About Us
Red Door Investing, LLC
Red Door Investing’s (Red Door) mission is to maximize investor profit through the development of property in mid-level markets throughout Los Angeles County. We do this by renovating these properties and maximizing the accessory dwelling unit (ADU) laws in the state of California to add units to single-family and multi-family residences. We have both short-term and multi-year investments vehicles, as well as a special 1031 Exchange Program. Both our short-term and multi-year investments have an annualized targeted return of 10% per year over the life of the project, while our 1031 Exchange Program is based on our client’s goals.
An ADU is a separate unit/apartment that can be legally added to an existing property as either a rental or separate dwelling. ADUs have full kitchens and bathrooms and have separate bedrooms and living areas. ADUs were legalized by the State of California in 2018 in response to the state’s housing crunch and have separate utilities, utility meters and their own address. There have been numerous bills in the state legislature since then that have liberalized the creation of these units. They can be built by converting an existing structure like a garage, or can be a separate structure built on existing land. While ADUs are governed by state law, the permitting and development of them is handled by localities. Mid-level markets are safe and stable neighborhoods with numerous single-family and multi-family homes
that are in the lower price range of the exceedingly expensive Los Angeles housing market. Examples of these neighborhoods include Panorama City, Northridge, Gardena and Hawthorne. All of these are family-friendly neighborhoods that have a large inventory of affordable houses and buildings with either an attached or detached garage, or space on the property to build a separate ADU. Houses targeted by Red Door have significant cosmetic flaws but are structurally sound. Cosmetic flaws can include the need for new floors, drywall, bathrooms, kitchens, etc. Red Door focuses on houses that owner-users pass on. Buildings targeted by Red Door have a specific layout that will allow for the addition of multiple ADUs, while preserving parking for existing tenants.
Through the initial model developed by the principals of Red Door in 2020, those individuals demonstrated how an investment representing a 25% down payment for a property and approximately $135,000 in construction costs could yield investors up to 12%-14% annualized profit in a flat real estate market.
Since that time, Red Door has developed a strong track record of completing projects for investors utilizing its strategy and producing annualized returns of over 10%. Red Door must emphasize that all real estate is subject to market forces and does not guarantee a profit.