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Why to hire licensed General Contractor?

Home remodeling and construction projects are a serious matter. Steps can be taken to make the process easier for you, but it is not a good idea to cut corners just because it’s convenient. Cutting corners can lead to much bigger problems than a long renovation process, including paying more for repairments from mistakes along the way. Hiring a renovation or general contractor to assist you with your home renovation project is the safest way to successfully remodel your home, and it is also the most cost-efficient. Not only are general contractors on a mission to get your job done as quickly and successfully as possible, but they are also on a mission to ensure you remain within your budget and save you as much money as possible. If you are searching for contracting services in San Diego, McMillin has you covered. First, let us point out the benefits that come with hiring a general contractor. Here are some benefits to hiring a general contractor:

Insurance Coverage of General Contractors

Remodeling is a very expensive process when it comes to buying the right materials because the cheapest materials are not a good choice. While that part may be expensive, there is no need to stress over the price of a general contractor, as it is covered by insurance!

Well-Organized Schedule

Let’s be honest, renovations are a huge hassle, and can take several months if done without a renovation contractor. General contractors bear all of the responsibility for the time management of your construction process, and they are experts at making sure it is done as quickly and conveniently as possible, while also guaranteeing it is a job well done.

Budget Management

The best quality general contractors have funds that are enough to keep your project flowing. Subcontractors oftentimes threaten to step away from your job unless paid. General contractors are guaranteed to continue your project no matter your budget so the job is done on time.

Money Savings

When you or someone else who is not a professional when it comes to renovations attempts to remodel your house on your own, you will most likely end up paying more in the long run while trying to fix mistakes made in the process. General contractors are experts in doing the job right. General contractors also have the option to buy the best products available in bulk, so you do not have to spend your entire budget on certain materials.

Property Value Improvement

The worth of your home will undoubtedly increase when renovating your home, especially when you have a professional helping you do the job. One of the best ways to increase your home’s property value is through kitchen remodeling, as kitchen appliances are always upgrading and leaning toward more modernized looks.

High Experience Levels

General contractors are truly experts in renovation. More experience leads to a more organized process. The general contractor is in charge of overseeing the entirety of your home renovation process, so they will not miss a beat when it comes to sharing necessary suggestions in cost-saving or higher quality materials. General contractors are also always there in the event that an emergency may occur.

Customizable Services

General contractors are dedicated to make your dream a reality, no matter what you are deciding to build. Your job is to share your ideas, wants and goals, and a general contractor’s job is to make it happen. Do not worry about how niche the task is or the size of it. General contractors will make sure your job is done, no hassle.

SB-9 California Explained…

In Fall 2021, State of California approved process for densifying single-family properties across the entire state. Maruti Builders have extensively reviewed the bill and its implementation by various cities in San Jose, Fremont and Milpitas. We can help our customers to maximize potential of their residential lot.

Senate Bill 9 (SB 9) enables creation of a duplex on a single-family lot and/or subdivision of the lot to construct either a single-family or duplex home on each subdivision. In addition, some cities have allowed ADUs to be constructed on a property that contains a duplex. All cities in California must implement SB 9.

Senate Bill 10 (SB 10) enables cities to up-zone areas close to job centers, transit, and existing urbanized areas to allow up to 10 units on a property — subject to setbacks, easements, and other development standards as permitted by the new law — without having to go through the California Environmental Quality Act review process. SB 10 is optional and not all cities have agreed to implement this.

Most of the cities have effected this bill from Jan 1, 2022.

Zoning District R-1-8 R-1-5 R-1-2 R-1-1 R-1-RR R-2 R-M R-MH
Minimum Front Setback 20' 20' 30' 30' 50' 15' 10' 15'

What can I build under SB 9?

  • On an existing single-family zoned lot (not created by an SB 9 subdivision): You may of course build a single-family home but you also have the option to build a two-family residence (duplex). You may remodel an existing single-family home as a duplex; you may demolish a single-family home and rebuild it as a duplex; or on a vacant lot, you may build duplex. After the duplex is constructed, and as allowed by setback requirements, you may add up to two ADUs for a total of no more than four units on the property.
  • On lots created by an SB 9 subdivision: You may build no more than two units on each of the lots resulting from the subdivision. On each lot, you may build:
  • a duplex; or
  • a single-family home plus an ADU or Junior ADU (JADU); or
  • a duplex on one lot and on the other lot, a single-family home and, if desired, an ADU.
  • On lots that already contain a duplex or multifamily residence: These are not eligible to use the provisions of SB 9, but they may add ADUs.

Here are front setback requirements in City of San Jose:

(A) Duplex Project on Single Family Lot:

(B) Single Family parcel subdivision (Zoning must begin with R-1):

Some of the common restrictions:

  • City MUST only impose objective8 zoning standards, subdivision standards, and design standards (they may impose a local ordinance to set these standards).
  • Projects must follow local yard, height, lot coverage, and other development standards.
  • City MAY NOT require rear or side setbacks of more than 4 feet, and cannot require any setback if utilizing an existing structure or rebuilding a same-dimensional structure in the same location as an existing structure
  • Project MAY be denied if a building official makes a written finding of specific, adverse impacts on public health or safety based on inconsistency with objective standards, with no feasible method to mitigate or avoid impact
  • City MAY require 1 parking space/unit, unless the project is: o Within 1/2 mile of “high-quality transit corridor” or “major transit stop”
  • City MUST require that units created by SB 9 are not used for short-term rental (up to 30 days)
  • City MUST allow proposed adjacent or connected structures as long as they comply with building codes and are “sufficient to allow separate conveyance”
  • HOAs MAY restrict use of SB 9

Steps for project application:

Step 1: Confirm that your project is eligible by working with Maruti Builders LLC.
Step 2: Submit SB-9 application packet to the city with all required details.
Step 3: City will perform completeness and eligibility review with 30 days and either decline or approve your application in 60 days.
Step 4: Submit for building and/or engineering approval.

What is real estate syndication?

Real estate syndication is a way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own. In the past, only the wealthiest and most connected individuals could participate in real estate syndications. After all, these syndications would usually invest multi-millions in commercial real estate properties around the country.

Real Estate Syndication Basics

Real estate syndication is a transaction between a Sponsor and a group of Investors.

As the manager and operator of the deal, the Sponsor invests the sweat equity. This includes scouting out the property and raising funds. In addition, the Sponsor acquires and manages the investment property’s day-to-day operations. Meanwhile, the Investors provide most of the financial equity.

Most importantly, the more the Sponsor invests in the deal, the better for the Investor. You want the Sponsor to have as much skin in the game as possible.

Real Estate Syndication Legal Structure

Syndications are usually structured as a Limited Liability Company or a Limited Partnership. The Sponsor participates as the General Partner or Manager. And the investors participate as limited partners or passive members. Further, the LLC Operating Agreement or LP Partnership Agreement are vital documents. They set forth the rights of the Sponsor and Investors. This includes rights to distributions, voting rights, and the Sponsor’s rights to fees for managing the investment.

The LLC or Limited Partnership structure is very similar to the set ups of other private funds in the Venture Capital, Private Equity, and Venture Debt space. Such legal entities are there to protect both the Sponsor and the Limited Partners if the deal goes south.

Real Estate Syndication Profits

Property appreciation and rental income are the two main ways the Sponsor and the Limited Partners make money from real estate syndication.

Rental income from a syndicated property is distributed to investors from the Sponsor. This typically occurs on a monthly or quarterly basis according to preset terms. A property’s value usually appreciates over time. Thus, investors can net higher rents and earn larger profits when the property is sold.

Payment of rental income or profits depends upon the time the investment needs to mature; some types of syndications are over within 6-12 months while others can take 7-10 years. Everyone who invests receives some share of the profits.

Sponsor’s often take an upfront profit at the beginning of the deal for sourcing and acquiring the property. This is call and acquisition fee. An average acquisition fee of 1% (although it can be anywhere from .5 to 2% depending upon the transaction).

Before a Sponsor shares in the profits for their work as manager and promoter, all investors receive what is called a ‘preferred return.’ The preferred return is a benchmark payment distributed to all investors. That is usually about 5-10% annually of the initial money invested.

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