1. Can you tell us about your background and what you do for work?
Absolutely, I reside in Manteca, California. I’m a superintendent for a construction firm in Sacramento. I’ve been doing construction for the last 15 years. Specifically in structural concrete. I’ve been in the concrete industry for a while now. I came from Madera, California. It’s a small little town, right next to Fresno.
My first superintendent job was in San Francisco with the Nibbi brothers, a big General Contractor, they do multi-family housing. I was working for their self-perform division, doing all the concrete work for all the affordable housing in San Francisco. I remember a while back in 2015-2016. There was a huge fire right next to the ballpark in San Francisco, it came up on the news. Anyways, our project was right across the street from that job. And we were out there on the seventh floor because that was as far as we got up to the deck, and we were worried that the fire next door was going to catch all the wood on fire, it was it was a big thing back in that time. And you know, I was able to experience all of that, but anyways, yeah, I do construction. More on the concrete side, I have a little bit experience with drywall and painting, and some metal framing, but most of my experience is in the specialty of structural concrete.
2. What led you to embark on an ADU Journey?
The way it started was I think back in 2017-2018. My friend called me up and asked me, hey, I bought this piece of land out here, I’m renovating it right now and I plan to build a house next, you know, a single family house next to this one, that I can live in. He said then, in the future, it’s going to be rented out.
I was like, right on. So he asked me if I wanted to do the concrete work on the foundation, so I went out there, he had the plans and everything approved, he even had the funding.
We finished the foundation, then my other friend came in and did the framing, and my other friend came and did the electrical. Most of our friends are in the trade, we have friends that do every single trade that you need. This advantage helped my friend out a lot because everything was at a low cost, specially with an owner-builder permit, when you have those friendships. He didn’t have to hire a general contractor.
As soon as finished that house, he lived in it for maybe like six months, then he rented it out, and moved back into his original house. And then he built it excellent. So we ended up building the bigger house. And when we built that house, we were, we did the same process again, we we built the foundation. Again, our friends came in, did the framing, electrical, and got it done. And then he ended up running both of the previous properties. That original one, the one we first built the new single family house. And now he lives in the big mansion, which was a 3000 square foot house. And it was custom made, custom built. So there was there was some experience there with that, I saw that I saw the cash flow that he was making. He introduced me to some of the some of the guys that he used to help him you know, fund some of the, the money to build those houses. And you know, from there, I was like, You know what this is? This is this is this is a good way to make some passive income because, like, we have the same friends. I know how to do the concrete. I can save a huge amount of money. I need to do this. And that’s kind of the direction I headed. I headed towards building an ADU.
My friend saved a lot, most of the money was in the concrete because concrete it’s awfully expensive. But he being owner-builder was able to know where all the money was going. That’s how he saved. He saved on material, he saved on labor. He saved a huge amount. And he knew exactly where all his money was going. Versus when you hire a contractor and you don’t know where all the money is going, it’s a mystery. Yeah! You know, there’s some profit there. But we were able to make it and he was able to save and he was able to be successful on building those houses and getting them rented out.
-Hector: All right, and Victor, the picture that you’re showing right now that I can see on your screen, is that the ADU that you built for yourself?-
That was my first actual ADU. What I did is there was a main house in front of that ADU and that was the main house that I purchased. And while I was living in that main property, that’s what I was actually building for a friend of mine these properties, these single family houses. So this was my Testing Zone, I was able to say hey, okay, this is what I want to do. I think this is a good spot right here, because of the interest rates and the prices of the cost of living were high and prices of homes right now are high. I thought, this is the best way I can save a huge amount just like my friend, I can do majority of the work get most of the material from work. So I was able to build this ADU with all my friends, the same friends he has, and myself too, and get it done. So that was my first step. I took the approach and started, you know, going after it.
-Hector: That’s an amazing use of all your skills, Victor. Yeah, that’s just impressive. And so can you talk about you already mentioned how all your friends basically help you out in building this? I’m guessing you had friends with plaster. You and some others place the windows. Your friends did electrical What about waterproofing? Or is there anything that you actually paid a stranger to do?-
In this case, the only stranger that I paid was the AC. There’s a mini split system there. I was the only person that I didn’t know that was recommended by one of my friends to do other NAT. Okay, the whole entire ADU was built from guys I know there and you know, within my circle, okay. Yeah.
3. What were the biggest challenges you faced, and how did you overcome them?
The main first thing that came across that was like a huge barrier, was PG&E. So, I learned that as soon as the drawings are approved, you have to get with PG&E and coordinate, because I wanted a separate meter. So, a separate meters is a separate address. That was one thing that became an issue because I was already done with my ADU and I was waiting on PG&E because their lead time was a couple of months out; that ADU only took me about two and a half months, three at the most to build and then I was waiting on PG&E.
-Hector: You said you built this in three months?-
Yeah it took me about two and a half months, three months after I got the drawings approved. Yeah, it went really quick. But PG&E was one thing that held me back because I had to wait. and also there were additional fees. I wasn’t aware of that, and I had to pay them. It was just a learning experience with PG&E, you just got to follow rules, and you know, just get ahead of it. That’s kind of like the first thing I will do on the next one, for sure. Because I have to get a hold of PG&E as soon as those drawings are approved.
-Hector: All right, and then, besides PG&E, for example, any issued with setbacks on city related items? Because this project is located in Manteca, CA, right?-
Manteca, okay yeah, it was right in front of the school. And I had like, no issues with the city. Well, I’ll tell you this, the architect/drafter that I hired to design it, he dealt with the city, so, I paid him to take care of the paperwork and all that, but with the city, it was smooth, I didn’t think it was that easy. I mean, super easy. So, it was super easy, because for their approve, they came in and inspected every single line item and the inspector approved and passed every inspection. No problem. So, yes, city Manteca, no issues.
-Hector: Perfect. That’s, I mean, I’ve never talked to somebody that did a project in Manteca specifically. But, you know, everything I hear is problems with cities everywhere in California. So I’m glad to hear that in Manteca things are going pretty well, and that you actually hired somebody that managed this so well. Yeah.-
I was able to take control of the matter you know, managing all the coordination, everything from the materials to…you know, the sequence of, okay, this comes first, here comes the next trade and try to have them overlap. So, because the the building footprint wasn’t so big, I was able to organize this. Because is that a lot of my personal money was going into this. I had to make sure that everything was organized, and there was no time wasted. And that’s what made it easier because the guys that helped me build this had actually done it before for my friend, like I said, on his single family houses, where it went through the inspection process and all that, so they already had experience, you know. I actually got a compliment from the inspectors, say, hey the guys I heard did a really good job. You know, their work. Yeah, the city of Manteca, no complaints, no issues. It was a smooth process.
I was expecting like being called out. Oh, man. I was like, the day. I mean, oh, they’re gonna hold me back. They’re gonna want this, I’m gonna have to spend more money and blah, blah, blah. No, everything worked out good. The only thing that was a challenge was just PG&E.
4. How much is the rent on the ADU, what was your budget, and how did you finance it?
What happened was, I ended up moving out out of the main house and moved two houses down. I ended up renting the main house and the ADU. The main house, I’m renting it out for $2.800 USD. The ADU is renting out for $1,600 USD monthly. Regarding financing, half of the funds were from a loan, right. So, that loan is going to be paid off in four years, which is a lot better than a 30 year fix. So, after four years, I’m going to be collecting $1,600 USD or more, every single month, of just pure cash flow. So, I’m excited!
-Hector: Haha OMG, I’m excited for you man!-
Right now, there is some cash flow because the loan, there was a lot of money I had to put up myself, basically, half of the money. But after four years, the loan gets paid off, and it’s basically just cash flow. Right now, I am making some cash flow of almost $300 USD on just ADU. The total between the main house and the ADU is a total of $500 USD a month right now. It’s amazing! I was successful, and for my first one, it was good. Right now we’re looking into getting another property and repeat the same process.
-Hector: Yeah and now you have this little team of friends that know exactly what they’re doing.-
Yep, and that’s what’s going to make it so much easier. It always comes down to having the funds. If you’re a resourceful person, or have the means to get the funds, then you have no issue. I mean, everything’s good as long as you know what it’s going to take to build it, which I do. It’s just getting capital. That’s it. Once you get the money, you can build this, you can build a bunch of them.
-Hector: You are well on your way to a bright future, Victor. Can you tell us more about for example, the utilities, was that something that your friends helped you out with? Was that an expensive process? How did that portion of the work go?-
Regarding utilities, the ADU it’s all electric. There’s no gas in there, it has it’s own meter. However, it does share the water with the main house, but the electrical has its own address, on its own meter panel going to the ADU. Also, most of the work, my friend is an electrician. He helped me to to put all the electrical work in there and to do all the trenching too, put the line in and get it all set up. Down the road, they’ll be able to connect their own Wi Fi or internet there, And it’s going to be its own entity.
5. How has this impacted your life and the lives of the occupants that are there right now?
This has impacted me a lot. And when I say a lot, it’s impacted me in a good way financially. But at the same time, the responsibility of being a landlord, being able to maintain the property. In the future, I’m going to rely on property managers because that’s a lot of work. Luckily, The ADU it’s a new structure. So there’s no issues, no troubles or anything like that. The main house though, it’s a little bit older, built in 1976. it’s a constant that you have to be aware of, you have to be able to do all the maintenance, even if it’s at eight o’clock at night, and it has impacted me in a good way. And also in a bad way, I should say, but in the long term, it’s going to be a gold nugget.
-Hector: Was it hard for you to find renters?-
Believe it or not Hector, the day I was finishing up, I had a line of renters. There was no issue there. I had so many people, and I had to weed them out. It’s like, okay, okay, who’s this? and then just went through and found a family that had to be them, you know, the mom, the grandma. The grandma lives in there with the grandpa, and the younger family, a mom and dad, live in the main house with the kids. So, I was able to rent it out, and something thing that made me feel good was that the house that they were living on before they came in here, they were renting a house that was going to be sold, and I was able to help them out and get in. I haven’t had no issues with them. So, I’m knocking on wood, because it’s been good so far. Oh, man. I hear the stories.
-Hector: Haha, it sounds like a lot of good things have happened to you lately Victor, yeah!-
I think God, but everything is working out so far, but it’s not easy, for sure.
-Hector: Yeah it’s not easy, but I mean, having a good construction team, that’s like a huge thing, and also that you’ve rented out the unit.-
Yes, it’s good! And I want to do it again. I got my kids too, they’re on board. We are looking for next investment, and we’re just going to build back another ADU.
-Hector: And your approach now is developing on your own and not building for clients, right? That’s were you are going?-
Yeah, I’m going to keep building for myself. And if people want somebody that has been through this process and need help, I’m willing to help them. I’m a concrete contractor as well and I have a license. I can do all the concrete, I can set up the manpower to help with all the different trades, but at that point I would be on the side of a contractor. So I would look for profitability too, you know.
-Hector: Yeah for sure, you’re open both ways, but mainly going the development side.-
Yeah I am open, I prefer to do my own stuff, just to keep me going.
6. What advice would you give to someone considering building an ADU on their property?
The best advice I can give anybody is to make sure to secure the funding. Funding is the biggest thing. I was able to get only half of the funding, the other half, It was partially my savings and partially me making it basically check to check. Having the funding is a big part to finish From the start and to finish your Accessory Dwelling Unit.
Other than that, PG&E is the other challenge ahead. Those are the two things that I ran across that I would advise people to make sure they have locked down.
-Hector: Did you know how much was it going to cost to build the ADU?-
I had an idea. I came up with the number of $70,000 I was able to get $50,000 with a loan, but the ADU ended up costing me pretty close to $95,000. I was able to finish it, but I had to use my funding. My next thing would be to make sure to get some secured funding first, and maybe start looking to some resources for some investors to help me with future projects.
-Hector: Amazing Victor, Thank you very much, I appreciate your time. This is an amazing success story.-
I appreciate you having me, this was Fun! It was cool. I have another one Hector, is adujourney.com your website? I started looking at it, I saw you have some resources for contracting?
-Hector: That’s right! It’s a professional network, there’s designers and contractors, there are also a couple of companies that do title 24. It’s an ADU professional network, and we aim to keep growing!-
Right on! Well, thank you for having me, Hector.
-Hector: Thank you Victor, have a good one!-
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