August 1, 2024 • 28 mins
Can Accessory Dwelling Units (ADUs) be the solution to the housing shortage crisis? Join us in this episode of the Professionalist Real Estate Investing Podcast as we explore the transformative potential of ADUs in states like California, Oregon, and New York. Learn about the different types of ADUs—detached units, attached units, garage conversions, and basement apartments—and how they provide affordable housing options amidst rising home prices driven by big companies and affluent buyers turning homes into rentals.
Discover the myriad benefits of constructing ADUs, from generating additional income to creating independent living spaces for aging relatives and even utilizing these units as home offices or guest houses. We'll break down the financial perks, including potential tax deductions and increased property value, while also addressing the regulatory hurdles, such as zoning laws and short-term rental restrictions. Don't miss our discussion on California's Assembly Bill 1033, designed to streamline the ADU development process for homeowners.
Lastly, we delve into the specifics of a $40,000 government grant aimed at assisting with pre-construction costs for ADUs. Find out how this grant can help cover expenses like land surveying, closing costs, and permits, and why it's crucial to consult with a financial advisor to navigate state regulations. We also touch on broader market challenges, including high interest rates and inflated home prices, and emphasize the cyclical nature of the real estate market. Tune in for valuable insights and celebrate our 20th episode milestone with us as we look ahead to an exciting future!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome everybody to the Professionalist Real Estate
Investing Podcast.
I'm with my guy who Yo, it's meRocky.
Hey, Mr Rocky, how you doingtoday bro.
Speaker 2 (00:08):
Doing good, that's good.
Speaker 1 (00:10):
That's good.
Thank you for coming on to the20th episode of the
Professionalist Real EstateInvesting Podcast.
I can't believe it's alreadybeen 20 episodes, yeah, yeah, I
was just looking over today andI was like we've already done 20
.
So I want to say thank you toeveryone who's listened to it,
(00:40):
who's watched the shorts, who'swatched the videos, and I have
more content coming out.
Just gone for a little recessbreak, moving to a better
facilities to get this thingdone and put out some more
content for everybody to listento and watch.
So today we're here and we'regoing to be talking about what
is an ADU in real estate and whyis it so important?
So an ADU, the acronym of ADU,is an accessory dwelling unit.
The thing about ADUs is, beforeI get into it, adus are not in
all states.
They're actually in eightstates and, of course, the state
(01:04):
in California that we live in,it's here Oregon, washington,
massachusetts, florida, colorado, and they're considered
friendly states in Connecticut,maine and New York.
So basically, in a way, to tellyou what a uh adu is um, you
(01:25):
have your house on a propertybut say, like, in the very back
there's like a small little area, um, that someone can live in
like a kind of like a uh,mother-in-law yeah, the quarters
like that yeah, that's, that'show it's done with the adus, and
I got a little nugget to tellyou more about that too.
(01:47):
But that's what an ADU is, andthe reason why that the
government in these states arelooking at ADUs is to help out
with the housing shortage,because probably the beginning
of this year it was estimatedbetween three to 5 million was
the housing shortage.
Now it's up between seven tonine million.
(02:09):
Yeah, so this it's a real, realproblem.
What's going on right now withthe, the housing shortage?
Speaker 2 (02:15):
yes, like they said, they're saying it would all be
uh, renters, renters.
All these big companies areyeah, the blockchain yeah, the
big chains are buying out thesehomes.
You know cash, and then there'sleasing them out.
So no one's able to buy thesehouses out because it's getting
overpriced, overpriced yeah.
And just you know people payingthem cash.
Speaker 1 (02:36):
And, like these companies, they're putting
everything and everybody in achokehold, because if they buy
all these, you know they own allthe yeah they're monopolizing
that thing exactly.
Yeah, that's what they're doingI met some.
Speaker 2 (02:45):
I met some uh neighbors that uh are from san
francisco and they make reallygood money.
They came here like the houseis so cheap here, like we bought
two of them.
We bought two of them oh, goodfor you but they bought those
cash lived, though, lived in insan francisco and and rented
them here, and that's just.
They're not multi-milliondollar billionaire company,
(03:07):
they're just people that havegood money and that's what
anyone could do it.
That's what I'm saying.
Like you get thesemulti-million dollar companies
and there's this random personmakes decent money, they can do
it too, but what it hurts?
The random, the, the middleclass, the lower class, you know
, whatever class you're in, tryto buy a house.
You can't, because these peopleare like, if you ever bought a
(03:28):
house in that bidding war, theywant 300K, but someone's like
I'm going to give them 305.
Right, exactly, of course theseller's going to be like, yeah,
I'll take that guy.
And the other guy's like Iscrapped up all this money for
300K.
I'll never buy it and they'llnever buy it.
Speaker 1 (03:46):
Right, exactly, it's like we're renting baby, right?
Yeah, so that's what's going onnow, especially with our
housing economy right now.
So, with the ADUs, as I said,it's accessory dwelling unit,
but there's different types ofADUs, so there's a detached ADU
and that's the one we wastalking about.
It's separate structure.
It's located on the sameproperty as the house is.
Speaker 2 (04:07):
Yeah.
Speaker 1 (04:08):
So it's its own section.
Speaker 2 (04:11):
Yeah, those are those Home Depot shed houses, oh yeah
the mini homes yeah, they'rebuying those, slapping them in
the backyard.
The mini homes yeah exactly.
Speaker 1 (04:26):
The next one is the attached ADUs and those are
additions to the main house,either on the side or the back.
Now those like me and you wastalking about before, they're
actually that's what people aredoing nowadays when there's when
they redoing their house, theiraction, they're actually, uh,
adding an additional part tothat also yep and then the next
one I've actually seen this hereis uh, the garage conversions,
converting to uh into existinggarage, into a living space.
(04:48):
That is huge.
I know definitely over in thehilltop section there's a lot of
places like that they're usingit.
Speaker 2 (04:54):
They're using it for rooms yeah, if you drive by
neighborhoods and you look athouses that you're like hey man,
that's a nice driveway.
Why is it not in the garage use?
The garage door is not there,no more.
It was like either a walk-indoor or a window.
They just converted it which iswhich is it's awesome if you
need the extra room, but at thesame time, you just lost
(05:15):
yourself a garage for, like youknow, parking your car.
Speaker 1 (05:18):
Working on working on your car, tools and stuff like
that Because usually theythey'll seal that garage door
and make it confined into a room.
And then the next one well, wedon't hear much about because we
don't have a lot of structureslike that here in California.
It's a basement apartment, socreating a separate living
quarters within the basement ofthe main house, and then, last
(05:42):
but not least, the internal ADUs, that's repurposing part of the
main house, like say, for alarge attic, into a separate
unit, that's actually kind ofsmart right there.
Speaker 2 (05:54):
Yeah, I've seen that.
I was like I wish I had anattic or something extra to do
that, because you always see iton TikTok now Everybody you know
how the algorithms you startlooking up some and that's all
you see.
So now I'm looking at like homeimproves and stuff and
everyone's doing the garages andaddicts and everything stuff
like that.
I'm like oh man, wish I hadthat I don't have that though
(06:15):
you have no basements overaround here right, some places
the older ones.
Speaker 1 (06:18):
But uh, but addicts if you have the room for it yeah
, majority of the ones that dohave basements, like
geographical wise, would bedefinitely in the midwest
midwest yeah and I would saydefinitely midwestern reason why
because of tornadoes yeah, I'llsay tornadoes is what?
Speaker 2 (06:35):
because I got a friend that moved from maine.
He's like there's not one housethat does not have a basement
or like a space we can get into.
Speaker 1 (06:43):
That's true.
That's that's true.
Speaker 2 (06:44):
Because like, yeah, tornadoes, they're like.
Exactly, they're the ones thathave those shutters outside the
house.
You know you open them up andyou crawl into the basement and
then you shut them.
I was like, ah, you don't wantto see that in movies.
But yeah, you're right and Iwill say that.
Speaker 1 (07:06):
So I was telling you house.
So when I was driving there, um, the house looked just normal.
But then I started looking moreand more.
So I went into the driveway andeverything I'm like okay, it's
like two parts to it.
And I looked at it and then Iwalked inside the garage.
So, um, my mentor he's meanwhen I say I call him mentor,
but he, he told me to go intothe garage.
So I go into the garage and Imake an immediate left and what
(07:26):
it is?
It's basically an ADU.
It has everything in it.
Speaker 2 (07:29):
Oh, I saw that in that picture.
Speaker 1 (07:38):
Yeah, it has a bathroom, it has a room, it has
a kitchen, it has a stove, ithas a dishwasher and an AC unit.
And I was like this is crazy.
So then if you go into theother side of the garage, it's
another room that they werebuilding for another room.
Oh wow, meanwhile that garageright there.
It could fit no more than twoto three cars in that garage,
yeah.
And then when you go into thehouse, there's actually an
addition part that they added on, basically like an ADU for the
(08:02):
house also.
And then how you was talk aboutthe shutters yeah there's
actually one there at that housealso oh yeah yeah, all concrete
underneath it, underneath theretoo.
So I was just like this houseright here.
It's like adu definitely inthis place, right here so I was
next.
Speaker 2 (08:16):
You saw, when you sent me the picture of the house
, I was looking it up, I wastrying to figure out the layout.
I was thinking about the layout.
I was like how the heck is thisthat that makes more sense.
So there, yes, because it waslike the price was was high for
the visual outside.
Speaker 1 (08:33):
Look at it yes, the visual, the visual by going to
all the rooms and stuff.
I was like, okay, I can seethat the visual, the visual of
the house, compared to goingthere.
It's like two different stories, because you can look at it
you're like, because if you lookat it you're like what?
And then you look at the price,I'm like, but you actually can
that ADU in the back.
And then in that backyard therewas an acre to an acre and a
(08:53):
half in the backyard with agazebo that was perfect.
Speaker 2 (08:57):
It was a huge property.
Speaker 1 (08:59):
Yeah.
So ADUs is definitely a thingthat's going to help change the
housing market.
I don't know how much, but it'sout there and people are using
it to the fullest.
Speaker 2 (09:11):
Yeah, it's always been out there.
It's always been out there.
I think, with this now, withthe economy and everything,
people are going to utilize itmore, because I just built a
shed in my backyard and, lookinginto these ADUs, I like I can,
I can throw a kitchen in there,and I was, and some plumbing.
That's right, because the onlything you need for adu right,
you need, you need plumbing, soa bathroom and you need kitchen
(09:35):
in the living space.
It could be, it could be like aloft.
It could be um, not loft, butum, yeah, loft.
Speaker 1 (09:40):
Right, yeah, uh, yeah a studio, studio, studio
together yes, the bathroom, yesit's basically that, but you
need a kitchen to cook.
It's basically a living area, sostudio yes, it's the bare
minimum, basically like a studio, yeah, yeah.
So the importance of adusincrease housing supply.
As I said before, it's going tohelp out the economy,
(10:02):
especially with the housingmarket, because, like I said
before, seven to nine millionthat we're down with help that
needs to be helped in thehousing market is crazy, like
it's just crazy.
Something has to be done,especially nowadays.
The affordable housing options.
I'll talk about that a littlebit later because I told you I
(10:24):
got a gem for you when it comesabout that.
Another good one is incomegeneration for homeowners.
So homeowners can rent that ADUto generate extra income, which
will help with mortgagepayments and property taxes,
which is going to help out withwhat I'm about to tell you,
because it's crazy.
What?
Especially here in the state ofCalifornia.
I know they're waiting for itto do it in California, but it's
(10:47):
actually working with Seattleright now.
And then efficient land use.
So when it comes to efficientland use, at least you want to
use that for something you knowwhat.
I'm saying, like, why not notgenerate making money from that?
Build a structure, make it anADU, and it's going to help out
with everything that comes withit Help out with the housing
(11:08):
market, help out with yourmortgage, everything that comes
with the mortgage, the propertytax, homeowners insurance and
everything with that.
And then the next one was to besupport for aging in place so
ADUs can serve as a living spacefor aging relatives, allowing
them to remain close to familywhile maintaining independence.
(11:28):
That's definitely good, with usworking around the healthcare.
That definitely is needed,because a lot of people that's
one of the main things when aperson gets discharged, they ask
them where they're going tostay.
That's the number one question.
And if you have an ADU, youhave property behind the main
property.
That helps out so much becauseyou actually can.
(11:49):
They're right there on theproperty and you can have eyes
on them when needed.
Speaker 2 (11:53):
Yeah, I think that's when people are thinking about
like granite houses or ADUs.
I think that's the first thingyou think of is like okay, I
need more room for family.
Speaker 1 (12:03):
Yes, and relatives.
Speaker 2 (12:04):
But like going into like the overall aspect of real
estate.
It's not just helping outfamily and friends and stuff,
but it's like you said, it cangenerate some money when you're
doing that.
It can help with tax deductions.
It can add value to your homewhen you sell it.
That it can help with uh taxdeductions.
It can uh add value to yourhome when you sell it with the
overall value.
Yes, all kinds of extra littlestuff that people don't think
(12:26):
about.
Like, yeah, I would love tohave a grand home for my mom one
day if she gets old, somethinglike that.
But the same time I'm like I'mlike you have, like you said,
have a mom, clothes be able totake care of her, be closed, but
at the at the same time I'mthinking tax deductions increase
in property value.
I was like you know what, ifshe doesn't move in anytime soon
, I can use it as an office, asa main office.
(12:46):
How much square foot I want towrite off this year?
Well, let's do a map.
You got electricity, plumbing,all that stuff.
You got to do a new roof on it.
Boom, write off, write off,write off yes, yes, that you're
already gonna build for your,for your, uh, you know, for the
future.
So I think, like exactly, Ithink, about all that yeah, you
got and that's the family andthe family, but at the same time
(13:08):
it's like we're going realestate.
Speaker 1 (13:10):
This is what really helps think about all the
options that come with itexactly, and then uh flexibility
, adus can serve as various uhpurposes time just like you said
such as home offices, guesthouse or rental property,
adapting to the changing needsof the homeowner, so you can do
whatever you want to with itWhatever you want, especially if
(13:32):
it has everything the plumbing,the kitchen, everything it can
be anything you need to be ontop.
Speaker 2 (13:40):
So it's pretty sweet to have that option.
Speaker 1 (13:41):
I was thinking another thing too, because you
know, we know about taxes, whentaxes.
We don't know everything abouttax, but we know some things we
don't have to get in trouble,right exactly, and I was
thinking it too.
You have shoot this right here,these adus, you can use the
augusta rule with it you can't.
Speaker 2 (13:55):
So I was looking at that, I was looking at the.
I don't know, it's California.
I have to be pretty sure it'sCalifornia.
If you have an ADU, you're notable to Airbnb it or short-term
oh wow, it's more of a long-termthing.
I don't know what short-termmeans Less than a couple weeks,
couple months, something likethat, because there's different
(14:17):
variations of short-term renting.
Airbnb right, you know, for theweekend for a week or two or
something like that.
But, uh, I think there's,there's, uh, I think you know, I
think we have it on here forthe next um segment.
But, uh, zoning some zones,don't let you have them.
Uh, because you know I don'tknow what regulations the city
(14:43):
has.
Uh, uh, you know I don't knowwhat regulations the city has,
because there's a big push onAirbnbs too.
There's some places that won'tlet you do that.
Huge, so same thing with ADUs,but the biggest, safest way is
to, if you're living there Imean, you're not, obviously
you're not um generating moneybut like, I think, long term is
(15:05):
the safest route if you're gonnamake money off of it, yes, I
think so.
Yeah, I might be wrong, butthat's what I was reading on.
I was like, oh, because,because, oh, yeah, airbnb and
stuff like that.
But it's like there's there's,depending on where you're at,
there's regulations on that.
So that's something to thinkabout.
When you're like, oh, I'm goingto buy like a lake house and
build something in the back andAirbnb every once in a while,
(15:28):
it's like, ooh, just make surethat you're able to build that
ADU and use it as that type ofproperty.
Speaker 1 (15:35):
Yes, so I'll get into the gym.
(16:03):
So I was watching, I'veactually watched the
episodeskirts of Seattle and sobasically, california adopted a
bill and it basically is signed.
They're actually working ontheir, their regular date
regulations and everything inall the districts here in
California and it's a assemblybill 1033.
In California and it's AssemblyBill 1033.
So what 1033 does is with theADUs.
Is it basically aftereverything is done?
(16:25):
You know, all the I's dot andthe T's are crossed, that ADU is
going to be a living space, aswe know.
But the part about that ADU isit's it's going to be broken
down to another parcel.
Yeah, and when it breaks downto another parcel you're like,
oh okay, you're helping out theeconomy and everything and the
(16:47):
housing industry, but thegovernment's going to get there
because they're going to tax youbecause it's a different parcel
number than the house.
Yes, and I was like, wow, that'scrazy, you're helping it out,
but still, the government'sstill going to get their money.
Speaker 2 (17:02):
Oh yeah, speaking about the government, a lot of
people think, oh, I'm going tobuild an ADU onto my house, a
granite house.
What happens to my propertyvalue?
The overall property value isgoing to go up.
But I believe when you build anADU, it's its own, like you say
, say, its own parcel, so it'staxed separately from your house
(17:23):
.
Yes, so they're both gonna gettaxed, like?
the government's gonna get theirmoney, yes, but you're not
gonna say your house is worth300k.
You, you build this adu.
Now, overall, your wholeproperty is worth like 400k.
You're not gonna get taxed on400k.
You're gonna get taxed on 300kat this house and 100k there,
which is, you know, I'd ratherget taxed on little sections
versus the overall value.
(17:43):
Um, but yeah, that's, that'sanother thing to think about too
when you're doing your taxes.
But because they're twoseparate parcels, you got two
separate, two separate um.
If you're making money off youredu, you have deductions on
that, and you had deductions onyour house if you have a
business, if you're if you don'thave a business or are using
(18:04):
that house as a property, arental property or something
like that, you know you might be.
You might be losing money, Ithink.
Speaker 1 (18:11):
Yeah, and I view it like you know.
The government was going to,you know, put their hands in and
like oh this, but this is goingto happen too.
Speaker 2 (18:26):
Yeah, there's a grant too.
You see, you hear about thegrant.
No, I did.
The grant is a forty thousanddollar grant.
It helps to help with thehousing market and stuff.
A forty thousand dollar grantto help.
Um, it doesn't help you buildan adu, uh, you know a unit, but
it helps, uh with like pre-cost.
So like, uh, if you need a landsurveyor to put property down,
they'll help pay for that, umclosing costs, fees, um permits,
uh things of that nature.
But the actual like buildingmaterial costs and stuff like
(18:46):
that, you, that's out of yourpocket.
Oh, but yes, for it's 40k.
It's a grant, you have to applyfor it.
There's a lot of uh things youhave to get checked off, just
like buying a house, you know,you got your inspections done.
You gotta get all this done, um.
But once it's, you apply for it, it's basically like um, it's
up to 40k so you might getthings help help pay for it now.
But it's what helps with the uh, the housing crack, uh, the
(19:11):
market right now.
That's what the grant's for.
It's like oh, we want toincentivize it so you can get up
to 40k or something like that.
Yeah, I got.
Yeah, I looked it up and I'mlike oh, that's pretty that's
legit right there.
Speaker 1 (19:22):
So if anybody who wants to get an adu, and
especially in the state eightstates I was talking about, yes,
talk to a financial advisor andsee what it is because, like I
said, because each state isdifferent, with the regulations
and grants and stuff and thenand the gentleman said that in
about well, I watched about amonth, month and a half ago and
probably in about 10 months, the, especially here in a month,
month and a half ago, andprobably in about 10 months, the
(19:43):
, especially here in Californiathey're going to structure it
for the, for the parcel number.
So they're, they're gettingeverything in order.
So when, if people want to um,I think further out or I don't
know if they would have tobacktrack, but they're going to
have it where those ADUs, thoseare parcels too.
So that's good to know, becauseyou don't want to think that,
(20:05):
oh, I'm going to make this andI'm just going to make all this
capital right here.
No, the government's going toget their money too, they're
going to get their money.
Speaker 2 (20:10):
Yeah, they're going to get their money too you just
got to know how to structure itto where you're going to get the
maximum income benefits for youwith tax deductions and stuff
like that, because they're goingto get their money.
Whatever money you want to make, they're going to make too.
So, yeah, all right.
Speaker 1 (20:24):
For sure there's like yeah, we, if we're going to do
this, we need to get a certainpiece of that pie also.
Speaker 2 (20:30):
Especially if they have grants and stuff to help
you.
Speaker 1 (20:32):
Yes.
Speaker 2 (20:33):
You know, uh, yeah, going to help us for sure.
Speaker 1 (20:37):
I'm glad you said it, because knowledge is power.
Probably a lot of people don'tknow about the grants.
Speaker 2 (20:42):
Yeah, it's crazy, because I started looking up,
going to his podcast, I was like, oh yeah, what's an ADU?
And then I was like, what is it?
Okay, I know what it is now Allright.
First question.
I was like all right what tax?
benefits Exactly.
What benefits do I get out oftaxes?
Yeah, and then how do you goabout doing it?
And they'll start popping uplike you benefit just like a
rental property.
No way.
(21:03):
So not only do you have thebenefits of a rental property
depreciation, constructionmaterials, all that good stuff,
it's right there in yourbackyard.
It's pretty nice, I mean,especially if only if you're, I
guess you rent someone that youwant clothes like that you rent
(21:24):
someone that you want close,like that, but yes, so yeah,
those.
Speaker 1 (21:25):
That's what adu is and I hope that it does help out
with our housing economybecause, man, it right now it's
just, it's just going bad rightnow.
It's going really bad right nowbecause you gotta think um
interest rate.
Interest rate, they say thatit's.
It was supposed to go down fourtimes this year.
Speaker 2 (21:41):
Yeah.
Speaker 1 (21:41):
It hasn't gone down once, and they projected that
it's going to go down inSeptember, but that's neither
here nor there.
We don't even know.
Speaker 2 (21:50):
The last interview they asked him straight up like
so is it going to go down?
Is the interest going to godown?
Obviously they never do.
The government was like we arelooking at the numbers.
Speaker 1 (22:03):
Like we all know what that means exactly.
Speaker 2 (22:04):
You look at, it's not going nowhere, yeah but even
then, right, even then, even ifthe market goes down, if the uh
interest rates go down, yourhouse, your house prices right
now are all jacked at like 23.
So your 300k house right nowthere's no one selling a 300k
house right now that their houseweren't worth like 250 or
something, or 250, 275 a coupleyears ago.
(22:27):
Now they're like 300k.
It's like dude, that's like a275 000 max house.
Now you're at 300k.
So if your house is all right,300k and that's over what I
think is you know, know, housesalready cost.
When interest rates go down,that house price is going to
jack up again.
Yeah, like it always has.
(22:48):
If interest goes down, houseprices go up.
Speaker 1 (22:54):
House prices go down, interest rates go up.
Speaker 2 (22:54):
I mean, it's just a roller coaster when it comes to
all that, yeah, and we'll alwayssay I should make a shirt that
says if you can afford it, goget it.
Speaker 1 (23:02):
Exactly right.
Speaker 2 (23:03):
If you can do the numbers and it works for you,
just go get it.
Like, if you can afford it, goget it yeah.
Man, if you can buy a houseright now and you lock in a good
price or decent price and theinterest rates do go down or
eventually go down, hopefullythen you can refi and put your
money back out.
If you depend on how muchequity you have into it and you
(23:24):
know.
Speaker 1 (23:24):
You know all the change because, like man, shoot
when we was, when we was younger, shoot they used to say, oh
yeah, it was great when interestrates was 16, 17 percent.
We're looking at them sidewayslike what?
Speaker 2 (23:34):
yeah, the houses were like 25 or 25, 50k.
Yeah, for a super nice brandnew house 50, 60k yeah of course
it was up 16 something K likeright now, but the medium income
, right Like back in the daysversus now, you know, I think
now the medium income for anaverage person is anywhere from
like 30 to 50K, right.
(23:56):
So how can you afford a 300plus thousand dollar house?
Versus back in the day theincome was like $10,000 to
$20,000 a year.
So, of course the numbers areinflated.
We have inflation in the market.
Covid really swung a Changed up.
Speaker 1 (24:16):
Yeah changed up things right there, changed the
world on everything.
Speaker 2 (24:21):
So yeah, that argument, I think it's been
debunked.
Speaker 1 (24:24):
Like oh yeah 16, whatever.
Speaker 2 (24:27):
I have a 3% interest rate, but my house is worth it.
Yeah, I got a 3% interest rate,but I still had to pay the
money to get the house.
It was over budget when Ibought my house.
But yeah, I got 3%.
So yeah, but I would alwaystake lower interest rate with a
high house price becauseinterest rates is going to kill
(24:49):
you.
Yes, because you buy a housefor $100K or $50K a $50K house
with a 25% interest rate.
Oh, my goodness, you're payinginterest for the first 20 years.
Yeah, yeah, you haven't eventouched the principle yet, yeah
so yeah, but yeah, depending onhow you want to do it.
If you want to pay your houseoff soon, then uh, high or low
(25:11):
interest.
High interest rate would bebetter because your parents
gonna be lower versus uh.
If you want to pay house offway, way later, then you want a
lower interest rate and then umpay up high up front of the
house price yeah that's exactlyright, yeah, so yeah, that's
what it is with the ADUs.
Speaker 1 (25:30):
I hope it works out for the best, especially for our
country when it comes to this.
So to get this housing, thishousing industry, in check,
because right now it just it'sjust going wild right now.
Speaker 2 (25:42):
Oh yeah.
Speaker 1 (25:43):
So yeah, thank you, bro, for coming on the 20th
episode.
Speaker 2 (25:47):
Yeah, man.
Speaker 1 (25:47):
Can't wait till I get to the 200th episode.
And if anybody wants to jointhe Professor's Real Estate
Podcast, right now I'm.
I'm.
I'm redoing my website, sothat's down temporarily, but you
can email me at real estateinvesting, at the
professionalistinfo, and thenI'll.
(26:09):
I'll respond to your emails andeverything.
Yeah, rather than that, it wasa good one.
Thanks for coming on, bro.
Speaker 2 (26:17):
Yeah, man.
Speaker 1 (26:18):
All right, you have a good one.
Welcome everybody to the Professionalist Real Estate
Investing Podcast.
I'm with my guy who Yo, it's meRocky.
Hey, Mr Rocky, how you doingtoday bro.
Speaker 2 (00:08):
Doing good, that's good.
Speaker 1 (00:10):
That's good.
Thank you for coming on to the20th episode of the
Professionalist Real EstateInvesting Podcast.
I can't believe it's alreadybeen 20 episodes, yeah, yeah, I
was just looking over today andI was like we've already done 20
.
So I want to say thank you toeveryone who's listened to it,
(00:40):
who's watched the shorts, who'swatched the videos, and I have
more content coming out.
Just gone for a little recessbreak, moving to a better
facilities to get this thingdone and put out some more
content for everybody to listento and watch.
So today we're here and we'regoing to be talking about what
is an ADU in real estate and whyis it so important?
So an ADU, the acronym of ADU,is an accessory dwelling unit.
The thing about ADUs is, beforeI get into it, adus are not in
all states.
They're actually in eightstates and, of course, the state
(01:04):
in California that we live in,it's here Oregon, washington,
massachusetts, florida, colorado, and they're considered
friendly states in Connecticut,maine and New York.
So basically, in a way, to tellyou what a uh adu is um, you
(01:25):
have your house on a propertybut say, like, in the very back
there's like a small little area, um, that someone can live in
like a kind of like a uh,mother-in-law yeah, the quarters
like that yeah, that's, that'show it's done with the adus, and
I got a little nugget to tellyou more about that too.
(01:47):
But that's what an ADU is, andthe reason why that the
government in these states arelooking at ADUs is to help out
with the housing shortage,because probably the beginning
of this year it was estimatedbetween three to 5 million was
the housing shortage.
Now it's up between seven tonine million.
(02:09):
Yeah, so this it's a real, realproblem.
What's going on right now withthe, the housing shortage?
Speaker 2 (02:15):
yes, like they said, they're saying it would all be
uh, renters, renters.
All these big companies areyeah, the blockchain yeah, the
big chains are buying out thesehomes.
You know cash, and then there'sleasing them out.
So no one's able to buy thesehouses out because it's getting
overpriced, overpriced yeah.
And just you know people payingthem cash.
Speaker 1 (02:36):
And, like these companies, they're putting
everything and everybody in achokehold, because if they buy
all these, you know they own allthe yeah they're monopolizing
that thing exactly.
Yeah, that's what they're doingI met some.
Speaker 2 (02:45):
I met some uh neighbors that uh are from san
francisco and they make reallygood money.
They came here like the houseis so cheap here, like we bought
two of them.
We bought two of them oh, goodfor you but they bought those
cash lived, though, lived in insan francisco and and rented
them here, and that's just.
They're not multi-milliondollar billionaire company,
(03:07):
they're just people that havegood money and that's what
anyone could do it.
That's what I'm saying.
Like you get thesemulti-million dollar companies
and there's this random personmakes decent money, they can do
it too, but what it hurts?
The random, the, the middleclass, the lower class, you know
, whatever class you're in, tryto buy a house.
You can't, because these peopleare like, if you ever bought a
(03:28):
house in that bidding war, theywant 300K, but someone's like
I'm going to give them 305.
Right, exactly, of course theseller's going to be like, yeah,
I'll take that guy.
And the other guy's like Iscrapped up all this money for
300K.
I'll never buy it and they'llnever buy it.
Speaker 1 (03:46):
Right, exactly, it's like we're renting baby, right?
Yeah, so that's what's going onnow, especially with our
housing economy right now.
So, with the ADUs, as I said,it's accessory dwelling unit,
but there's different types ofADUs, so there's a detached ADU
and that's the one we wastalking about.
It's separate structure.
It's located on the sameproperty as the house is.
Speaker 2 (04:07):
Yeah.
Speaker 1 (04:08):
So it's its own section.
Speaker 2 (04:11):
Yeah, those are those Home Depot shed houses, oh yeah
the mini homes yeah, they'rebuying those, slapping them in
the backyard.
The mini homes yeah exactly.
Speaker 1 (04:26):
The next one is the attached ADUs and those are
additions to the main house,either on the side or the back.
Now those like me and you wastalking about before, they're
actually that's what people aredoing nowadays when there's when
they redoing their house, theiraction, they're actually, uh,
adding an additional part tothat also yep and then the next
one I've actually seen this hereis uh, the garage conversions,
converting to uh into existinggarage, into a living space.
(04:48):
That is huge.
I know definitely over in thehilltop section there's a lot of
places like that they're usingit.
Speaker 2 (04:54):
They're using it for rooms yeah, if you drive by
neighborhoods and you look athouses that you're like hey man,
that's a nice driveway.
Why is it not in the garage use?
The garage door is not there,no more.
It was like either a walk-indoor or a window.
They just converted it which iswhich is it's awesome if you
need the extra room, but at thesame time, you just lost
(05:15):
yourself a garage for, like youknow, parking your car.
Speaker 1 (05:18):
Working on working on your car, tools and stuff like
that Because usually theythey'll seal that garage door
and make it confined into a room.
And then the next one well, wedon't hear much about because we
don't have a lot of structureslike that here in California.
It's a basement apartment, socreating a separate living
quarters within the basement ofthe main house, and then, last
(05:42):
but not least, the internal ADUs, that's repurposing part of the
main house, like say, for alarge attic, into a separate
unit, that's actually kind ofsmart right there.
Speaker 2 (05:54):
Yeah, I've seen that.
I was like I wish I had anattic or something extra to do
that, because you always see iton TikTok now Everybody you know
how the algorithms you startlooking up some and that's all
you see.
So now I'm looking at like homeimproves and stuff and
everyone's doing the garages andaddicts and everything stuff
like that.
I'm like oh man, wish I hadthat I don't have that though
(06:15):
you have no basements overaround here right, some places
the older ones.
Speaker 1 (06:18):
But uh, but addicts if you have the room for it yeah
, majority of the ones that dohave basements, like
geographical wise, would bedefinitely in the midwest
midwest yeah and I would saydefinitely midwestern reason why
because of tornadoes yeah, I'llsay tornadoes is what?
Speaker 2 (06:35):
because I got a friend that moved from maine.
He's like there's not one housethat does not have a basement
or like a space we can get into.
Speaker 1 (06:43):
That's true.
That's that's true.
Speaker 2 (06:44):
Because like, yeah, tornadoes, they're like.
Exactly, they're the ones thathave those shutters outside the
house.
You know you open them up andyou crawl into the basement and
then you shut them.
I was like, ah, you don't wantto see that in movies.
But yeah, you're right and Iwill say that.
Speaker 1 (07:06):
So I was telling you house.
So when I was driving there, um, the house looked just normal.
But then I started looking moreand more.
So I went into the driveway andeverything I'm like okay, it's
like two parts to it.
And I looked at it and then Iwalked inside the garage.
So, um, my mentor he's meanwhen I say I call him mentor,
but he, he told me to go intothe garage.
So I go into the garage and Imake an immediate left and what
(07:26):
it is?
It's basically an ADU.
It has everything in it.
Speaker 2 (07:29):
Oh, I saw that in that picture.
Speaker 1 (07:38):
Yeah, it has a bathroom, it has a room, it has
a kitchen, it has a stove, ithas a dishwasher and an AC unit.
And I was like this is crazy.
So then if you go into theother side of the garage, it's
another room that they werebuilding for another room.
Oh wow, meanwhile that garageright there.
It could fit no more than twoto three cars in that garage,
yeah.
And then when you go into thehouse, there's actually an
addition part that they added on, basically like an ADU for the
(08:02):
house also.
And then how you was talk aboutthe shutters yeah there's
actually one there at that housealso oh yeah yeah, all concrete
underneath it, underneath theretoo.
So I was just like this houseright here.
It's like adu definitely inthis place, right here so I was
next.
Speaker 2 (08:16):
You saw, when you sent me the picture of the house
, I was looking it up, I wastrying to figure out the layout.
I was thinking about the layout.
I was like how the heck is thisthat that makes more sense.
So there, yes, because it waslike the price was was high for
the visual outside.
Speaker 1 (08:33):
Look at it yes, the visual, the visual by going to
all the rooms and stuff.
I was like, okay, I can seethat the visual, the visual of
the house, compared to goingthere.
It's like two different stories, because you can look at it
you're like, because if you lookat it you're like what?
And then you look at the price,I'm like, but you actually can
that ADU in the back.
And then in that backyard therewas an acre to an acre and a
(08:53):
half in the backyard with agazebo that was perfect.
Speaker 2 (08:57):
It was a huge property.
Speaker 1 (08:59):
Yeah.
So ADUs is definitely a thingthat's going to help change the
housing market.
I don't know how much, but it'sout there and people are using
it to the fullest.
Speaker 2 (09:11):
Yeah, it's always been out there.
It's always been out there.
I think, with this now, withthe economy and everything,
people are going to utilize itmore, because I just built a
shed in my backyard and, lookinginto these ADUs, I like I can,
I can throw a kitchen in there,and I was, and some plumbing.
That's right, because the onlything you need for adu right,
you need, you need plumbing, soa bathroom and you need kitchen
(09:35):
in the living space.
It could be, it could be like aloft.
It could be um, not loft, butum, yeah, loft.
Speaker 1 (09:40):
Right, yeah, uh, yeah a studio, studio, studio
together yes, the bathroom, yesit's basically that, but you
need a kitchen to cook.
It's basically a living area, sostudio yes, it's the bare
minimum, basically like a studio, yeah, yeah.
So the importance of adusincrease housing supply.
As I said before, it's going tohelp out the economy,
(10:02):
especially with the housingmarket, because, like I said
before, seven to nine millionthat we're down with help that
needs to be helped in thehousing market is crazy, like
it's just crazy.
Something has to be done,especially nowadays.
The affordable housing options.
I'll talk about that a littlebit later because I told you I
(10:24):
got a gem for you when it comesabout that.
Another good one is incomegeneration for homeowners.
So homeowners can rent that ADUto generate extra income, which
will help with mortgagepayments and property taxes,
which is going to help out withwhat I'm about to tell you,
because it's crazy.
What?
Especially here in the state ofCalifornia.
I know they're waiting for itto do it in California, but it's
(10:47):
actually working with Seattleright now.
And then efficient land use.
So when it comes to efficientland use, at least you want to
use that for something you knowwhat.
I'm saying, like, why not notgenerate making money from that?
Build a structure, make it anADU, and it's going to help out
with everything that comes withit Help out with the housing
(11:08):
market, help out with yourmortgage, everything that comes
with the mortgage, the propertytax, homeowners insurance and
everything with that.
And then the next one was to besupport for aging in place so
ADUs can serve as a living spacefor aging relatives, allowing
them to remain close to familywhile maintaining independence.
(11:28):
That's definitely good, with usworking around the healthcare.
That definitely is needed,because a lot of people that's
one of the main things when aperson gets discharged, they ask
them where they're going tostay.
That's the number one question.
And if you have an ADU, youhave property behind the main
property.
That helps out so much becauseyou actually can.
(11:49):
They're right there on theproperty and you can have eyes
on them when needed.
Speaker 2 (11:53):
Yeah, I think that's when people are thinking about
like granite houses or ADUs.
I think that's the first thingyou think of is like okay, I
need more room for family.
Speaker 1 (12:03):
Yes, and relatives.
Speaker 2 (12:04):
But like going into like the overall aspect of real
estate.
It's not just helping outfamily and friends and stuff,
but it's like you said, it cangenerate some money when you're
doing that.
It can help with tax deductions.
It can add value to your homewhen you sell it.
That it can help with uh taxdeductions.
It can uh add value to yourhome when you sell it with the
overall value.
Yes, all kinds of extra littlestuff that people don't think
(12:26):
about.
Like, yeah, I would love tohave a grand home for my mom one
day if she gets old, somethinglike that.
But the same time I'm like I'mlike you have, like you said,
have a mom, clothes be able totake care of her, be closed, but
at the at the same time I'mthinking tax deductions increase
in property value.
I was like you know what, ifshe doesn't move in anytime soon
, I can use it as an office, asa main office.
(12:46):
How much square foot I want towrite off this year?
Well, let's do a map.
You got electricity, plumbing,all that stuff.
You got to do a new roof on it.
Boom, write off, write off,write off yes, yes, that you're
already gonna build for your,for your, uh, you know, for the
future.
So I think, like exactly, Ithink, about all that yeah, you
got and that's the family andthe family, but at the same time
(13:08):
it's like we're going realestate.
Speaker 1 (13:10):
This is what really helps think about all the
options that come with itexactly, and then uh flexibility
, adus can serve as various uhpurposes time just like you said
such as home offices, guesthouse or rental property,
adapting to the changing needsof the homeowner, so you can do
whatever you want to with itWhatever you want, especially if
(13:32):
it has everything the plumbing,the kitchen, everything it can
be anything you need to be ontop.
Speaker 2 (13:40):
So it's pretty sweet to have that option.
Speaker 1 (13:41):
I was thinking another thing too, because you
know, we know about taxes, whentaxes.
We don't know everything abouttax, but we know some things we
don't have to get in trouble,right exactly, and I was
thinking it too.
You have shoot this right here,these adus, you can use the
augusta rule with it you can't.
Speaker 2 (13:55):
So I was looking at that, I was looking at the.
I don't know, it's California.
I have to be pretty sure it'sCalifornia.
If you have an ADU, you're notable to Airbnb it or short-term
oh wow, it's more of a long-termthing.
I don't know what short-termmeans Less than a couple weeks,
couple months, something likethat, because there's different
(14:17):
variations of short-term renting.
Airbnb right, you know, for theweekend for a week or two or
something like that.
But, uh, I think there's,there's, uh, I think you know, I
think we have it on here forthe next um segment.
But, uh, zoning some zones,don't let you have them.
Uh, because you know I don'tknow what regulations the city
(14:43):
has.
Uh, uh, you know I don't knowwhat regulations the city has,
because there's a big push onAirbnbs too.
There's some places that won'tlet you do that.
Huge, so same thing with ADUs,but the biggest, safest way is
to, if you're living there Imean, you're not, obviously
you're not um generating moneybut like, I think, long term is
(15:05):
the safest route if you're gonnamake money off of it, yes, I
think so.
Yeah, I might be wrong, butthat's what I was reading on.
I was like, oh, because,because, oh, yeah, airbnb and
stuff like that.
But it's like there's there's,depending on where you're at,
there's regulations on that.
So that's something to thinkabout.
When you're like, oh, I'm goingto buy like a lake house and
build something in the back andAirbnb every once in a while,
(15:28):
it's like, ooh, just make surethat you're able to build that
ADU and use it as that type ofproperty.
Speaker 1 (15:35):
Yes, so I'll get into the gym.
(16:03):
So I was watching, I'veactually watched the
episodeskirts of Seattle and sobasically, california adopted a
bill and it basically is signed.
They're actually working ontheir, their regular date
regulations and everything inall the districts here in
California and it's a assemblybill 1033.
In California and it's AssemblyBill 1033.
So what 1033 does is with theADUs.
Is it basically aftereverything is done?
(16:25):
You know, all the I's dot andthe T's are crossed, that ADU is
going to be a living space, aswe know.
But the part about that ADU isit's it's going to be broken
down to another parcel.
Yeah, and when it breaks downto another parcel you're like,
oh okay, you're helping out theeconomy and everything and the
(16:47):
housing industry, but thegovernment's going to get there
because they're going to tax youbecause it's a different parcel
number than the house.
Yes, and I was like, wow, that'scrazy, you're helping it out,
but still, the government'sstill going to get their money.
Speaker 2 (17:02):
Oh yeah, speaking about the government, a lot of
people think, oh, I'm going tobuild an ADU onto my house, a
granite house.
What happens to my propertyvalue?
The overall property value isgoing to go up.
But I believe when you build anADU, it's its own, like you say
, say, its own parcel, so it'staxed separately from your house
(17:23):
.
Yes, so they're both gonna gettaxed, like?
the government's gonna get theirmoney, yes, but you're not
gonna say your house is worth300k.
You, you build this adu.
Now, overall, your wholeproperty is worth like 400k.
You're not gonna get taxed on400k.
You're gonna get taxed on 300kat this house and 100k there,
which is, you know, I'd ratherget taxed on little sections
versus the overall value.
(17:43):
Um, but yeah, that's, that'sanother thing to think about too
when you're doing your taxes.
But because they're twoseparate parcels, you got two
separate, two separate um.
If you're making money off youredu, you have deductions on
that, and you had deductions onyour house if you have a
business, if you're if you don'thave a business or are using
(18:04):
that house as a property, arental property or something
like that, you know you might be.
You might be losing money, Ithink.
Speaker 1 (18:11):
Yeah, and I view it like you know.
The government was going to,you know, put their hands in and
like oh this, but this is goingto happen too.
Speaker 2 (18:26):
Yeah, there's a grant too.
You see, you hear about thegrant.
No, I did.
The grant is a forty thousanddollar grant.
It helps to help with thehousing market and stuff.
A forty thousand dollar grantto help.
Um, it doesn't help you buildan adu, uh, you know a unit, but
it helps, uh with like pre-cost.
So like, uh, if you need a landsurveyor to put property down,
they'll help pay for that, umclosing costs, fees, um permits,
uh things of that nature.
But the actual like buildingmaterial costs and stuff like
(18:46):
that, you, that's out of yourpocket.
Oh, but yes, for it's 40k.
It's a grant, you have to applyfor it.
There's a lot of uh things youhave to get checked off, just
like buying a house, you know,you got your inspections done.
You gotta get all this done, um.
But once it's, you apply for it, it's basically like um, it's
up to 40k so you might getthings help help pay for it now.
But it's what helps with the uh, the housing crack, uh, the
(19:11):
market right now.
That's what the grant's for.
It's like oh, we want toincentivize it so you can get up
to 40k or something like that.
Yeah, I got.
Yeah, I looked it up and I'mlike oh, that's pretty that's
legit right there.
Speaker 1 (19:22):
So if anybody who wants to get an adu, and
especially in the state eightstates I was talking about, yes,
talk to a financial advisor andsee what it is because, like I
said, because each state isdifferent, with the regulations
and grants and stuff and thenand the gentleman said that in
about well, I watched about amonth, month and a half ago and
probably in about 10 months, the, especially here in a month,
month and a half ago, andprobably in about 10 months, the
(19:43):
, especially here in Californiathey're going to structure it
for the, for the parcel number.
So they're, they're gettingeverything in order.
So when, if people want to um,I think further out or I don't
know if they would have tobacktrack, but they're going to
have it where those ADUs, thoseare parcels too.
So that's good to know, becauseyou don't want to think that,
(20:05):
oh, I'm going to make this andI'm just going to make all this
capital right here.
No, the government's going toget their money too, they're
going to get their money.
Speaker 2 (20:10):
Yeah, they're going to get their money too you just
got to know how to structure itto where you're going to get the
maximum income benefits for youwith tax deductions and stuff
like that, because they're goingto get their money.
Whatever money you want to make, they're going to make too.
So, yeah, all right.
Speaker 1 (20:24):
For sure there's like yeah, we, if we're going to do
this, we need to get a certainpiece of that pie also.
Speaker 2 (20:30):
Especially if they have grants and stuff to help
you.
Speaker 1 (20:32):
Yes.
Speaker 2 (20:33):
You know, uh, yeah, going to help us for sure.
Speaker 1 (20:37):
I'm glad you said it, because knowledge is power.
Probably a lot of people don'tknow about the grants.
Speaker 2 (20:42):
Yeah, it's crazy, because I started looking up,
going to his podcast, I was like, oh yeah, what's an ADU?
And then I was like, what is it?
Okay, I know what it is now Allright.
First question.
I was like all right what tax?
benefits Exactly.
What benefits do I get out oftaxes?
Yeah, and then how do you goabout doing it?
And they'll start popping uplike you benefit just like a
rental property.
No way.
(21:03):
So not only do you have thebenefits of a rental property
depreciation, constructionmaterials, all that good stuff,
it's right there in yourbackyard.
It's pretty nice, I mean,especially if only if you're, I
guess you rent someone that youwant clothes like that you rent
(21:24):
someone that you want close,like that, but yes, so yeah,
those.
Speaker 1 (21:25):
That's what adu is and I hope that it does help out
with our housing economybecause, man, it right now it's
just, it's just going bad rightnow.
It's going really bad right nowbecause you gotta think um
interest rate.
Interest rate, they say thatit's.
It was supposed to go down fourtimes this year.
Speaker 2 (21:41):
Yeah.
Speaker 1 (21:41):
It hasn't gone down once, and they projected that
it's going to go down inSeptember, but that's neither
here nor there.
We don't even know.
Speaker 2 (21:50):
The last interview they asked him straight up like
so is it going to go down?
Is the interest going to godown?
Obviously they never do.
The government was like we arelooking at the numbers.
Speaker 1 (22:03):
Like we all know what that means exactly.
Speaker 2 (22:04):
You look at, it's not going nowhere, yeah but even
then, right, even then, even ifthe market goes down, if the uh
interest rates go down, yourhouse, your house prices right
now are all jacked at like 23.
So your 300k house right nowthere's no one selling a 300k
house right now that their houseweren't worth like 250 or
something, or 250, 275 a coupleyears ago.
(22:27):
Now they're like 300k.
It's like dude, that's like a275 000 max house.
Now you're at 300k.
So if your house is all right,300k and that's over what I
think is you know, know, housesalready cost.
When interest rates go down,that house price is going to
jack up again.
Yeah, like it always has.
(22:48):
If interest goes down, houseprices go up.
Speaker 1 (22:54):
House prices go down, interest rates go up.
Speaker 2 (22:54):
I mean, it's just a roller coaster when it comes to
all that, yeah, and we'll alwayssay I should make a shirt that
says if you can afford it, goget it.
Speaker 1 (23:02):
Exactly right.
Speaker 2 (23:03):
If you can do the numbers and it works for you,
just go get it.
Like, if you can afford it, goget it yeah.
Man, if you can buy a houseright now and you lock in a good
price or decent price and theinterest rates do go down or
eventually go down, hopefullythen you can refi and put your
money back out.
If you depend on how muchequity you have into it and you
(23:24):
know.
Speaker 1 (23:24):
You know all the change because, like man, shoot
when we was, when we was younger, shoot they used to say, oh
yeah, it was great when interestrates was 16, 17 percent.
We're looking at them sidewayslike what?
Speaker 2 (23:34):
yeah, the houses were like 25 or 25, 50k.
Yeah, for a super nice brandnew house 50, 60k yeah of course
it was up 16 something K likeright now, but the medium income
, right Like back in the daysversus now, you know, I think
now the medium income for anaverage person is anywhere from
like 30 to 50K, right.
(23:56):
So how can you afford a 300plus thousand dollar house?
Versus back in the day theincome was like $10,000 to
$20,000 a year.
So, of course the numbers areinflated.
We have inflation in the market.
Covid really swung a Changed up.
Speaker 1 (24:16):
Yeah changed up things right there, changed the
world on everything.
Speaker 2 (24:21):
So yeah, that argument, I think it's been
debunked.
Speaker 1 (24:24):
Like oh yeah 16, whatever.
Speaker 2 (24:27):
I have a 3% interest rate, but my house is worth it.
Yeah, I got a 3% interest rate,but I still had to pay the
money to get the house.
It was over budget when Ibought my house.
But yeah, I got 3%.
So yeah, but I would alwaystake lower interest rate with a
high house price becauseinterest rates is going to kill
(24:49):
you.
Yes, because you buy a housefor $100K or $50K a $50K house
with a 25% interest rate.
Oh, my goodness, you're payinginterest for the first 20 years.
Yeah, yeah, you haven't eventouched the principle yet, yeah
so yeah, but yeah, depending onhow you want to do it.
If you want to pay your houseoff soon, then uh, high or low
(25:11):
interest.
High interest rate would bebetter because your parents
gonna be lower versus uh.
If you want to pay house offway, way later, then you want a
lower interest rate and then umpay up high up front of the
house price yeah that's exactlyright, yeah, so yeah, that's
what it is with the ADUs.
Speaker 1 (25:30):
I hope it works out for the best, especially for our
country when it comes to this.
So to get this housing, thishousing industry, in check,
because right now it just it'sjust going wild right now.
Speaker 2 (25:42):
Oh yeah.
Speaker 1 (25:43):
So yeah, thank you, bro, for coming on the 20th
episode.
Speaker 2 (25:47):
Yeah, man.
Speaker 1 (25:47):
Can't wait till I get to the 200th episode.
And if anybody wants to jointhe Professor's Real Estate
Podcast, right now I'm.
I'm.
I'm redoing my website, sothat's down temporarily, but you
can email me at real estateinvesting, at the
professionalistinfo, and thenI'll.
(26:09):
I'll respond to your emails andeverything.
Yeah, rather than that, it wasa good one.
Thanks for coming on, bro.
Speaker 2 (26:17):
Yeah, man.
Speaker 1 (26:18):
All right, you have a good one.
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