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#51 Building Wealth with ADUs: Jack’s San Pedro Success Story · Own More Doors

• 0:00
  SPEAKER_01: If you're an apartment owner and you've been thinking about building an ADU, but you're not 100% certain if it's the right idea, today's interview with Jack Patel is going to be all about taking his fourplex, why he added an ADU to it.
• 0:12
  SPEAKER_01: So we're going to give you a lot of information, a deep dive.
• 0:14
  SPEAKER_01: We're going to hop right into it.
• 0:15
  SPEAKER_01: Hi, I'm Juan Weezar.
• 0:17
  SPEAKER_01: This is Jack Patel.
• 0:18
  SPEAKER_01: And so today we're going to be talking about Jack's new investment.
• 0:22
  SPEAKER_01: Well, Jack bought this a couple of years ago.
• 0:23
  SPEAKER_01: It was a four-unit building in San Pedro.
• 0:26
  SPEAKER_01: We're going to take it from the top, learn from Jack what he learned during this process, what he's up to now.
• 0:32
  SPEAKER_01: I'm excited.
• 0:33
  SPEAKER_01: I'm honored that Jack has joined Sage Real Estate.
• 0:35
  SPEAKER_01: Jack comes with a tremendous amount of experience, not just as a broker, but as a real estate investor.
• 0:40
  SPEAKER_01: So to me, that means a lot.
• 0:42
  SPEAKER_01: That means when he's helping our clients, he's working with you.
• 0:45
  SPEAKER_01: He's someone who doesn't just talk the talk, he walks the walk.
• 0:49
  SPEAKER_01: You know, there's a lot of brokers out there, multifamily brokers, and unfortunately, they don't own anything.
• 0:54
  SPEAKER_01: So it's kind of tough to me to take them seriously when they're they're not invested.
• 0:59
  SPEAKER_01: Like, no skin in the game.
• 1:00
  SPEAKER_01: Jack is the complete opposite.
• 1:02
  SPEAKER_01: Skin in the game work inside of his newly built ADU, which looks gorgeous.
• 1:06
  SPEAKER_01: So congratulations, by the way.
• 1:08
  SPEAKER_01: Jack, so let's take it from the top.
• 1:10
  SPEAKER_01: When did you buy this?
• 1:11
  SPEAKER_01: Why did you buy it?
• 1:13
  SPEAKER_01: Tell us all about it.
• 1:14
  SPEAKER_00: So thanks, Juan.
• 1:15
  SPEAKER_00: Um, I bought this in November of late 2023 of November.
• 1:20
  SPEAKER_00: Uh, the reason I bought this was I have a few other properties here in San Pedro and just saw an opportunity, so I, you know, went ahead and picked it up.
• 1:29
  SPEAKER_00: Um, came turned out to be really good.
• 1:31
  SPEAKER_00: It was built in 1986, so that was one of the main reasons.
• 1:34
  SPEAKER_00: If not a lot of people know, this is San Pedro is covered in City of LA rent control.
• 1:39
  SPEAKER_00: So anything prior to 1978, you fall under City of LA RSO, where this housing authority tells the landlords how much they can raise rent.
• 1:48
  SPEAKER_00: If anything after andor newer of 1978, which this property is, you fall under state rent control, which is AB 1482, which is 5% plus CPI, you can raise every year, which this year is 5% plus 3.89, 8.89%.
• 2:06
  SPEAKER_01: Now, now, Jack, when you tell us you just picked us up, picked us up.
• 2:09
  SPEAKER_01: I mean, like, okay.
• 2:11
  SPEAKER_01: You're you're in the San Pedro market, you're watching it.
• 2:14
  SPEAKER_01: I don't necessarily watch the San Pedro market.
• 2:16
  SPEAKER_01: I don't have any investments here.
• 2:17
  SPEAKER_01: So I don't have a lot of stake in San Pedro, although we've had helped our clients in the past.
• 2:24
  SPEAKER_01: So you looked at it because it was built past a certain time and it wasn't going to be restrictive on the rent control.
• 2:30
  SPEAKER_01: So, okay, so that's great.
• 2:31
  SPEAKER_01: Um, how long was it on the market?
• 2:33
  SPEAKER_01: Were there other offers?
• 2:35
  SPEAKER_01: How what type of negotiation did you and what type of financing did you did did you have to get to buy this?
• 2:42
  SPEAKER_00: That was a little creative financing.
• 2:43
  SPEAKER_00: So this property was on the market, I believe it was what, a hundred and I think 60 days or something like that.
• 2:51
  SPEAKER_00: Uh don't quote me on that, but it was something around that.
• 2:53
  SPEAKER_00: But it was it was listed at a certain, I think 1.4.
• 2:56
  SPEAKER_00: Then the the broker brought it down to 1.2, and I got it in escrow at 1.1, which was 1.150, sorry.
• 3:05
  SPEAKER_00: But at that time when he did the sec the first uh price reduction, there was multiple offers coming in.
• 3:11
  SPEAKER_00: I just happened to be looking in the market, kind of following a couple of properties, and reached out.
• 3:16
  SPEAKER_00: I guess a day before he was flooded with other offers, and the buyer or the seller accepted my offer.
• 3:22
  SPEAKER_01: So it and I would say it's typically not that easy.
• 3:26
  SPEAKER_01: I mean, you you probably were persistent, you probably let them know, like, hey, out of all these offers, choose choose buying.
• 3:31
  SPEAKER_00: Right.
• 3:32
  SPEAKER_00: So there was a there were a few offers.
• 3:34
  SPEAKER_00: The reason he they chose mine was um it was a cash offer.
• 3:40
  SPEAKER_00: Now, with the cash offer, there was like I say creative financing.
• 3:44
  SPEAKER_00: Um I I took the loan out of my house to put a pro so when you're talking about being invested, uh, I've had a very low uh debt on my house, my primary residence, and I saw this opportunity, so you know, convinced my wife, like, hey, let's let's move on.
• 4:00
  SPEAKER_00: This so I refinanced, I had the cash in hand, had some savings, and we just went all you know, went all in.
• 4:06
  SPEAKER_00: Um I was gonna get a little bit of hard money loan to cover the portion of it because I didn't have the full amount.
• 4:13
  SPEAKER_00: But what worked out was when I got into escrow, and a lot of a lot of owners and you know, brokers don't even do this.
• 4:20
  SPEAKER_00: I was checking all the building records.
• 4:22
  SPEAKER_00: I mean, that's just what I do uh being an investor.
• 4:24
  SPEAKER_00: So I found that the occupancy permit for this property when it was built, it was four units plus a rec room.
• 4:33
  SPEAKER_00: And I thought I was buying five units, five legal units, which I wasn't.
• 4:37
  SPEAKER_01: Yeah, so let me so let me give some some color behind this.
• 4:41
  SPEAKER_01: So this is common.
• 4:42
  SPEAKER_01: So it was legally a four-plex when it was built, that's fine.
• 4:46
  SPEAKER_01: And there must have been some additional space here, right here.
• 4:50
  SPEAKER_01: And they got it permitted as a rec room.
• 4:52
  SPEAKER_01: So a rec room just means that um, hey, maybe it's gonna be like the man cave, maybe it's gonna be a playroom, maybe it's gonna be a library, but the city permits it, but not to be habitable.
• 5:04
  SPEAKER_01: Correct.
• 5:04
  SPEAKER_01: Unhabitable space.
• 5:05
  SPEAKER_01: Yeah.
• 5:05
  SPEAKER_01: So so you could so we we sell a lot of buildings where there's always a rec room.
• 5:10
  SPEAKER_01: But what ends up happening is the rec room was approved at one point, and through the years, owners will make it into an unpermitted unit, which was what Jack had discovered through his research.
• 5:22
  SPEAKER_01: So so then they marketed the property as five units, and that's where they made an error, right?
• 5:28
  SPEAKER_01: So that's a mistake.
• 5:29
  SPEAKER_01: So, like, well, you they should have said four units with an unpermitted rec room is what they should have.
• 5:36
  SPEAKER_01: Well, the rec room was permitted, but the they shouldn't have marketed it as a legal five, and that's where Jack was able to find an issue with their property.
• 5:45
  SPEAKER_00: Yeah, so yeah, you know, in fairness to the broker that was listening, um, he didn't know either.
• 5:49
  SPEAKER_00: He was told by the owner, and the owner was adamant because when they bought it, it was a one-one where we're standing.
• 5:56
  SPEAKER_00: Uh, but anyways, long story short, I was able to get a little bit more uh reduction on the purchase price by negotiating that because it was a four unit at the time.
• 6:04
  SPEAKER_00: But it wasn't just that.
• 6:06
  SPEAKER_00: There was uh a lot of deferred maintenance on this, a lot of major systems, electrical, the roof had holes in it, um gas, well not gas, but um the units itself, they were just really dated.
• 6:19
  SPEAKER_01: So what Jack was able to do is put it in escrow, and and once he found out through the investigations that the property needed more work, one of the units was legally unpermitted, he was able to renegotiate um to a more favorable price.
• 6:35
  SPEAKER_01: Correct.
• 6:36
  SPEAKER_01: So, so Jack, so so you bought a cash, and I can't believe you convinced your wife.
• 6:41
  SPEAKER_01: So talk about risk taking too too.
• 6:44
  SPEAKER_01: I mean, guys, like and I know sometimes people think, oh, it's easy.
• 6:48
  SPEAKER_01: It's not easy, because I'm sure he was scared.
• 6:50
  SPEAKER_01: I'm sure, I'm sure his wife was scared.
• 6:51
  SPEAKER_01: Like, I can't believe here we've almost paid off our house, and you're gonna put more debt on the house, is essentially what he did.
• 6:58
  SPEAKER_01: Um, but in a way, I respect it.
• 7:00
  SPEAKER_01: Like, I respect people that are doers, people that are taking risks.
• 7:04
  SPEAKER_01: And so, and so now walk us through.
• 7:06
  SPEAKER_01: You've you've closed the escrow.
• 7:08
  SPEAKER_01: I'm sure it had tenants, I'm sure it had probably low rents because it had deferred maintenance.
• 7:14
  SPEAKER_01: How did you work with all that?
• 7:16
  SPEAKER_00: Oh, well, because you know, but let me go back to that point where Juan was saying, taking a risk.
• 7:21
  SPEAKER_00: I didn't my loan that I got for my primary wasn't 3.2, wasn't four, wasn't even five.
• 7:28
  SPEAKER_00: We were at six, we're at six point eight.
• 7:31
  SPEAKER_00: So I got it at the high, you know, 2023.
• 7:34
  SPEAKER_00: We were at the high, the peak.
• 7:36
  SPEAKER_00: So that was a big risk on our part or my part, you know, doing this.
• 7:41
  SPEAKER_00: Um, but I kind of had the vision that, you know, this this will come out as as it is now, and you'll you'll get to see the whole property.
• 7:47
  SPEAKER_00: But um what happened with the tenants?
• 7:50
  SPEAKER_00: So, you know, you always hear these stories with landlords and tenants, and they're you know, they they're horrific stories, or you're kicking picked people out or you know, taking away from where they're living.
• 8:01
  SPEAKER_00: No, they're not all like that.
• 8:02
  SPEAKER_00: Let me tell you how this story went.
• 8:04
  SPEAKER_00: Owner owned this property for a long time.
• 8:07
  SPEAKER_00: Uh, just was, you know, didn't have enough money to keep uh upkeep with the property as costs went up.
• 8:13
  SPEAKER_00: So owner wanted it, but had a lot of equity, but he wanted to, or he and she wanted to get out and use their money somewhere else.
• 8:20
  SPEAKER_00: So they were able to sell the property.
• 8:22
  SPEAKER_00: They moved their finances or their money to out of state, which you know, now they're happy.
• 8:27
  SPEAKER_00: We had three uh three tenants here out of the four or five units at the time, or the you know, the unpermitted unit, but two of the tenants, one they were gonna move to Vegas anyways, but they didn't have enough money for the rental or whatever they were gonna do.
• 8:44
  SPEAKER_00: So I was able to work out a cash for key for them, gave them some money to go move to Texas, or I'm sorry, Vegas, and they were able to get a find a place close to their family, put down uh the deposit and you know, go from there.
• 8:57
  SPEAKER_00: The other family, they were they wanted to buy a house.
• 9:01
  SPEAKER_00: Um, so we were, I was able to also offer them uh cash for keys, um, and they use some government programs to get down payment assistance and an FHA loan, and they were able to go get a house.
• 9:14
  SPEAKER_00: Great.
• 9:14
  SPEAKER_00: So and the third tenant, they loved this place.
• 9:18
  SPEAKER_00: They wanted to stay here, they just wanted to stay in an they they haven't stayed in a newly renovated anything, house, uh, apartment or whatever.
• 9:27
  SPEAKER_00: So I kind of felt I said, you know what?
• 9:29
  SPEAKER_00: If you guys just let me, you know, the first available unit that I have, if you guys are more than willing, I'll move you into it.
• 9:34
  SPEAKER_00: And they're happy.
• 9:35
  SPEAKER_00: They they stay, they you know, they went, you know, went through all the construction, they stayed on site, and now they're in a brand new apartment built uh apartment unit they weren't able to qualify for later on earlier.
• 9:47
  SPEAKER_00: So they're still living here, they're still living here.
• 9:49
  SPEAKER_01: So so this is what we call the tenant shuffle, which I I know we've learned from Cody Charnell, one of our agents, and and he's excels in it.
• 9:55
  SPEAKER_01: And so um Jack remodeled a unit.
• 9:59
  SPEAKER_01: The prior owner didn't invest a whole lot in making the property new, so he made one of the units new.
• 10:05
  SPEAKER_01: They already uh liked the building, loved the area, and so they got to stay here, but now the unit's new, and as you can tell, it's it's it's gorgeous.
• 10:14
  SPEAKER_01: He probably gave them a new kitchen, new counters, new everything.
• 10:16
  SPEAKER_01: And so it was a win-win for everybody.
• 10:18
  SPEAKER_00: It was a win-win for everyone.
• 10:19
  SPEAKER_00: So all these stories that you hear, you know, social media or news, they're not all true.
• 10:24
  SPEAKER_00: Everyone, you know, landlords need the tenants, tenants need landlords.
• 10:27
  SPEAKER_00: We're we're in harmony, and we, you know, we've tried to figure out a way to make this work.
• 10:32
  SPEAKER_01: And so, and so, Jack, so now you've talked to talk to us about the remodel and and also where does the money come from?
• 10:40
  SPEAKER_01: I mean, like, Jack, I mean, traditionally you don't come from a lot of money.
• 10:44
  SPEAKER_01: This is not coming from like your dad's giving you money and all these things.
• 10:47
  SPEAKER_00: I mean So um a little background about myself.
• 10:50
  SPEAKER_00: So my parents, you know, they were they were in the hospitality business, or we still are, but um, they you know saved a little bit of money when we leased a couple of hotels or a hotel they were working at for 28 years.
• 11:02
  SPEAKER_00: I was able to take that in 2014 and was able to purchase a hotel in Gardena um with owner financing, which I wouldn't I would never be able to be able to get it if the owner wasn't able to do that.
• 11:13
  SPEAKER_00: So I did that, and then my wife and I worked there.
• 11:16
  SPEAKER_00: We you know, we we turned that place around, it was dilapidated.
• 11:20
  SPEAKER_00: We did, you know, fixed it up and increased revenue.
• 11:23
  SPEAKER_00: And from there I was able to save some money and you know have a little bit of income coming in.
• 11:27
  SPEAKER_00: And then I got into real estate.
• 11:29
  SPEAKER_00: Um, I got into multifamily, I got into residential first, but then multifamily came when one of my residential clients said, Hey, I have this apartment building.
• 11:37
  SPEAKER_00: Can you sell it?
• 11:38
  SPEAKER_00: And I said, Yeah, of course.
• 11:39
  SPEAKER_00: And as I went through the process of selling, then I'm like, whoa, this is pretty, you know, this is a good, this is a good avenue, better than what I'm doing in residential.
• 11:46
  SPEAKER_00: And uh I liked this.
• 11:48
  SPEAKER_00: I like helping someone and we're creating, it's kind of the same thing that I was doing in uh hospitality, but it was more like, hey, I can help someone build wealth through apartment buildings, and even myself.
• 11:57
  SPEAKER_00: So that's how I got into it and had some money for it.
• 12:00
  SPEAKER_01: No, so that's perfect.
• 12:01
  SPEAKER_01: So, so talk to us about um the property needed a lot of work.
• 12:05
  SPEAKER_01: Right.
• 12:06
  SPEAKER_01: You worked everything out with the tenants.
• 12:08
  SPEAKER_01: Now you have a fixer, like a property that needs a lot of work.
• 12:11
  SPEAKER_01: Where did you start?
• 12:13
  SPEAKER_01: What did you spend uh and what did you do?
• 12:16
  SPEAKER_00: So the first thing is the after I closed escrow on the first date, I got the roof done.
• 12:22
  SPEAKER_00: Actually, during my my contingency period, I had one of my roofers that obviously through uh through real estate and being a broker, I had him come check it out.
• 12:30
  SPEAKER_00: He gave me a quote, and you know, he they do financing, which was great.
• 12:34
  SPEAKER_00: So I had him come and take because the roof had holes in it.
• 12:36
  SPEAKER_00: So that was number one.
• 12:37
  SPEAKER_00: I didn't want to get mold and stuff in here.
• 12:39
  SPEAKER_00: So he uh it was before luckily it didn't rain.
• 12:42
  SPEAKER_00: So he came and got everything done, you know, in about a couple of weeks, and we got the roof done.
• 12:47
  SPEAKER_00: So then we I another thing, let me tell you how to start an ADU.
• 12:53
  SPEAKER_00: I started the rehab in the units while I was getting my permits for the ADU.
• 12:59
  SPEAKER_00: I got the permits for everything, but we were starting to get the permits for this section here, and that kind of mess dragged things on.
• 13:08
  SPEAKER_01: So so before we jump into the ADU, so we have a lot of clients, a lot of people watching.
• 13:14
  SPEAKER_01: Um obviously, for those that are watching out of state, maybe the ADU is an accessory dwelling unit.
• 13:21
  SPEAKER_01: We've covered videos in the past.
• 13:22
  SPEAKER_01: I know not every state has it, but in in California, where we have a housing shortage, the state has made a way for us to add additional units to house additional families.
• 13:32
  SPEAKER_01: So that's so but why did you decide to do it?
• 13:35
  SPEAKER_01: Like uh because a lot of times people are like, hey Juan, what does it cost?
• 13:39
  SPEAKER_01: And is it gonna be worth it?
• 13:40
  SPEAKER_01: Like, is it gonna be worth the the headache of pulling plans and dealing with contractors in the city?
• 13:46
  SPEAKER_01: Like, why did you decide to do it?
• 13:48
  SPEAKER_00: Well, it's like your uh podcast, own more doors.
• 13:51
  SPEAKER_00: So I had a goal where I can do something here where you know it was four units and I can increase the value and appreciation.
• 13:58
  SPEAKER_00: Uh so that was my that was my intention from the you know the get-go.
• 14:02
  SPEAKER_00: Like, okay, first take the illegal unit, permit it, make it legal, and then add another unit in the garage as the ADU.
• 14:10
  SPEAKER_01: And so talk to us about the process um in San Pedro, like how long did it take?
• 14:18
  SPEAKER_01: What was the cost?
• 14:19
  SPEAKER_01: Did the cost go up from what you initially thought?
• 14:23
  SPEAKER_00: Yeah, so anything in construction, your budget is always gonna be higher than you expect.
• 14:28
  SPEAKER_00: Um, it just happens.
• 14:29
  SPEAKER_00: I don't know.
• 14:29
  SPEAKER_00: You can plan correctly.
• 14:31
  SPEAKER_00: So the process when I started was my goal was to turn the rec room or the unpermitted unit into unit.
• 14:39
  SPEAKER_00: And I had two garages where I was gonna make two units or two ADUs.
• 14:44
  SPEAKER_00: That was the plan that I submitted.
• 14:46
  SPEAKER_00: Um when it got to City of LA after three, four months.
• 14:50
  SPEAKER_00: City of LA, you know, technically takes a little, you know, traditionally takes a long time.
• 14:55
  SPEAKER_00: Uh so after three, four months, I finally got the plans back with red everywhere.
• 15:01
  SPEAKER_00: Like this was this, this, this.
• 15:03
  SPEAKER_01: Which means all the corrections.
• 15:04
  SPEAKER_01: All the corrections.
• 15:05
  SPEAKER_01: That means the plans you submitted were not good enough.
• 15:08
  SPEAKER_01: And here's what we don't like.
• 15:09
  SPEAKER_01: So that's when they bring out the red marker.
• 15:11
  SPEAKER_00: Right.
• 15:11
  SPEAKER_00: And then we then I had my architect and my consultant.
• 15:15
  SPEAKER_00: We went through it, we resubmitted it.
• 15:18
  SPEAKER_00: And that was so let me let me go back.
• 15:20
  SPEAKER_00: I started in February 2024.
• 15:23
  SPEAKER_00: April, end of April, so let's say May 1st, 2024, I got we got the first plans back with the corrections.
• 15:29
  SPEAKER_00: June 2024, we submitted it.
• 15:31
  SPEAKER_00: End of June, we got those back again with another bunch of red lines.
• 15:37
  SPEAKER_00: And but this time around, the plan checker told us, hey, you can't do two ADUs in a four-unit complex.
• 15:44
  SPEAKER_00: It's only 25% of the building.
• 15:47
  SPEAKER_01: At that at that point, at that point, the law only allowed essentially one based on how many units he had.
• 15:53
  SPEAKER_01: The law keeps changing.
• 15:54
  SPEAKER_01: Every year it keeps changing.
• 15:56
  SPEAKER_00: So at that time it was 25% of the existing units you have.
• 16:00
  SPEAKER_00: So if you have I had four units, 25% of that is one.
• 16:04
  SPEAKER_00: So long story short, that was kind of my fault on that.
• 16:08
  SPEAKER_00: I I kind of knew that, but I thought that, you know, with the new law that was proposed that came into effect January 1st of this year, where you can put multiple ADUs, I would be able to kind of piggyback on that beforehand and get it in there.
• 16:21
  SPEAKER_00: Well, I was wrong.
• 16:22
  SPEAKER_00: Um, so that took a long time to see.
• 16:25
  SPEAKER_00: So in July, I had to redo the whole plans and just do this unit.
• 16:30
  SPEAKER_00: But I was able to take, or we'll show you behind me, the small, I have two garages or had two garages.
• 16:35
  SPEAKER_00: There's a small garage behind us, and then there's a two-car garage, big one in the back of the building.
• 16:40
  SPEAKER_00: We were able to incorporate this small garage behind us into a bedroom, into this rec room.
• 16:46
  SPEAKER_00: So now I have a two-bedroom, one-bath unit.
• 16:49
  SPEAKER_00: Legal.
• 16:50
  SPEAKER_01: Yeah, and it turned out really uh it turned out really, really nice.
• 16:53
  SPEAKER_01: Sometimes I I go out to properties all the time and I could tell there was an ADU.
• 16:57
  SPEAKER_01: This one's really hard to tell.
• 16:58
  SPEAKER_01: You almost it's it almost blends in really nice.
• 17:01
  SPEAKER_01: Talk to us.
• 17:02
  SPEAKER_01: Our folks want to know how much did you pay for this?
• 17:05
  SPEAKER_00: So this ADU, after all the permits and plans and everything, it came, it was more than I budgeted because we had to do incorporate the garage and do the footing in the uh in the garage door.
• 17:16
  SPEAKER_00: So it's about 130,000.
• 17:19
  SPEAKER_00: 130,000?
• 17:20
  SPEAKER_00: Okay.
• 17:21
  SPEAKER_01: Um with material and labor.
• 17:23
  SPEAKER_01: Got it.
• 17:24
  SPEAKER_01: So so so now how much is the the door worth?
• 17:29
  SPEAKER_01: So it means if you spent 130, like what is what is it worth 300,000, 350,000?
• 17:33
  SPEAKER_00: This is probably about brand new renovated 86.
• 17:37
  SPEAKER_00: This is about 365 a door.
• 17:39
  SPEAKER_01: Okay.
• 17:40
  SPEAKER_01: All right.
• 17:40
  SPEAKER_01: So so he's into it for 130, but the added, the true added value is over 350,000.
• 17:48
  SPEAKER_00: Yeah.
• 17:48
  SPEAKER_01: So was it worth it?
• 17:49
  SPEAKER_01: You tell us.
• 17:50
  SPEAKER_01: Of course it's worth it.
• 17:51
  SPEAKER_01: So you would do this over again.
• 17:53
  SPEAKER_01: So if someone's watching and they're like, hey, I I want to do something similar to that.
• 17:57
  SPEAKER_01: You you've you've done it now.
• 18:00
  SPEAKER_01: You've you found the right deal.
• 18:01
  SPEAKER_01: You you know how to build them.
• 18:03
  SPEAKER_01: You you know how to do it here in San Pedro.
• 18:04
  SPEAKER_01: So City of LA.
• 18:06
  SPEAKER_01: Which so San Pedro, just for those watching, it unfortunately, and I would say unfortunately, San Pedro doesn't operate on its own as a city.
• 18:14
  SPEAKER_01: It's overseen by the city of LA, which is very restrictive, it's very big, and so things are delayed.
• 18:19
  SPEAKER_01: In fact, a lot of comments out there that it's one of the worst cities to work with.
• 18:23
  SPEAKER_01: But there's opportunities.
• 18:25
  SPEAKER_01: Uh Jack, I mean, if you had the chance, would you do this all over again?
• 18:29
  SPEAKER_00: Yeah, but I would uh look now I know how to do how to walk uh navigate through it.
• 18:33
  SPEAKER_00: So yes, of course.
• 18:34
  SPEAKER_01: Right.
• 18:35
  SPEAKER_01: So if anyone's watching and they're like, hey, I want to do a similar project, you know, I reach out to Jack and say, Hey, Jack, I saw you on the video.
• 18:41
  SPEAKER_01: Can you help me find something like that?
• 18:42
  SPEAKER_01: Jack's someone who's already done it personally, and and he's obviously invested in the area.
• 18:47
  SPEAKER_01: Um, we we are now in a position where Jack has decided to list the property.
• 18:53
  SPEAKER_01: Yes.
• 18:54
  SPEAKER_01: Okay, so sometimes people don't know, like, hey, I I finished the project, the units are vacant, I could now come in with the market rent, and you're now at the place where a lot of people want to be.
• 19:07
  SPEAKER_01: You've decided to sell the property.
• 19:09
  SPEAKER_01: Um what went behind that decision?
• 19:13
  SPEAKER_00: So, one, when I um when I when I bought this and then did all the work, my intention was I did all the work and everything behind this.
• 19:21
  SPEAKER_00: It was be a long-term hold because as you can see, it's hard to get to this position, yeah, having empty units and market rank.
• 19:27
  SPEAKER_00: But just like in real estate and being a broker and you know, an investor, another opportunity opportunity just came up.
• 19:35
  SPEAKER_00: And uh there's I wish I had more money.
• 19:39
  SPEAKER_00: Got it.
• 19:40
  SPEAKER_00: Okay.
• 19:41
  SPEAKER_00: All right.
• 19:42
  SPEAKER_00: So in order for so I'm gonna do a 1031 excuse, sorry.
• 19:45
  SPEAKER_01: Yeah, so so Jack intends to sell this because there's something he wants to buy.
• 19:49
  SPEAKER_01: Now, when he was going through all this and dealing with the issues and and and spending a lot of money and making it be what it is, and and new windows and new paint and all new kitchens, this is a process.
• 20:00
  SPEAKER_01: It's a lot of work.
• 20:01
  SPEAKER_01: Yeah, it's a lot of work.
• 20:02
  SPEAKER_01: It becomes ends up becoming a kind of a full-time job, just overseeing everything.
• 20:06
  SPEAKER_01: A building hits the market, Jack wants to buy it.
• 20:09
  SPEAKER_01: In order for him to buy it, he now needs to take the profits from this to be able to buy that.
• 20:15
  SPEAKER_01: And so sometimes, folks, like when you're looking at this, if he didn't take that initial risk to buy this, he can't buy this next one because that next one is really expensive.
• 20:25
  SPEAKER_01: And so it's it's baby steps.
• 20:28
  SPEAKER_01: You know, sometimes, you know, like I was talking to a client yesterday and it's and it's it's a it's a small duplex.
• 20:33
  SPEAKER_01: They want to buy her and her husband, they're gonna live in one and rent out the other.
• 20:36
  SPEAKER_01: And I said, guys, this is not your future.
• 20:38
  SPEAKER_01: This is not your dream home.
• 20:40
  SPEAKER_01: This is a step towards your dream home.
• 20:42
  SPEAKER_01: And just like in your case, this is a step towards your next investment.
• 20:45
  SPEAKER_01: And one thing I've always admired about you is that you look at real estate, but sometimes you're not buying real estate to rent it out.
• 20:52
  SPEAKER_01: Sometimes you operate the business inside of it, which I really like because it's another component.
• 20:57
  SPEAKER_01: I've never done that.
• 20:58
  SPEAKER_01: When I buy something, I lease it out and let someone take over.
• 21:01
  SPEAKER_01: Jack looks at it in almost like a double whammy, if you ask me.
• 21:04
  SPEAKER_01: He owns the real estate, and he himself, or him and his wife, or him and his partners come in and they operate a business out of it themselves.
• 21:11
  SPEAKER_01: So they're essentially leasing to themselves, which is another great way.
• 21:14
  SPEAKER_01: And we'll we'll keep interviewing Jack for different processes.
• 21:17
  SPEAKER_01: Obviously, today is about his four unit with an ADU.
• 21:19
  SPEAKER_01: And I've just I've been amazed on how nice the property is.
• 21:22
  SPEAKER_00: Yeah, it turned out well.
• 21:24
  SPEAKER_01: And so, and so just so you know, we've been on the market for less than a week, and and this morning we got uh we we got our our first offer on the property.
• 21:32
  SPEAKER_01: So, so so we're in a great position.
• 21:35
  SPEAKER_01: Um, and so if he wants to pursue that other one, he certainly can um because now he's in a position where if everything goes well, uh this one should be closing maybe 40 days from now.
• 21:44
  SPEAKER_01: Jack, I can't thank you enough for for opening up your property today, for uh being willing to kind of share your success, your story, the struggle, everything's perfect.
• 21:54
  SPEAKER_01: Uh, so we appreciate that very much.
• 21:56
  SPEAKER_01: Um, I'm gonna give you the final word.
• 21:58
  SPEAKER_00: Uh thanks, Juan.
• 21:59
  SPEAKER_00: Appreciate you coming out here and taking this uh interviewing me with Furthermore Property.
• 22:03
  SPEAKER_00: In the coming weeks, I'm gonna do a deep dive on this property, uh, going over the whole process from when I purchased it.
• 22:08
  SPEAKER_00: You know, you just got a glimpse of it.
• 22:10
  SPEAKER_00: But so yeah, I'll be doing a deep dive on this property.
• 22:12
  SPEAKER_00: And if you would like to learn more about that, you can follow me at my YouTube channel, SoCal Multifamily Insights.
• 22:20
  SPEAKER_00: Uh, that's SoCal Multifamily Insights.
• 22:22
  SPEAKER_00: And I'm broker Jack Patel on my Instagram handle.
• 22:25
  SPEAKER_00: It'll be uh posted on the bottom of this video as well.
• 22:28
  SPEAKER_00: And I look forward to seeing you and watch my videos on there and see if you like anything and learn something about that.
• 22:33
  SPEAKER_00: There you have it.
• 22:34
  SPEAKER_00: Jack, thank you so much.
• 22:35
  SPEAKER_01: Make sure to like, comment, and subscribe until next time.