Building ADUs for HUGE Value Add with Alvin Uy

Alvin Uy: [0:00] Bought it for $920,000 right, this was off market, it was a two bedroom, one bathroom house with a detached garage, a two car detached garage. Our strategy was, we're gonna build an ADU, but we're also going to force a value of the front unit by making it a four bedroom, three bathroom. So, we added 500 square feet to it, and then the two car garage was, I believe, about three fifty square feet. We added another three twenty square feet to it, so we made that a 700 square foot property. We converted the garage into an ADU. So we bought that from 09/20, spent about 320,000 on it, somewhere around that range. Our all in is at 1.3, really, on this property. I got it appraised. I got two lenders appraised this thing on a cash out refi at 2,000,000, above 2,000,000.

Speaker 2: [0:49] Welcome to the Collecting keys podcast. The show where you'll learn how to use real estate to create massive income, not just passive income. Real estate doesn't have to be a get rich slogan. Listen to the country's top real estate operators, and you'll have all the tools you need to replace your w two income and go beyond in under twelve months. Ready to take things to the next level? Let's jump in with our hosts, Mike DeHaan and Dan Austin for today's episode of the collecting keys podcast.

Mike DeHaan: [1:29] What is going on guys? Today, we are here with Alvin Ui, who is an investor flipper, developer, entrepreneur based out of the LA area. And man, we just finished up recording with him, and he's one of those people that you kinda just like hear his whole life story. And you wonder what the hell have I been doing with my life? Because he has done everything. You know, like So much. So much. We covered an incredible amount in this episode, and it really just scratched the surface of stuff that he has done. So you should definitely go and, you know, look at more of his long form interviews if you're interested in them. But he's done everything from he started a product business that he went on Shark Tank and turned down a million dollar offer from one of the sharks and went and scaled that into a much larger business. He had a digital marketing and, like, design company where he was doing very high profile, you you know, designs and artwork for movies, including like all the Harry Potter DVD covers, like they did all those sort of things. So you've probably seen a lot of his work and not even known it. And all along that same time, he was flipping houses, he had a real estate license, he started a mortgage company. And now he's gone full time into real estate as of a couple years ago and is doing, what do say, seven deals at a time? Seven active projects.

Mike DeHaan: [2:44] With these, like, million dollar purchases that he's adding, you know, 7 figures of equity to these deals. He's keeping most

Dan Austin: [2:51] of them. Like, it's insane what Alvin's doing. The thing I think of that's incredible with him is a, he's very humble. Like, when he very much so just scratched the surface on the stuff he's doing. Mike and I know him personally, I know he does so much, and has a lot of challenges challenges in his life he's overcome. But he's doing it in Southern California is the point I wanna bring up, which everybody's like, I can't invest in Southern California. He's burying in Southern California. He's flipping. He's doing new construction and new development. He's doing it all in LA County, which is incredibly challenging, but he's figured out and is highly successful.

Mike DeHaan: [3:20] Yeah. Like it's yeah. Like you said, just leaves you up going, cool. Everything that I've done is is meaningless. And anybody that's done less than me, they have literally no excuse because he, like because also too, all this stuff, he just learned on his own.

Dan Austin: [3:32] Yeah. And, you know, the best part about this is is he did have a rich dad, but his dad was rich in The Philippines. And when you hear his story, it is not what you think it is when I

Mike DeHaan: [3:40] say Yeah. Right. Very true. Yeah. Start started literally sleeping on on the floor with no bed in a one bed, one bath apartment. Yeah.

Dan Austin: [3:47] It's a his SIG story is Anyways,

Mike DeHaan: [3:49] guys, really, really good stuff here. I know you guys will enjoy it and seriously reach out to Alvin on Instagram and go and check out his other material that he's done. It's kind of a unique name. So if you Google him, he'll show up. He hasn't done a huge amount of media. He just started doing stuff this past year. But and if you can find it, like, there's just so many amazing tidbits that he drops in there and doesn't even realize how

Dan Austin: [4:07] much gold there is. Tons of nuggets.

Mike DeHaan: [4:08] Anyways, guys, hope you enjoy the show. It's a really, really solid one. And if you leave us a five star review everywhere,

Alvin Uy: [4:13] it really helps us out. But seriously,

Dan Austin: [4:15] leave a five star review.

Mike DeHaan: [4:16] Honestly, like, are you waiting for? It takes two seconds. It's really simple.

Dan Austin: [4:18] Do it. I'm asking nicely. Asking nicely. I'm not

Mike DeHaan: [4:21] gonna ask again. But alright, guys. Enjoy this show with Alvin Ui. Alright. We are here today with Alvin Ui. And man, I'm so excited to have you on the show, dude. I have known you for quite a while through GoBundance, and you were pushing off on doing media appearances for a little bit. But you have such an awesome story, you're doing so many great things in the real estate and business space. And, yeah man, really excited to have you on. So people who haven't heard about you, maybe give us a breakdown kind of who you are and what you do, and then we will go into your backstory a little from there.

Alvin Uy: [4:55] Okay, well I am Alvin Uwe, I'm a real estate investor here in Salvador, California, I'm in Los Angeles. I've been investing for the past twenty years in SoCal, I didn't know better at the time, so I figured out I gotta figure out how to operate it here, and I've always wanted to dive into real estate, and so that's something that I've been focusing on since I read the book Rich Dad Poor Dad. Really? Yeah, so just like everybody else, it's no

Dan Austin: [5:26] There's another one.

Alvin Uy: [5:28] But yeah, so I've been focusing on that and now I've had other businesses, I was a serial entrepreneur in a past life, I guess, now after joining GoBundance, like, you know, I figured I need to really just focus on one thing, maybe expand on that. So I decided to 100% pivot to real estate as of twenty twenty one ish.

Mike DeHaan: [5:52] Yeah, so pretty recent to it.

Alvin Uy: [5:54] Yeah, well when I joined GoBundance. Yeah. You know, that was a big was a big light bulb moment for me on my first event, I need to really just focus. And so that's what I did. Now I'm here in Los Angeles tackling opportunities with helping develop and, you know, helping out in terms of creating more housing, which is a big need here. I do a lot of ADUs, SB nine, all the stuff. That's something that we specialize in now. And I'm in the process of building a construction team. Yeah. And hopefully putting a fund together at the end of the year.

Mike DeHaan: [6:30] Nice. That's incredible. I love it. So, yeah. So you started real estate in 2021, you're already doing all the stuff that people have been working for like five or ten years have been trying to figure out.

Dan Austin: [6:39] So I guess to clear that up, did you say you started investing twenty years ago or you started

Alvin Uy: [6:44] Twenty years ago, so I started investing actually 2003.

Dan Austin: [6:50] So that was, yeah I got my first property 2003. The incredible thing I find just about your story too is that you said you're investing in Southern California, and I can't wait to dive into some of the stuff you talked about, like the SB nine stuff. I know you and I have talked about some of that stuff, and like, that is where the ultimate creativity is, and how you're able to invest down there and make really good money and good cash flow on properties, which is unheard of in Southern California.

Mike DeHaan: [7:14] Yeah. I mean, everyone's like, you need to leave California because the politics, the high price point, all that sort of stuff, and you're

Dan Austin: [7:20] just figuring it

Speaker 2: [7:20] out You might

Dan Austin: [7:21] be the only guy that's able to do it. Yeah. Right. I mean, we've got him here on the show.

Alvin Uy: [7:25] Well, I'll tell you right now, like you know, California in my opinion, it's a big boy state, know, like you gotta really know what you're doing to operate here. It's not a one trick pony state, especially Los Angeles, it's very very competitive, there's not one single strategy that would work 100% of the time. You know, real estate, as you guys know, is extremely dynamic, especially in this market cycle that we're in, you have to be thinking outside of the box to really make things work.

Mike DeHaan: [7:53] I love how you say it's a big boys day, so you can take all the people that are saying, you know, don't go to California, it's because they suck, let's be honest, you're just a better operator than they are.

Alvin Uy: [8:03] Yeah, mean, you know, just a thing, right, like, I don't know how free flow you guys wanna have this podcast, but I've gone through like all the different cycles, maybe once or twice now. 2008 when it crashed, you got all these gurus coming out of the woodwork, they got all these courses, they got all these ideas that may have worked years before, and you're starting to see those signs again, and I'm like okay, those signs are coming back. And you got all these gurus out of state that may not necessarily know how to operate here, and their systems do not work In California, it's such a unique state that one trick just doesn't work.

Mike DeHaan: [8:39] Yeah, yeah, no, that's awesome.

Dan Austin: [8:41] What was the trick that got you started back, you said, when you started twenty years ago, like what was the first thing you got into?

Alvin Uy: [8:49] Alright, so well, fun fact for me, I've never actually rented a property in my entire life. So, I decided back then that in my early 20s, while my siblings were moving to apartments, things like that, I asked my parents, I go, Mom, Dad, we have a garage, can I convert that into a bedroom and start saving some money? And they're like, Sure. And I had a W-two job at the time. I started giving them a little bit of my income to help cover the mortgage and I learned, Oh, you can depreciate? Oh, can you put me on title? And can I write off some of that stuff so I can save more money? They're like, sure. So I'm like, know, and I'm like, wow, this is incredible. So I effectively built my first ADU back there without even knowing it. Then 2003, I had enough money to save for my first property and you know, at the time they were giving away loans. I got a eighty-ten-ten loan, basically 100% financing. I knew I couldn't afford it at the time, and I ended up house hacking that accidentally. And that's kind of how I started and I, you know, I started realizing, wow, this is something that I should really look into. And that's about the time I read Rich Dad Poor Dad, so everything just kind of happened like all at the same time for me.

Mike DeHaan: [10:13] Yeah. So that's like kinda gave you a little foray. And what was your background growing up? I believe your did your family immigrate here?

Alvin Uy: [10:20] Yeah. I'm first generation. So I came here when I was 12 years old. My parents woke us up in the middle of the night from, you know, I was born in Philippines, middle of the night said, hey guys, we're going to Disneyland.

Mike DeHaan: [10:38] And so we're like, what do you

Alvin Uy: [10:39] do when you're 12? You just jump up and go, okay, let's go, let's do this. We came here when I was 12 and I am one of five kids, I was the eldest of five kids. The youngest of us is, she's ten years younger than me, so she was only two at the time. Parents were of wealth, I guess, in The Philippines, to the really poor or really rich over there. And, you know, they left everything just to come here without the blessing of my grandparents. They were completely That being said, you know, it's a new world for them because they were of means. They had no sense of how to cook, how to clean, how to even find a job. You know, they had really big degrees. My dad was an engineer, my mom was, I don't even know what she had, but she was a CPA, I think, where she had an accounting degree. But all those things don't really count when you come to a different world. You don't have a job history, you don't have an address, you can find work. Wow. That being said, you know, they brought a lot of money with them, which they thought was a lot of money, but because you have no credit history event, you can't really buy anything outside of using cash. So long story short, they spent all their money being here, ended up living in a one bedroom apartment with me and my siblings, sleeping on the floor, on the carpet, couldn't even afford to have a mattress.

Alvin Uy: [12:08] So we just slept on the floor for maybe about a year, a year and a half, because my parents didn't know how to cook either. So it was a struggle, you know? Oh boy. It was a struggle.

Mike DeHaan: [12:17] That is so interesting though, right? That they, you know, so they come from means in The Philippines, then to come here and have it just be not really like mean a lot, right? So they're able to obviously have somewhere secure, like a one bedroom, one bath apartment. But what you're describing is like most people's really rough coming of age story, you know, like when they're doing these podcasts and they're like an American born real estate guy. Right? Mhmm. But you know, your family actually almost took a big step backwards to come here because, I'm assuming because they saw like the larger opportunity in The United States. Or I guess what was their main motivation for coming over here?

Alvin Uy: [12:53] Yeah. There's many factors. You know, I don't know if we wanna take too much time diving into this, but the short end of it is this, there was, you know, they got their visas to come here, it was the second time around. First time was my dad's visa, and that expired, my grandpa said, Why would you leave all this money behind? You got all this. And my dad is the firstborn, he was supposed to take over the businesses out there, but he I guess there's one day where I have an uncle who somehow got involved in politics and was in the limelight and, you know, maybe had some enemies or whatnot, but, you know, at the end of the day, we started the family started getting a lot of death threats, ransom, kidnapping, and my parents just kinda freaked out. I think I have a brother that almost got kidnapped, and so that same day, they decided, hey, let's just go and not tell anybody. And that's why they woke us up in the middle of the night to just come here. That's crazy. That's the main motivation, you know? And my grandma always said, Why would you leave all this just to go to The US and become janitors and maids? And ironically enough, my dad's first job, he was a janitor. And he was disowned and all that stuff, so he brought the family here, my immediate family here, to build his own legacy and kind of ran into walls. And so what I do now is, you know, I'm in a mission to extend a family legacy and make sure that my parents' sacrifices don't go to waste. Mhmm.

Mike DeHaan: [14:28] Yeah. I love it. That's that's so interesting. Right? Like, just you so hear that so rarely about people so willingly walking away, I guess, from, like, a position of power to come somewhere, you know, and and start over like that to pave their own way. Okay. I mean, it's very admirable them to do that. Right? Like, obviously, it's worked out very well for you. And I would imagine for you and your families, probably, in The United States, probably has the opportunity to be bit of an easier life than in The Philippines. Totally pontificating, I have no idea, but

Alvin Uy: [14:57] Yeah, mean, you know, it's a land of opportunity and that's phrase that kinda always stuck out growing up and looking through that lens, even seeing my parents kinda go through it, I when they first came here, they thought it was a lot easier than what it really was. And so I took it up as a challenge to just really look through everything through that lens, you know, and I just created an optimistic approach to it. I saw a lot of people maybe aren't working hard enough to get where they wanna be, but maybe it's because they're just looking at the wrong lens. And so that's how I've always kind of approached things. It's I'm all looking for the opportunity. I'm looking for the positives, not the negatives, you know, gapping against stuff. Know? Yeah.

Dan Austin: [15:44] Yeah. Totally. Yeah. Absolutely. Absolutely. It's like looking at, like, how you can make it happen, not why Exactly. Why it will happen for you. Exactly.

Mike DeHaan: [15:51] Yeah. So no. That's awesome. So you got your foray in real estate 2003. When did you start Scrubby Buddies and start going down that endeavor? I think that was the name of your your company that you had. Right? Or did I do it wrong?

Alvin Uy: [16:05] No. It's actually Soap Socks. Soap Socks. Soap Socks.

Dan Austin: [16:08] Yeah. You're

Mike DeHaan: [16:09] so cool. Know. I know. It it was some some bath thing for for kids. Right? Yeah.

Dan Austin: [16:14] Mike's not allowed to be around kids.

Alvin Uy: [16:15] Yeah. So I'll dive into a little bit of a backstory about that. So, after reading Rich Dad Poor Dad, especially the cash flow quadrant, I wanted to Yeah. I basically plotted my way to becoming a business owner and investor. That was my goal. So I had a W-two job and I decided, you know what, I'm gonna go into design. By the way, I was studying engineering in college and I dropped out just because I couldn't see myself continuing that career. And I decided to jump into art, which my parents just freaking freaked out. And I told them, look, you know, I can find a way to make money doing this. And got into doing design, you know, got a job somewhere where I knew I can learn that business, and learn how to run that business. Ended up opening my own agency at some point for, and I ran that for about, I guess, twenty years in that industry. So doing a lot of branding, product development, I started with building artwork for movies and developing brands, and I started working for like, some of my clients were like Mattel, Hasbro, Disney, so I knew how to basically create these things. And then I had a buddy from high school that said, Hey Alvin, I just got laid off, I'm looking for a change, my wife doesn't want me to pursue the career of law enforcement because we have a kid coming up, but I've got this idea and it's kinda like my one last shot, can you help me with creating a logo for it? And at the time I looked at it and I'm like, you know what, man, this is a great concept, I'm looking for a project, this is right up my alley, I love the story, it really aligns with what I'm looking for, you know, the story behind it, the purpose behind it of helping kids that were of it was basically a product of helping kids who are products of abuse, I guess.

Alvin Uy: [18:12] And so that resonated with me because of my backstory. So I said, you know what, make me a partner, let's bring this to fold and make it happen. So I started designing for it, started creating the brand, developed it a little bit further, launching on Kickstarter. In a week we raised $50,000 We're like, holy crap, this is real. And I didn't realize at the time Kickstarter was international even. So I'm like, wow, this is global, this can be a big thing. And launched it at a convention, just to get more feedback, and that first day we got an award for innovation. And that same day we also got an order from Nordstrom, which we did not expect. Big deal. And because we got that order from Nordstrom, you got scouts from Shark Tank floating around, said, Hey, you guys have an amazing product, would you guys come to pitch on the show? And so we pitched on Shark Tank, make the long story short, we got offers from two sets of sharks, Damon John and Laurie and Robert Hershovak, they wanted to buy us out, offered us a million bucks, but it just that deal just didn't make sense for us, so we walked away from it.

Mike DeHaan: [19:27] Alright.

Dan Austin: [19:27] Yeah. That's tough.

Mike DeHaan: [19:29] Yeah. So That's awesome, though.

Alvin Uy: [19:30] Yeah. A million bucks.

Mike DeHaan: [19:31] Yeah. It's such a crazy experience because that was like your first sort of shot at doing any sort of development or being involved in a business like that. And I guess for people that aren't familiar, give us like the two second version of what exactly the product was. You said it was

Alvin Uy: [19:44] Okay. So the product is essentially this. It's a washcloth disguised as a stuffed animal. So think of a stuffed animal with terry cloth outside, it's got antimicrobial sponge inside. We have different animals where you feed it certain ways, you can feed it soap, liquid soap, you dunk it in water,

Mike DeHaan: [20:02] and

Alvin Uy: [20:04] you you basically, it's like a loofah slash, think of what you guys used to probably wash your cars with, it's similar to that. You know, but kids would look at it and say, Hey, that's a friend in the tub, and I can also carry it around. So it's in and out of the tub, it's your best friend. And you dunk it in water, you could probably even throw it, you can throw it in the laundry also, you can easily wash it just like everything else.

Mike DeHaan: [20:31] So you built that out and went on Shark Tank, you turned down the million bucks, and then I guess where did things go from there?

Alvin Uy: [20:37] So, you know, we ended up just launching it ourselves, and because we have relationships with like the Disney's and all the different licenses, so I ended up doing our own thing. It is all over retails now, we have some Target, believe, we're in Macy's. I don't handle operations anymore, because I kinda got out of that, and I don't handle sales, but I know we're in Macy's, we're in several other major retailers, and, you know, at this point, I'm just an equity partner now. It's a good spot to be in.

Mike DeHaan: [21:06] Yeah, right, absolutely. So no, that's cool. So I guess how like that probably I don't know, I guess what was that time frame with that? Because you say you started getting real estate full time in 2021 after going go abundant. So was that your main gig really up until that point?

Alvin Uy: [21:20] No. So I still had my design agency on top of that. So I ran a full service design agency, did a lot of entertainment work, did video games, did anything and everything entertainment. So TV, I designed a lot of stuff for the movies. I don't know if you guys, you're probably young enough to remember this, Harry Potter, a lot of theatrical stuff was my artwork, I designed the DVDs when they first came out, all of those collections, it was all my work. And a lot of toys, a lot of video games, electronic arts video games, I mean, all those things were designed. And so I had that agency, we had a video production company as well in house, so I was building learned how to build all this integrated businesses within the business, and kinda scaled that up. And then come 2020 is when I kinda shut that down because COVID happened and lost more than half of my clientele. I I I was also pretty burnt out at that point looking for a change.

Mike DeHaan: [22:18] Yeah. Yep. It's so crazy. Just like how many different things you've been involved in that I feel like it's like people's bucket list to do like one of those things. And you've done like so many of them over the course of your life. That's amazing. So you joined GoBundance, started getting into real estate. Let's talk about that transition and kind of, like, how you started with that and the stuff that you're working on now because now you're doing a bunch of different things in that realm.

Alvin Uy: [22:42] Yeah. So I've been doing real estate since 2003. So, yeah. I guess full time real estate though, it's

Mike DeHaan: [22:49] a different mindset than when you're looking to park some money versus you're trying to like make a business out of it.

Alvin Uy: [22:54] Well, wasn't was actually fairly active even in between. So I was buying real estate all in between, man. Like I got the, you know, even when I had W2, man, I'm like buying properties, I was flipping, I was rehabbing, learning all those traits, because I knew that was my end game.

Dan Austin: [23:08] Seems like you've done, just talking to you too, I'd love to get into some of it, like a lot of you, taken on some pretty serious projects on the flipping and and you've done some the hard challenging stuff. So I think that's really, I'd love to dive into kinda how you got into that. Like what you were doing, what you doing full time.

Alvin Uy: [23:24] Yeah. I'm just, I'm very curious, and I like There's to push my always challenges that come in front of you, and I made a promise to myself, am always gonna be the better version of myself. Every day I need to improve, every challenge that come my way, I have this thing called fighting my dragon or slaying my dragons, you know? I look at everything as an opportunity to grow. Every single challenge to me, look at it as dragon. So how do I beat this dragon? I gamify it. So that's how I get into a lot of stuff, and I'm very curious, and I like to challenge myself, I like to I'm a fighter. So, you know, I figured I gotta learn how to rehab because it's something I can use eventually. So, from 2003, I just started learning how to rehab. I'd rather make those mistakes early on and be able to identify the proper ways of doing things, be able to identify the proper general contractor to hire subcontractors, so I learned that trade fairly early on. And so by the time I pivoted, I had everything I needed. Even between, I don't know if I told you this before, I even started a mortgage company at one point, just so I could learn how to get loans and understand wholesaling and wholesale rates and all that stuff. I also got a real estate license around 2005, I believe, just so I can know the ins and outs of the real estate documents. I'm just curious.

Alvin Uy: [24:53] And for me, for me to be able to really understand something, I gotta be in it for it to stick. And so that's kind of my story.

Mike DeHaan: [25:02] Yeah. How'd you even have the time to do all these things?

Alvin Uy: [25:06] I just found time, dude. Just found time, man. I just found time. Like, that's it's such a I don't know.

Mike DeHaan: [25:12] Such a big thing that most people get stuck up on is like they can't get started in real estate or, you know, doing anything outside of, like, their main day job because they don't have time. But you've done like everything under the sun. Like, so I mean, and it's also if you didn't know how to do either.

Alvin Uy: [25:28] You just learned how to

Mike DeHaan: [25:29] do it, or I'm assuming you found people that knew how to do it and, you know, you worked with them.

Alvin Uy: [25:33] I mean, I found resources. Look, man, like I said, I look through everything as a land of opportunity. Right? There is a means to everything here, there's a problem, there's always a solution, right? I looked at my dad, my dad was working graveyard shifts, so I'm like, man, if he can do it, he can find the time to do that and still kind of take care of us in the mornings and things like that. And I'm like, you know, if you can do it, I can do it. So it's really just learned that grit early on and seeing it through the lens of the hard work that my parents did, and I'm like, you know what, I gotta do the same.

Mike DeHaan: [26:04] Yeah, absolutely. So then when you started going full time into real estate, I guess, what was your mission objective with that? Like, what did you decide you're gonna do first? Like, you flipping? Were you looking to wholesale?

Alvin Uy: [26:17] Well

Mike DeHaan: [26:18] And you said building the ADUs

Alvin Uy: [26:19] and stuff. Yeah, so here's the long story short. So, by 2020, effectively I wanted to retire, or I did retire, I guess you can say, and I got really bored. And my nature is just like, man, I can't just sit around and be a passive investor, right? I'm a product developer at heart, so I wanted to build, I like to build stuff, know, that's just me, that's in my DNA, they just like create stuff, I'm

Mike DeHaan: [26:43] a creator.

Alvin Uy: [26:44] So right around that time I discovered ADUs and development. I had an interest in that for a long time, it just never really had the bandwidth, capacity wise or time wise, so that was my first realization of pivoting while I was kind of in this retirement phase, you know, I had a lot of time and initially I invested with a partner for development of ground up development, basically turning down a property and starting new, building two units in there, or two to four units in there. Quickly realized I knew more than this person. Yeah, right. So I'm like, man, so it just became this thing where I ended up taking over and I realized, okay, this is it for me, this where I need to be, this is my drive and everything that I've done before with everything, business wise, development wise, it's all coming to place, especially when my end game's always real estate anyway.

Dan Austin: [27:39] That

Alvin Uy: [27:40] time that I've been pushing out then, it's like, I'll do that then, when it comes time, well that one day is now. Yeah.

Dan Austin: [27:47] Right, what does that process look like for you because when it comes to actually diving in it, because there's the acquisition side, I would love to hear how you're finding these deals or these plays and then how you're underwriting them and then probably there's some specific stuff to Southern California where you've cracked the code a bit, so I'd love to kinda hear that a little bit end to end from start to finish.

Alvin Uy: [28:07] Oh, I can give you guys, I just did a complete BRRR

Mike DeHaan: [28:12] Okay.

Alvin Uy: [28:12] On using an ADU. So I'll give you guys a little bit of our unique strategies that been developing for the past few years.

Mike DeHaan: [28:22] And when you say complete bury, you mean you pulled out all the money that you had invested in there. Right. But this is dude, the rates are so high right now, that's literally impossible. So I don't believe you. I'm kidding.

Alvin Uy: [28:33] Liar. Look. Here's the thing. Right? So a lot of people, when they start talking about strategies for real estate, they have like one or And two, because I study all these different ways to maximize, optimize, and force value, force rent, force appreciation, the key is really being able to take all these tools and put them all together, So you got deal sourcing, you get off market deals, you know, you can find stuff on MLS even, right? So honestly, a lot of the stuff that we buy are still on MLS, but because I learned how to force value by way of additions and construction and just maximizing opportunity, that's where the significance of these valuations come up. So I'll give you guys a quick breakdown. So, a year ago, about a year ago we bought a property, we bought it for 920,000, right, this was off market, it was a two bedroom, one bathroom house with a detached garage, a two car detached garage, right, and it was a wholesale deal, so we paid, I believe another $20,000 on it for the wholesale, so we're all in on the acquisition, it was $9.40 at that point. So, our strategy was, we're gonna build an ADU, but we're also going to force a value of the front unit by making it a four bedroom, three bathroom. So we added 500 square feet to it, right?

Alvin Uy: [30:06] So it's from a two bedroom, one bathroom to a four bedroom, three bathrooms.

Dan Austin: [30:11] To add that square feet, did you actually extend the house or was there a covered area?

Alvin Uy: [30:15] Yeah, we extended the front unit, and then the two car garage was, I believe, about three fifty square feet. We added another three twenty square feet to it, so we made that a 700 square foot property, I mean, structure as well. And there's also a bonus structure in the back of that garage that was considered a rumpus room, you know honestly I didn't even know what a rumpus room was, you know. I just looked at it and I'm like, oh it's a separate structure, it's permitted, it's got its own bathroom, I could turn that into a bedroom, So you by way of ADU, we converted the garage into an ADU. So we bought that for $9.20, spent about 320,000 on it, somewhere around that range. All in is at 1.3 really on this property, 1.37 ish, around there. I got it appraised and I got two lenders appraised this thing on a cash out refi at 2,000,000, above 2,000,000. Wow. Both of them was, one was at 2,000,000 in 40, the other one was like 2,000,000 in 60 or something like that. So even at 70% cash out refi, I got all my money out plus an extra 52,000. There you go. At 70% LTV, right? Wow, 70%, that's awesome.

Mike DeHaan: [31:31] And like $700,000 in equity. Someone could become like a millionaire, you do like one of those, honestly.

Alvin Uy: [31:37] Yeah, you do one of these, and because, you know, I study all the different approaches for pushing rents, we're doing mid term rental, short term rental on these, it's in a really good area of town, so we knew we could potentially even do co living strategies on this, anything like that, and so cash on cash return is infinite. I believe we're probably gonna average about maybe $5,000 a month net on this, Nice. On a mid term, short term rental strategy. How much did you say net? About $5.

Mike DeHaan: [32:09] Oh, $5. Okay. On an average. So nice. That's awesome.

Dan Austin: [32:11] Yeah. That's huge. So let me let me just understand this while you're talking about cash flow. So you've you've increased the main living area for to a four bed, three bath. Was the garage attached or detached?

Alvin Uy: [32:24] No, it's detached, detached. Completely separate unit.

Dan Austin: [32:27] So that's a separate unit now that you created, and then you had the rumpus room, which, so you basically with this house are able to have two ADUs, is that how it works out?

Alvin Uy: [32:37] No, technically speaking, the rumpus room was something we didn't wanna, it's part of the original house. It wasn't really considered, even though it's a separate structure, the living square footage and that counted towards the original house. And you know, at the time, ADUs, you run the risk valuation in these ADUs because appraisal standards haven't really caught up. So we don't wanna consider that as part of

Dan Austin: [33:05] the ADU. But you can rent it separately in your strategy.

Alvin Uy: [33:09] Because it's separate structure, we are renting it separately. Nice. So essentially, have three units here right now that we're renting separately. Let me ask

Dan Austin: [33:17] you this, just out of curiosity. What is the square footage of the lot on something like this? Because I know Southern California, I'm I'm assuming it's gonna be small and you're able to have this many structures in it.

Alvin Uy: [33:26] This is 6,000. I believe this one's about 6,000.

Dan Austin: [33:29] Yeah. Am I gonna have a 6,000 square foot lot that we're only able to shove a house on in our market? But I bring that up because California usually leads the way in stuff like this and are ahead of the curve, especially in affordable housing.

Mike DeHaan: [33:43] I know.

Dan Austin: [33:43] Whether you guys are doing it the right way, that's a political question, right? But like, we're seeing that pop up in our market. You and I chatted about this last year, think, or earlier this year about kind of your strategy, because I'm trying to get ahead of the curve here in our market, because there is going to be a lot of opportunity across the country to do these. As laws change, laws catch up, then as you said, Alvin, as the lending practices catch up with the appraisals, there's a ton of opportunity here.

Alvin Uy: [34:08] Yeah, and I wanna touch on that a little bit. You know, ADUs to me is the new California gold rush. Not too many people realize it yet, but man, it's a game changer. And it's constantly changing. There's a legislation that just passed the last couple weeks, AB ten thirty three, which now allows these ADUs to be sold separately Oh, as wow. Interesting. This is a big deal because that means these things aren't gonna be appraised a little differently if they're being sold separately, might even open up lending opportunities. And so I'm trying to get in front of that curve, you know, and I'm trying to build as much of these as possible, not to sell, but just I know the value is gonna go up. Totally,

Dan Austin: [34:50] the equity play there when you could have an ADU that essentially you can turn into a condo, that maybe sells for 500,000, and man, my mind's going fast now, that's amazing.

Mike DeHaan: [35:01] Yeah,

Alvin Uy: [35:01] yeah. So California's a perfect place to build these things because, you know, I can build these things anywhere from $202.50 per square foot, because

Mike DeHaan: [35:11] I have

Alvin Uy: [35:11] my own construction team.

Dan Austin: [35:12] That's pretty cheap.

Alvin Uy: [35:13] Maybe even less, know, if it's garage conversion, it's probably about 100 per square foot or less. But anything new build, probably build it between 200, about $2.50 ish. That's great prices. But these things are trading on retail, at the very least, 500 per square foot. Yeah. In our latest project, that was at 900 per square foot. So you're doubling, tripling your value. Yeah. Oh So my it makes total sense.

Dan Austin: [35:37] You gotta do it. Makes sense.

Alvin Uy: [35:39] It's a gift.

Dan Austin: [35:40] Yeah. Right. So can you give us a rundown just for our audience, just some of the laws that you're kinda the, that you've cracked the code, I'll say, on that you're basically just becoming an expert. You said that earlier today, like, this is where your expertise lies. Like, you've got the ADU laws, and the multi family laws, all that stuff with SB nine and even the recent law that you just mentioned. Can you kind of step through that, what that actually looks like for how you're able to drive so much value that you can actually just buy something off the MLS?

Alvin Uy: [36:10] I mean, honestly, it's pretty easy, know, development is really the key here. You can capitalize on the fact that your build costs will never be higher than the retail. So it totally makes sense on that front. So that's really the key component there, And you if you are able to find hidden bedrooms, the more bedrooms you have, obviously you can crank up the rents and you can effectively burr. So, in California, let

Dan Austin: [36:39] me understand this, so if you have a house, you can always have an ADU now, right? That's one of the rules.

Alvin Uy: [36:44] It's a right.

Dan Austin: [36:46] It's right. It's by right. Have an ADU, right, by right. Yep. But if you have a lot big enough, you could have two houses and then thus two ADUs.

Alvin Uy: [36:53] Yes, that's the SB nine. SB is a slightly separate variation of this housing zoning, I guess, expansion. So what you can do is you can add a second unit to it, and then by right, because you now have two units, you can add two ADUs to any multifamily. So we're actually even buying multifamily of four units, we're converting those into six units. Wow. Adding two ADUs off the bat. So ADUs are not limited to single family houses, you can add them to multifamily. In fact, we have two other projects that are like that. That's awesome.

Mike DeHaan: [37:28] And all of a sudden, I'm thinking about all these people that are going to these other markets trying to find cheaper stuff. It's like, just do it with nicer properties, like you said, where you can actually make the new build that does have upside. Right? Like, why would I wanna buy a bunch of properties from the seventies in, you know, like the Midwest or the Southeast or whatever when I can have a brand new property that's also gonna be just worth so much more over the long run, you know.

Dan Austin: [37:53] Yeah. Always gonna have it, man.

Alvin Uy: [37:54] Yeah. And I've explored those markets as well, I have a couple apartments that I bought in Kansas City, Missouri, and I'm actually selling one of them now, just because I'm like, oh man, like, I'm looking at it as an opportunity cost. It is, know?

Mike DeHaan: [38:07] Right.

Alvin Uy: [38:08] Bought it last year, completely rehabbed that, it's a lot more headaches because there's more units, a lot more maintenance. Yeah, And if I can better returns here, I'll just do that because I have a bigger team here and bigger control. Absolutely.

Mike DeHaan: [38:19] So what does your total portfolio look like now? How regularly are you doing these kinds of deals?

Alvin Uy: [38:26] Gosh, you know what? We have about seven active projects That's crazy. Right now. Yeah. So and that's a combination of ADUs, and we're flipping properties too, and we're building like hillside developments. So we're still, we're not just one niche, we're expanding, but we specialize in ADUs just because I believe in it. Yep. You know, I flip properties too. But I like the heavy distressed homes just because there's a lot more opportunities for that.

Mike DeHaan: [38:54] Yeah. Mhmm. Yeah.

Dan Austin: [38:55] On that, I'm sure you have some of your own capital reserves, but for seven active projects in Southern California, those are large. What are you looking at from a lending standpoint on your for the short term? And then, obviously, you're trying to do burs on the ones you're keeping. But

Alvin Uy: [39:10] Yeah. So lending strategies, man, I get this question a lot. We've been self financed this entire time because I own a lot of properties out here. Okay. I'm leveraging as much as I can. HELOGs, HELOans, plus we do flips too, so we use some of those profits to build other things. Sure. Plus we're able to BRRR, so we can recycle the money as well. But now, as of this year, and I've always sort of held back from taking investor money, but you know, since GoBundas, they're like, everybody's like, hey Alvin, how do we invest with you, how do we partner with you? And now that I'm like doing a lot more social media, I'm getting a lot of, I guess, DMs on the, hey, how do we invest with you? And this year I started taking on money for gap funding So that's kind of what we're doing now. But I leverage hard money, guys, majority of the deals here. California, for some reason, our rates are a lot lower than most states in hard money. I get 90% financing. That's awesome. And also 90% on acquisition and also rehab and construction. So I'm leveraging as much as I can.

Mike DeHaan: [40:15] Yeah. That's interesting. So I guess what kind of rates, when you say that they're lower than other places, do you get in California?

Alvin Uy: [40:19] Oh gosh, guys. My last deal, I was at 9%. 9%?

Dan Austin: [40:24] Really? Not at all.

Alvin Uy: [40:25] Not at 9%, yeah. Well actually 8.75. Yeah, that's really good. Yeah, 8.75, 90%, and then cash at refinance was at 8.25 on a thirty year interest only loan for the first ten years. Yeah. So we get, you know, the DSR loans, I'm sure you guys, are you guys familiar with those? Mhmm. The DSCR and the cash out, so I like those interest only loans. Yeah. Those are my favorite.

Mike DeHaan: [40:51] Yeah. That's so interesting. I wonder why lenders are wanna give you rates like that that are so much lower. Because like most places, you're not getting anything less than 11 or 12% right now.

Alvin Uy: [41:01] I mean, we're buying multi million dollar properties. Yeah. It still makes sense for them.

Dan Austin: [41:05] I hear you.

Alvin Uy: [41:05] And also, I mean, honestly, I'm an experienced operator. Mhmm. So I guess you can say I have more leverage and, you know, I'm able to get them to be more competitive. Yeah. Make some exceptions.

Mike DeHaan: [41:17] Yeah. That's awesome, man. It's so just fascinating how many things that you've gone through. And I just love the fact that you've, like, just gone big on this stuff too. Like, you've done in so many different ways, you've done things that people say are, like, kind of impossible or people kinda just talk about being like, oh, you know, you shouldn't do this because it gets in California. Like, it's a higher price point. Like, there's all this legislation around it. And, you know, when everyone's looked left, you've gone, you know, gone right and just made it work and just really succeeded with it too. That's super awesome. Yeah. So I appreciate all the information here, Alvin. And, you know, you you have a ton more stuff you can talk about. We're gonna be starting to wrap up the show here. So if you guys want any more stuff from Alvin, definitely after the show, make sure that you give him a follow and go and look at some other material that he's been on. He has a bunch of other long form interviews that are really great. So we're gonna wrap up here with our final end of show questions. So first off, which is always the the group favorite, what is what is your craziest real estate investing story? And this can be a big win. It can be a big loss. It can be just like a crazy tenant, crazy situation, whatever you got.

Alvin Uy: [42:24] You know, I'm gonna talk about my first property, just because it's coming full circle now. Yeah. And at the time it didn't make sense for me. I think I kind of mentioned it earlier, so I bought a property almost at the high end, maybe going to the high end market before it crashed in 2003, right? Which at the time was really expensive for me, didn't even know how I afforded that, but it was zero financing. So I bought that for $323,000 it's a 9,000 square foot lot. I knew then and it was in a fairly gentrifying neighborhood at the time, but it was what came up for me and it's something that at the time, like, okay, this is all I can afford. I didn't really know what I was doing, to be honest. So I had a fairly crappy realtor who was also the mortgage broker and he was my mom's friend from church, so I ended up, oh, I gotta trust this person.

Mike DeHaan: [43:17] Yeah, right.

Alvin Uy: [43:17] Right? But man, I think I got screwed on this thing without even really knowing it. On title, it was only one bedroom, one bathroom. But when I saw the house, oh, it's three bedroom, two bathrooms. I didn't know that like unpermitted space mattered.

Dan Austin: [43:30] Oh, Right.

Alvin Uy: [43:32] So I bought that and I got really high interest rates on it, you know, because I trusted him, right? And and that so, actually pushed me to get a license because I'm like, this is never gonna happen again, I don't wanna ever get screwed again. So that's why I wanted to learn about loans, I wanted to learn about how to, these contracts, things like that. And also I ended up rehabbing it. Yeah. The reason why I bring this up is because now that one bedroom, one bathroom property, look at Zestimate, it's worth at least 1,000,000. And because it's a 9,000 square foot lot, because of the SB nine rule, I can make this a four unit. So I'm actually in the process of doing SB nine on this Nice. Turning it down, and once I'm done with it, it's probably gonna be worth around 2.6. Incredible. Yeah. Huge numbers there.

Mike DeHaan: [44:19] If you're still on it, and you're basically gonna make point $3,000,000 on this one Yeah. After it's all done.

Dan Austin: [44:25] Yep. That's Yep. That's Pretty much. That's wild. Is full circle.

Mike DeHaan: [44:29] And so I guess when you when you bought it, like you said, you trusted this person. What was your original intention? Was it to do the ADU thing, or was it just like to flip the house?

Alvin Uy: [44:37] I had no intention, man, I just wanted a I wanted to get in the game.

Mike DeHaan: [44:42] Yeah, right. You know, I'm like, they're giving away free loans,

Alvin Uy: [44:44] I'm like, hey, why not? You know, I knew at the time I couldn't afford it, but it taught me so much, that one property taught me everything, and it really catapulted me to where I am now. Know, I learned how to house hack in that thing accidentally, because I couldn't afford it. So it forced me to do a lot of adjustments. And so it's probably my biggest lesson that I've done. Yeah.

Mike DeHaan: [45:05] I mean Wow. You took action. That's like the the number one thing to number one step to doing big things is taking action.

Dan Austin: [45:11] 99%. Awesome.

Mike DeHaan: [45:12] That's a great story.

Dan Austin: [45:13] That's super cool. It is.

Mike DeHaan: [45:14] Alright. So second question. What is the number one tip you would give to a small time investor looking to take their business to the next level?

Alvin Uy: [45:21] You mentioned it, take action, take action. You know, that's the first thing that bottlenecks everybody and really just work on your mindset. You know, the biggest bottleneck for everybody is mindset. People usually get stuck with thinking what ifs, you know? Oh man. You just really concentrate on the first, most important first step, start rolling that ball a little bit and just once you get momentum and believe in yourself, there's resources everywhere. Yeah. This is, you you are not trailblazing here. You know, there's resources everywhere. If I can do it, you can do it. Absolutely. Do you have any good resources that you like for mindset stuff? You know, I just read a lot of books on that, and I can't remember some of the titles off the bat, but Jason Dreese actually coached me a little bit, as he did the impossible, he's got a book, Let's see. Honestly, it's just really listening to a lot of podcasts. I religiously listen to books and podcasts every day as part of my morning routine. I do my runs or my walks in the morning, I just listen to a lot of stuff. Love it. So simple. Soak it up. Soak it up. Gap in the game is another one. Gap in the game.

Dan Austin: [46:29] Yeah. Yeah. That's a good mindset one. That that's

Mike DeHaan: [46:31] a good one. Yeah. Awesome. Alright, Alvin. Last question. Where can people find you, follow you, and reach out to you if like them to do so?

Alvin Uy: [46:38] Well, I'm all over the social media now. So I got I'm on Facebook and Instagram under Alvinized, a l d I n I z e d. So you can reach out to me there. I'm there. Perfect.

Dan Austin: [46:50] I love the handle. I love it. Alvinized. Alvinized.

Mike DeHaan: [46:53] Yeah. Love that. That's a great one. Cool. Well, Alvin, man, thanks so much for coming on the show. I really, really appreciate you coming in. And, you know, we barely scratched the surface on a lot of stuff that you're working on. So you guys, if you had any interest in what Alvin said here, and if, I don't know, somebody talking about how they're taking a deal they got ripped off on and they're gonna make $2,500,000 off of it, that doesn't interest you, then go listen to something else because this show is not for you.

Alvin Uy: [47:15] That is the definition of

Mike DeHaan: [47:17] like a sick deal right there.

Dan Austin: [47:18] That's real estate right there.

Mike DeHaan: [47:20] You should go in, give Alvin a follow at his Alvinized Instagram account. Go ahead and shoot him a DM, and maybe see if you can invest with him as well. I'm sure that he would love to bring you into some of his deals that he's working on. Besides that, guys, share this with everyone who might find this interesting, and leave us a five star review. If you don't mind, it's a great way to help us get to the show. But thanks for listening everybody and we'll talk to y'all next week.

Speaker 2: [47:49] Screenshot to Mike@collectingkeys.com for your chance to receive a free collecting keys t shirt.