In markets like Orange County, where appreciation has been strong and consistent, demand remains steady, making it an attractive option for long-term investors. The challenge, however, is that breaking even on an investment property here often requires a hefty 50–60% down payment to break even on an investment property especially after home values post-COVID.
It’s time to think smarter, finding ways to make real estate in California pay you now while still gaining that Orange County appreciation, not just someday in the future.
Why Is It Hard to Cashflow on Investment Properties in California?
The best kind of ADU (Accessory Dwelling Unit) to build for investing is a detached ADU. In Orange County, many cities let you build a detached ADU up to 1,200 square feet, depending on local rules.
A detached ADU is a small home that stands on its own in the backyard. It’s the best choice for most investors because:
You can charge more rent. Tenants like having their own private space.
It raises your property value. A second, separate unit adds more worth to your home.
Tenants stay longer. People who rent a detached ADU often stay because it feels like a real home.
It fits better on corner lots. Corner lots give you more room and more ways to place the ADU for privacy and easy access.
What Is the Best Type of ADU to Build for Investment Properties?
Working with an ADU Realtor gives you an advantage that most investors don’t have. Dylan Serna helps experienced investors identify and find ADU potential properties.
Here’s how Dylan helps his clients:
Here are some of what Dylan the ADU Realtor provides:
ADU Consulation: Go over goals with ADU, establish all in budget and how much cash flow you should expect per month
Main Home Makeover Without Lifting a Finger System: Takes the stress out of organizing contractors so your home is rent-ready and cash-flowing by the time your first mortgage payment hits.
The Underwrite-It-First Profit Plan : We underwrite the property you’re interested in before you offer— analyzing the mortgage payment, ADU and main home rents, to ensure it’s a solid, profitable deal.
Step-by-step support from property search to ADU completion, ensuring each project stays profitable.
How can an ADU Realtor can help Investors Build Smarter Portfolios?
What are the Steps to take if want to buy an investment property to build an ADU?
We call this Process The Serna 5:
Step 1: “Vision Session” starts with a one-on-one consultation with Dylan Serna, ADU Realtor in Orange County. Together, you’ll clarify your investment goals, timeline, and budget, and decide whether to build an ADU on a property you own or buy a new ADU-ready property.
Step 1: The Vision Session
Step 2: “The Treasure Hunt” transitions to touring handpicked list of Single Family Homes that have ADU potential based on your goals. Walk through ADU potential lots and narrow down the choices that best fit your investment needs. Once you find the right property, we start offering. Once our offer is accepted, we go into escrow.
Step 2: The Treasure Hunt
Step 3: “The Escrow Zone” starts after getting an offer accepted. We are in escrow! It’s still the usual process of inspection, appraisal, and due diligence - just an added step which is: Dylan will connect you with a trusted ADU specialist designer to perform a feasibility report. This report is like a checklist to see help ensure that your ADU is possible and the best way to do it.
Step 3: The Escrow Zone
Step 4: Signed, Sealed, Start Renovating
Step 4: “Signed, Sealed, Start Renovating” begins when the home closes and is in your name and it’s time to renovate the main home that way you can get a renter in while it cash flows while the ADU is being built.
Step 5: “Build and Rent” transitions once plans have been submitted to the city and approved, you can start having contractors build the ADU. After the ADU is finished, the ADU passes the final city inspection and receives the Certificate of Occupancy, you’re ready to rent it out and enjoy the income.
Step 5: “Build & Rent”
Ready to start Step 1- The Vision Session?
After Filling out your information, Dylan will contact you with a time for your 30 minute ADU Vision Session - Completely free and over Google Meets