Everybody's getting the deal.
Hello.
Very, very excited to have Don Mates here.
Welcome. Thank you so much.
Thank you so much for Don.
Let's talk about value adds, because you're also kind of the big topic now.
You know, there's different periods of time
where there are value adds and not value adds.
You know what?
What do you do, a go or no go on. Some of the value adds.
When do you decide?
Well, I think the first thing is because it's such a hot word right
now, people use it like in such a broad stroke.
And I just feel like it really needs to be defined
for me as a general contractor.
I believe that value add is adding physical value, adding
something substantial to the property, not just paint, not just, you know,
new staging furniture, but really some legitimate pieces
of square footage that can actually be appraised at a higher value.
And that's to me what value add is.
And so I get asked all the time, what do things cost,
where do we sit on that?
And especially San Diego is way different than Phenix or maybe in the Midwest.
Well, you're like the like the person everybody asks because you're like,
you're like a ga no go.
Like if we have a deal
and we don't know what it's going to cost, let's say at an 80, you,
you know, we have to go there and find out because that that's part of the
cost, right?
And you don't even know what the return is.
So it seems like the 82 market is really taken off right now.
You want to talk a little bit about that?
Yeah, the edu market is, you know, California is super hot and
it is in different parts of the country, but especially in San Diego,
because you already own the land, you're just adding more units
and there's something really magical about that.
And for me and to you is probably around 300
plus the square in San Diego right now.
That's good. Yeah.
You know, if you have that land already and you're just talking building.
Yeah.
So for for probably yourselves and myself,
that 300 plus square foot equates to about eight or $900.
A square foot after appraisal.
And that's just magical.
And I'm sure you see that here as well.
Not like those kinds of numbers, but but I do like that because if we take
if you build a thousand feet, that is 300 is three regret.
And then in San Diego you can rent that for how much
depends what the configuration is.
But like a21 80 U is almost 4000.
Okay, that's a hell.
And it is near the beach. So you have it kind of cool.
I know. I love that. Yeah.
I have a question about Adus, you know, because they actually are beginning to be
a thing everywhere, right?
Because yes, affordable housing and not having enough rentals.
How does one go about finding if they're able to put an ADU on their property?
Most municipalities and you have to check
most municipalities are green thumb for one, one and one.
In other words, a single family home.
You can add an 80 you at least where I am in SoCal
one is absolutely there's no question whatsoever.
You have to have the square, you have to have the space on the property
and you have to have, of course, the setbacks.
But they always allow at least one.
And there's also a thing called the junior Adu San Diego you can do.
So that would mean two.
And they're actually coming around more and more to the
I think there's a statewide law now that they can do many, many, many more units.
I don't know if it's in the decision making process, but so, for instance,
somebody can come in
with a single family home that they bought and had like a whole bunch more units.
But it's up to that municipality to decide That kind of overrides.
That's part of the zoning, right?
Right of the zoning. So where would they go, though?
Let's say you were in Ohio or something, right?
Like, who would you go to to discuss if you could put an ad
you on your property, just go right to the city.
They're super friendly.
I think there's is this attitude with investors, especially newbies,
that they're very afraid of going to the
my experience over 30 years has been it's fantastic.
You go in there and they're very kind.
They want more buildings and places to live in general.
There's always bad eggs here in there, but they really are kind and they,
if you can, you know, find a champion and in your municipality,
it's so key and it's so special
because you could just come in and just do all kinds of building.
That's a good point.
Like a lot of people think the city is like, you know, tough.
They they, you know, don't forget, they make money.
Yes, they do.
There's permit fees, development fees as impact fees.
Their sales tax.
There's all kinds of even rental fees.
There's all kinds of things that happen when the building,
you know, people are building. Right. They make a lot of money.
We call it the building tax. Yeah. Yeah.
So it's a it's a good question you ask, because I think you're right.
If you have something in escrow or even you own something
and you're curious, just go down to the city or county,
go down there with your stuff and say, This is what I've got,
What can I do out here? Right.
And they'll tell you, Yes, exactly.
And in fact, you know, you'll take your personal neighbor,
you go down, they'll look it up, Google Earth,
and they have all of the data and all the statistics.
In fact, I'm working on getting entitlements for an eight unit right now.
And that's exactly what I'm going to have to do
in some of these more dense areas, even where I am.
If there's public transportation within, I'm not sure exactly.
But like I couple of blocks, they waive parking once.
So I know.
And so some of those
if there's public transportation close by, they're very co-operative.
The way that's huge guys, that means you can build on more of the land.
What's your normal deal flow look like?
Well, I don't do a lot per year and I'm okay with that.
I've done huge bunches
of houses and investments and spec homes
and I'm not about the fast pace anymore or the high volume pace.
I want to do quality things.
So with my team, we'll go and I'll talk to brokers.
I have relationship with brokers, but you know, it's kind of funny.
There are a lot of opportunities on the MLS.
I mean, people think it's all retail, but it really isn't.
If you look at it a certain angle or a few time it right, this last property
I got right on the lagoon and you know, I mean the ocean
in Southern California, a developer was going to buy it at 3 million
and it fell out of escrow because he couldn't completely scrapes
a lot while I came in as a value add
or a forced appreciation builder.
And I didn't realize it was multifamily.
I wasn't that stupid.
But when the broker when the agent said, Oh yeah, you can put eight
more units on the property, I was like, okay, you know, and it was timing.
It fell out.
And the the property owners were trust kids.
They had to sell in a certain period of time.
And I just walked in at the right time.
So this is a really, really, really good point.
That lot that got listed
to one person was a scrape
and a new build, and that could have gone down in history that way.
But it but
had you perhaps gotten there before,
it's now turning into an eight unit
and this is the really, really, really interesting and a good point
because I think a lot of people don't understand that it can be that different.
It's literally and I say I go, when you drive past and,
you know, a ten acre property, it could be an office building,
it could be a multifamily building, it could be a retail,
it could be a grocery store, it could be a self-storage, it could be,
you know, 50 houses, there could be lots of stuff.
And I don't think people understand that it can be literally that diverse, right?
Yeah, I think I've gotten used to this idea and, you know,
it took me a long time of a lot of transactions to realize, wait, done.
It's not about the transaction.
It's about the long term real estate income.
And you have to ask yourself,
one of my
custom build customers told me, Don, you have to ask yourself every time
you see property, what is the highest and best use for that property?
And I didn't even think about it.
I was such a knucklehead for years.
I was just looking forward to that transaction and, you know,
typical transaction on a single family piece of property.
So, Don, what's the best way people can reach you
on Instagram?
I'm woman builder, Don, and Facebook is Don Mates.
And they can email me Don at Woman Builder Dot com it's really easy
that's W omen builder dot com
and then my website is WWL where you woman builder dot com.
Well this has been fun
thank you so much I appreciate your time you guys are both an and wonderful.