should be able to work with you on that. [00:39:17] Speaker A: And if they say yes, then you say, okay, I built it overnight. Or how does that. Yes, surprise you? [00:39:24] Speaker C: Go back to the architect. You tell the architect, okay, let's label this formally. Let's put an address to it. We're going to submit this plan as a Conversion, an existing conversion. So there's a vernacular that matters here because new construction is treated different than existing conversions. So the ADU handbook that I mentioned, I think it addresses this or it should, but basically there's a lot more latitude on existing structure conversions than there is new construction. So most people don't know that. They assume it's a one boxer and it's not. [00:39:58] Speaker A: So what would the value be for someone to actually go through the process of getting their current ADU actually labeled and permitted as an adu? Is there value or. [00:40:09] Speaker C: Certainly from a, an appraisal perspective, now that you know, everybody's caught up. The appraisers are caught up. They know what they are. Fannie Mae, Freddie Mac guidelines have been updated. Everybody knows that now. So. So there's a significant value there. If that. If their property has a bootleg unit and it is not permitted, then, and it is, an appraiser cannot find permits for that square footage, it will not count. It will. That income won't count for qualifying purposes, which will hurt you on resale. [00:40:36] Speaker B: Well, there's another component there too. If you're renting out an unpermitted unit on a permitted unpermitted dwelling, legally you can't. And the fines are actually astronomical. You, if the tenant complains and like takes all the way, you would have to refund them every dime they ever paid, plus damages. So it's, it's really steep. [00:40:58] Speaker A: So if you have a bootleg ADU and you are renting it out, plan on renting it out or plan on selling in the near future, definitely go through the process of getting that permitted. [00:41:08] Speaker B: Let's go a little bit deeper into what you were just saying. And I feel like a lot of people underestimate how much this actually costs or what to do. So with an architect, it's not just any architect, but an architect who's done use, who knows what they're doing. And love to get your insight in regards to what, what an average cost is for that. And even a survey, a land survey seems pretty straightforward. You go in, you see the people with all the, the funky came as putting the little pennies on the floor with the, the nails through the concrete that I've always wondered what they were until I realized it. That little survey is somewhere between 5 to $10,000, depending where you're at, sometimes more even for commercial property. Like it adds up very, very quickly and people need to understand that. So they're not surprised. But love to get your insight. I'm, you know, I'LL I could opine as well, but just from beginning to end what they need to do and what some of those costs are. [00:42:01] Speaker C: Sure. So hiring an architect, if you're planning on doing ground up construction, not using a prefab, you know, is important. Architects, they will charge anything across the board. I've seen like basic site plans from $6,000 to custom built, like 25, $50,000 projects. It depends on what you want to do. That's that can just be architecture, but there's a big gap there depending on what you want to build. Single story, two story garage, no garage, you know, are you on a hillside and you have to have, you know, structural engineering on it. You brought up surveying. So not every ADU needs a survey. It just depends if you're going to build close to your property lines and setbacks. So detached garage or detached existing structures, you can convert them. Even if there's a zero lot line on there, you still have to be able to provide egress. And it has to pass fire, but you can do that. But if you. I think the State law is 4ft right now for detached. So as long as you stay out [00:42:57] Speaker B: and you could encroach on that for certain things like fireplaces, staircases, things like that. As long as you fall within certain boundaries. [00:43:04] Speaker C: Exactly. So. But you may not need to pay for a survey if you're not close to your property lines. If your boundaries aren't close, you're okay. But I do know people that have built very close to the property line and when they come to inspect your foundation, they say can you prove that this is not in the setback, that it is not too close to the property line? And that is a very risky proposition. If you've already poured the foundation, you've made $20,000 for a foundation and they say you close to the wall. [00:43:31] Speaker B: Another one that I don't know if you will mention, but soils reports, if you're sometimes in new construction anywhere, especially if you're going up to the second story, you're going to need to do a soils report and that, you know, I think I paid $7,000 for my last soils report. And that just keeps going up and up and up. [00:43:49] Speaker C: It is, you know, there's professionals. So everything we're talking about right now are considered soft costs. Okay, so what about real costs? But they're soft because they have not started construction. You're pre construction. Okay. But soft costs are building permits, architecture fees, engineering fees, soils reports fees. All of that happens in advance of you actually Breaking ground. And so one of the barriers to entry of doing this is if you want to finance an ADU construction, sometimes you don't have the money for the soft cost. So how do you get there? Right, that. This is where I come in. As we talk, we say, okay, can you have, you know, savings? Do you have equity in your property? Can we tap it? Maybe you don't. Maybe you have enough equity for the soft costs, but not enough for the full build. Well, we get you a equity line of credit for the soft costs, we get stamped plans, everything's approved, you're ready to go. Now we get a construction loan for you and then we take out the HELOC and to give you new construction loan. And this is something that we can do. [00:44:51] Speaker B: So yeah, it's a lot of moving parts and talking to someone who's done it is super, super important. Even one of the ones that I was chatting with you about on mine, once I got the permits approved, I had to then go. So I got permits approved through building and then I had to go through public works to change the water meter, which then required me going through the water company. I spent, I don't know, it was like $5,000 in engineering, 7,000 in permitting, and another 5,000 for a new water meter. It took the plumber 25 minutes to swap it. It was insane. And that whole process itself took I think almost four months. [00:45:27] Speaker C: So the municipality that you work in or that you live in, you need to at least explore some of these expenses. And I'll give you an example. I'll give you a perfect example because a huge, huge learning lesson for me, we had built two story ADU in Costa Mesa. We had sold the adu. We had sold the whole property. A year and a half later, the Costa Mesa Water District came back. And I had no problem calling them out because this was completely unethical in my opinion. But they came back and they said, we forgot to tell you to upgrade your water meter. [00:46:01] Speaker A: Nope. [00:46:02] Speaker C: And I said, sounds like you problem. [00:46:04] Speaker A: Yeah. [00:46:05] Speaker C: Yep. Nope. They said, we'll shut off the water to the property. I said, there's tenants in that property. They have tenant rights. You're going to have a massive lawsuit on your hands. They said, we have policing power to shut off the water. [00:46:17] Speaker A: Is that true? [00:46:18] Speaker C: This is 100% true. I went to the Mesa Water District board. I complained, I screamed, I yelled, and I said, you guys are sick and what do they do? So long story short is they charged us $12,000. A year and a half later to. For their fees to get the water meter upgraded for these units. Okay. Now I asked myself later, I was like, man, that's terrible, you know. So then I thought about my orange property. Didn't pay fees. I didn't. Didn't have to upgrade in that meter. My Napa project. I did have to upgrade that meter. You want to know what they charged me? $200. [00:46:53] Speaker B: I don't know if I've told you about my most recent situation with my build. So I'm running a lot of power between the car chargers, all the appliances, PO heat pumps, everything, 500amps. So we have 500amps of power going into the house. So called Edison said you can't go overhead on your riser anymore. You need to go underground. And you need to go underground to the nearest power pole, which is in the alley. So I'm now having to tear up. [00:47:22] Speaker C: What are you doing over there? [00:47:25] Speaker B: So I'm having to tear out the alley, put the conduit underground, connect to the power pole and have that electrical service go underground into my house. And not only that, but the power pole itself and the transformer weren't able to handle the amount of power I'm running. So they're actually replacing the entire pole at the street and had to put a new transformer underground. [00:47:47] Speaker C: Thanks. [00:47:49] Speaker B: Yeah, exactly. That part of the project alone was as much as some people's down payments or entire homes, depending on where it is in the country. [00:47:59] Speaker C: If it's a public right away you got to pay for like traffic control. Like, there's so many ways that this can, you know, can balloon on you, which we're giving you the horror stories, right? [00:48:09] Speaker B: Yeah. [00:48:09] Speaker C: These are the reasons why you should hire a professional to, you know, who's going to tell you, if you do it this way, then that will happen. If you do it this way, then this will happen. You know, and. And I would credit my architect and builder, and I'll give his name is Thayer, Tim Thayer Is Thayer Remodeling. But he has been absolutely instrumental in our understanding of how to engineer and build and develop cost efficiently. And so who you hire for the planning phases of this can save you tens of thousands, if not hundreds of thousands. It is absolutely instrumental to your success. [00:48:46] Speaker B: But along with that, I want to point something out because I have this conversation with people all the time. The difference in costs between a shitty build and a nice build is marginal. The difference in cost of materials is negligible relative to the cost of labor someone's installing. You know, the shittiest vinyl plank or the like linoleum floor. Their cost of labor is the same as installing the nicest holler hardwood. So pay a little bit more, go with the nicer materials, you're going to get a much better product, a much better outcome, more value. Don't go cheap on things on the material side because the labor is where all the costs are. [00:49:24] Speaker C: I agree. I wholeheartedly agree. I, you know, and you will reap the benefits of that, whether it be through rent, market rents or we. I can tell you for a fact, the Napa project we did, the appraiser said the front house we were going to get $4,000 a month and the back house we were going to get 2,500. I get 4,750 for the front. So 750 bucks, that's a 20% premium over market. Okay. Over what the appraiser thought, 20% premium in that and then the back house, 2500, we get 33,250 plus 150 in utilities. So that's 3,400. So but again, that's, that's what, $900 more a month on 2500. 25% premium because we use nice products. People think, think of the, think of the disparity or the delta between the ownership costs right now because of where prices and rates, interest rates are and what the rental cost is. Right. To own this property that, you know, we did in Napa is $15,000 a month. Month. But you can go rent our back house for 3250. That's why rent up. Okay. When affordability is challenged in the marketplace, rents get pushed up. Why? Because nobody can get into ownership where they want. [00:50:37] Speaker A: Yeah, sure. [00:50:38] Speaker B: But also rents, for instance, Southern California have been stagnant. That's a whole different economic situation. But yeah, I totally get where you're coming from there. [00:50:45] Speaker C: I think the rents have stagnated at least price point wise here because of the increase in supply and the massive amount of apartment buildings that have been been developed. That's my personal opinion. 80 years contributing factor to that as well. [00:50:58] Speaker B: Yeah, Absorption in the last report was actually negative. There's not as not enough people taking on all the new inventory coming on the market, specifically within those large multifamily developments. [00:51:08] Speaker C: Yep, I agree. [00:51:09] Speaker A: Did you keep a third structure at your Napa one? [00:51:12] Speaker C: No, no, no. So I mean, you know, I'm an open book. But basically, you know, we purchased the property, we use construction financing to build to do part of our renovation. We had to get rental income in that property. In order to refinance out the construction loan, we've rented it out. Long term rentals. Some people ask about short term rentals. Cities are still allowed to regulate short, short term rentals on ADUs. You're not necessarily allowed just to do it. They can still require permitting and all of that. But so anyway, so we do long term rentals on both units, you know, and then we did our refinance, we got out of the construction loan, but we still have our long term rentals in place. So my game plan is three years long term rental. After three years, we'll revisit. Potentially by that point, hopefully we will be eligible for short term rental in Napa Valley. And then we can do it. So beautiful and convert. [00:52:05] Speaker B: So what are some of the top misconceptions that you hear see in the market regarding ADUs? [00:52:11] Speaker C: I think people get the impression that it's very easy and very simple and it can be, but for the most part it requires just a lot of upfront planning. You should be diligent before starting it. I think that most people think like it's like cookie cutter to the extent where it's $200,000, boom, I have my ADU. You need to have reserves, you need to, you know, they call it contingency. So you need to have contingency in there. 10% contingency is minimum. If a contractor tells you 200, but you better have 220. If they tell you 300, you better have 330. I mean minimum. [00:52:46] Speaker B: That's tight. [00:52:47] Speaker C: I think you need a lot more than that. We have gone into every single contingency I've ever done. I can tell you that for a fact. Right. And we've got a really efficient process at this point. So yeah, you should do it. [00:52:59] Speaker B: What comes to mind when you say that is Johnny Depp the one, his financial advisors. Like wine isn't an investment when you drink it. [00:53:06] Speaker C: Exactly. But actually here, get this. Okay. So I'm a real estate professional because we have our property held in an LLC and we have to travel to it. Guess what's tax deductible? My flights up there, my Airbnbs, every, you know, the work we go up there. So, you know, it's really working out pretty good. [00:53:26] Speaker A: Yeah. Found all the ways. [00:53:28] Speaker C: So I another. If you are interested in doing an ADU and you like a. And you have a second home destination, this might be a good idea. You know, just throwing that out there [00:53:39] Speaker B: for you and something we didn't Touch on. And this is a whole different episode is now in California. We're able to actually split lots, split small lots and sell them off. That is a whole different ball game for what's coming down the pike. I think it's still really early in regards to that, but it's a game changer for all of real estate within the state. [00:54:00] Speaker C: Yeah, I agree. I think SB9 is going to be really interesting. I think how this changes my understanding so far is it's going to be limited to certain lots that have sufficient setbacks. Right. So it, the new lot still has to meet city ordinance, you know, development standards. And so that's going to be interesting to see how that plays out. I don't think the way it's written right now, it will be nearly as prevalent as ADUs. I think it'll be one out of. It'll be under 5% of like the adoption as what ADUs has been. [00:54:30] Speaker B: But HOAs have to say about it and the arguments that they have. [00:54:34] Speaker C: Yeah, well, even like, because I look at a project where I was going to do that and then, you know, and then I looked at like, okay, well what if I just condo map this? And if I condo map this, then what, then what can they say? And there's all these restrictions on what you'd have to do within the hoa. This is much more complicated stuff. But it is interesting. It's. We, we should, we should regroup afterwards and talk about that. Yeah, there's opportunity, but it has to be, it has to be the right parcel of land. [00:55:00] Speaker B: Yeah. [00:55:00] Speaker A: Should that be our next topic together? [00:55:02] Speaker B: Condo mapping? [00:55:03] Speaker A: Condo mapping, no math thing. [00:55:06] Speaker B: So I actually thought about that for mine because I have alley access on the back. I was considering building two separate structures, condoizing it, creating the mini HOA and then selling them off independently. A lot of work. I ultimately live there, so I don't want to deal with it. And in short, my project is a pool house and garage on the first floor and a two bedroom, two bathroom ADU above. And we're 1,100 square feet on the ADU above. The total structure is a little over 2,000 square feet, but across the board, I mean, it's going to be awesome when it's done and add a ton of value and I think just pleasure for myself with the pool house and the family and then a lot of opportunity with ADU above. [00:55:49] Speaker C: Yeah, I think it's a wonderful opportunity. I know. Daniel, the one you're building is incredible. Shannon, I would tell you, you know what if you get the opportunity, don't shy away from it. It has been a game changer for my wife and I financially, and I'm absolutely an advocate. [00:56:02] Speaker A: If done well, my gears are turning, and I'm sure a lot of other people's are, too. Is that. Do you encourage them to reach out to you? If someone's interested in exploring this. What areas are you working? [00:56:13] Speaker C: Absolutely anywhere in California, I'm happy to help. We can finance the project for you. If you want referrals into my resources in terms of the soft costs, we can do that. We have that whole setup. If you're local to Orange county, we have contractors available that we've worked with. We could put you in touch. So I'd like to be a resource. I'm happy to help. This is, you know, this is a part of the future, in my opinion. This is not going away, you know, and. And it's a good solution for a lot of people. [00:56:41] Speaker A: We'll put your contact information in the description so people can call you. [00:56:45] Speaker B: And there's a lot of Edu companies out there, too, and I genuinely enjoy, like, researching them to see what they do. Research who you're working with prior to working with them. I've seen horror stories with clients. Yeah. But for others, just. Just general disclosure. I've. I've had clients come to us and say, you know, we hired them. This is what happened. Like, make sure you really know who you're talking to and what they've done in the past. Like, do your due diligence or just hire. [00:57:11] Speaker A: Chase or just hire. [00:57:12] Speaker B: We've done our due diligence. [00:57:13] Speaker A: Yes. [00:57:14] Speaker C: I should stipulate I am not a licensed contractor. Okay. But, you know, we have licensed contractors that we work with. You know, we will. Well, we can give you referrals, but I'm not. [00:57:22] Speaker A: You have the systems. [00:57:23] Speaker B: I will stipulate I am a licensed contractor. [00:57:26] Speaker C: Yeah. Yeah. So, yeah, maybe I should put that in. I certainly have the hours at this point, you know, so. But yeah, yeah, I actually got to get running, but, you know, my. My sincerest thanks, guys. This has been great. I love chatting with you guys, and I know you're killing it at all of you, so keep it up. [00:57:43] Speaker A: Thanks, Jason. [00:57:44] Speaker B: Well, Jason, thank you so much, so much for your time. We'll put the link in the bio, like, subscribe, reach out to us. Comment if you have any questions. And thanks for listening. [00:57:53] Speaker A: Wonderful. [00:57:53] Speaker C: Thanks, guys. [00:57:54] Speaker A: That's a wrap on this episode of AllView360, all things real estate. If you found this helpful don't forget to subscribe, leave a review and share it with someone navigating their own real estate journey. Connect with us anytime on Instagram @AllView360 and on LinkedIn @AllView Real Estate. Until next time, stay curious and keep your perspective360.