top of page
Residential Buildings

Why Invest in
Multi-Family ADU,
with Solidon?

  • What is ADU? (Pg 1)

  • Safe Investment (Pg 2)

  • Return on Investment (Pg 3)

  • Steady Rental Income (Pg 4)

  • Tax Advantage (Pg 5)

  • Ability to Leverage Funds (Pg 6)

  • Diversification of Assets (Pg 7)

  • Trusted Person (Pg 8)

Return on Investment
(in a different way)

Cap Rate - Multi Family.JPG

Multi Family 
LA Market Cap Rate: 4.00%

Multi Family has the lowest CAP rate, 4.00%

A lower cap rate generally indicates a lower potential return on investment.

However,
a lower CAP rate can also mean a higher appreciation of the property if its net income increases.  As you can see below, majority of returns are expected to be achieved via appreciation at time of sale of the property or cash out from the property which is anticipated to occur in Q4 2025.

CURRENT

WHAT IF

NET INCOME (Yearly)
CAP RATE
PROPERTY VALUE

$84,000 (40% Increase)
4.00%
$2,100,000

$600,000 Gain

$60,000
4.00%
$1,500,000

<Comparison of Property Value based on CAP rate & Income Increase>

CURRENT

WHAT IF

NET INCOME (Yearly)
CAP RATE
PROPERTY VALUE

$112,500 (25% Increase)
6.00%
$1,875,000

$375,000 Gain

$90,000
6.00%
$1,500,000

$600,000 Gain vs $375,000

Market Price vs Cost to Build

Price per unit.JPG

2023 Q1
Price / Unit: $405,988 

Average Market Price per Unit: $406,000

Average Square Footage of Each Unit: 810 sf

Average Market Price per SF:                  $501

Average Construction Cost per SF:        $250

Immediate Gain after Construction:        $251 per sf

Immediate Gain after 2 ADUs
(total 1,600 sf):

 

$401,600

  • How we maximize "Return on Investment"

    • Potential rent increase (Limited by rent control)

    • Potential to build at least 2 ADUs (Carport or Vacant Land)

    • Number of units between 4 and 8 (25% to 50% increase in number of units)

Page 3

bottom of page