Alvin Uy
Alvin Uy has been a guest on Collecting Keys, the real estate investing podcast hosted by Mike DeHaan, Dan Austin and Dylan Koch.
Building ADUs for HUGE Value Add with Alvin Uy
Alvin Uy, an LA-based investor and former design-agency owner and Shark Tank contestant, explains how he uses California's ADU and SB9 laws to force value on properties in one of the country's toughest markets. He walks through a completed BRRRR where a $920K two-bed house became a three-unit property appraised above $2 million, and covers his build costs, financing terms and how he finds deals on and off the MLS.
Key takeaways
- Alvin's ADU BRRRR: bought at $920K off market (plus a $20K wholesale fee), spent about $320K expanding the house to a 4/3 and converting the detached garage into a 700 sq ft ADU, ended up all in around $1.37M and appraised above $2M — a 70% LTV cash-out returned all his capital plus $52K.
- In California an ADU is allowed by right; SB9 lets you add a second unit to a large enough lot, which then permits two ADUs. Alvin is also buying 4-unit multifamily and converting to 6 units by adding two ADUs.
- The margin is in build cost versus retail: he builds new ADU space for roughly $200-$250 per square foot (about $100 or less for garage conversions) in a market where finished space trades for at least $500 per square foot, and up to $900 on one project.
- AB1033, newly passed at the time of recording, allows ADUs to be sold separately — which Alvin expects to change appraisals and open new lending options, so he's building and holding ahead of that curve.