Buffet viz. Covid19?

[OnPoint]

Been dithering about major home renovation for last couple years. Project would be to double the square footage of rental SFH, configure addition as a duplex rental. Would not fall under ADU rules.

Reminded of Buffet’s words “Be fearful when others are greedy, and be greedy when others are fearful.” Aaand lotta fearful folks about now…

Construction seems to be OK for now, continuing as usual. But if incomes are hit for a sizable chunk of renovation buyers, small-biz owners etc., that could change? Construction more available/responsive & cheaper?

Or am I too late already, given permit-process duration? E.g. permits take 6+ months, but this “crisis” will be over in 3.

Property is in central/desirable SFH neighborhood, currently bringing $3K+ rental from professional types, which is double the mortgage payment. The project would shut off rental income from unit #1 until unit #2 completed.

Part of my thinking is:
– If a big part of the project cost is lost rent (15%?)…
– And rent prices are about to take a major decline…
– And if architects/contractors are hungry for business…
– Cheaper to do this now, yes?

Pigg’ thoughts appreciated…

PS: I’ve never done this before. But I’ve heard the horror stories*. But I’m building a rental, not “My Dream Home” so my standards are bit relaxed…

*PPS: A lot of “horror stories” I’ve heard are “The tiles arrived from Italy and they were CRACKED! AND THE WHOLE CREW HAD TO WAIT 6 WEEKS!” I’ll be takin’ the Home Depot route.

[sdduuuude]

If the plan to do this remodel is based on the idea that contractors are hungry for business, I would talk to a few first. I am not so sure they are hungry for business at all.

If the economy goes into recession due to the virus it could take months for the construction industry to feel it. The housing market is not like the stock market. It turns pretty slowly.

With that said, once your permit is ready to pull you can wait quite some time before it expires. Then, you have 6 months after pulling a permit to call for your first inspection. My thought is – start on the permit now so you can pull it once the market softens.

I like this plan because being in a rush makes dealing with the city more difficult. It seems smoother when you aren’t in a rush because you have time to do any stupid shit they make you do so the requests don’t seem so frustrating.

Getting a permit like the one you need shouldn’t be too bad. I would avoid an architect – just draw up a floor plan on your own and find a structural engineer on yelp to do the construction drawings. If you are not much into DIY, consider a design-build contractor that will do floorplan, structural, pull the permit, and built it for you. I do my own general contracting and don’t mind dealing with the city so I don’t like this option and they may not like you playing games with the schedule as I mentioned above, but for a rental owned by a non-DYI person it can be a good option.

The permitting process is actually quite organized down at the city dept of development services. Just make an appointment to pull a construction permit and let them walk you through it. The first step will be to pull zoning maps with all the overlays you hope don’t exist. Play dumb, be super nice, ask lots of questions like “what is next” and “can you make a list of all the things I need” or “who can help me with that?

So, that is my thought – start on the permit now. Take your time, maybe try to do it on your own, or with the help of a permit runner. Once the permit is ready, if the market hasn’t softened just wait to pull it as long as you can. Then pull the permit. If contractors still busy, wait to start construction up to 180 days and call for your first inspection, which might be a pre-construction meeting anyway.

[DataAgent]

I have a standing order with several independent contractors for remodeling projects in my house. I’ll pay market price for any of the projects. No one has called me. My projects may be too small ie. tile 2 bathrooms. All of my contractors want large projects in La Jolla.

[Author]

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