APN 835-070-018 & APN 835-070-019, Gilroy, CA 95021 For Sale

STOP SCROLLING. THIS IS THE DEAL YOU’VE BEEN WAITING FOR. THIS IS A WEALTH ACCELERATOR DEAL.

Everyone is complaining about 7% interest rates. The average investor is sitting on the sidelines waiting for a miracle.

The professionals are looking where no one else is. I’m standing on 5 prime acres in Silicon Valley with direct frontage on US-101. Approximately 400,000 cars pass this site every day. Most people see agricultural land. I see an income-producing asset.

Here is the math:

THE FINANCING: 1.0% fixed interest through USDA Section 514/516. This program provides low-cost capital for workforce housing development.

THE SPEED: Under the California Employee Housing Act (AB 3035), this qualifies for by-right approval. Timeline is approximately 30–60 days to place modular units on-site.

THE CASH FLOW:

12 units at projected 2026 fair market rents generate approximately $48,000 per month in gross revenue, or nearly $300,000 annually in net cash flow.

A parcel can only have up to 150 Units. At 150 units, projected revenue reaches $600,000 per month, or $7.2 million annually. Over 33 years, that totals $237,600,000 in rental income, excluding future rent increases.

This is a two-part opportunity:

1. Immediate income: Develop 12 to 150 units of farmworker housing using subsidized 1% financing.
2. Long-term upside: Prime highway frontage creates future value for EV charging, fleet operations, or commercial retail.

Most developers spend years navigating approvals. This project is positioned for rapid execution.

The entitlement path is clear. The financing is favorable. Demand for workforce housing remains strong.

WHO IS READY TO OWN THE 101?

List Price: $1,800,000

Silicon Valley, Ca

Investment Summary & Project Estimates:

Scenario 1: USDA 1% Financing (Full Project Capitalization):

This scenario assumes the buyer secures 100% financing through the USDA Section 514/516 program, covering the land purchase, modular units, utility upgrades, and all soft costs.

The home built is up to the buyer. Here are some examples of ways to do a quick built out in less then 30 days.

The buyer can buy Boxable units, modular home or container or traditional housing. Here are some prices of prices on units. Cost Breakdown for a 2-Bedroom Boxabl

Because Boxabl units fold down for shipping, their delivery is efficient, but the "all-in" price for a 2-bedroom setup in a high-cost area like Santa Clara County will be higher than the factory base price.

• Boxable Units (~$120,000 - $150,000): This covers two 20x20 units. One unit acts as the "Kitchen/Living" core, and the second is configured as the "Bedroom" module.

• Shipping & Logistics ($5,000 - $15,000): Boxabl ships from their factory in Las Vegas. Shipping two units to Northern California typically falls in this range.

• Site Prep & Foundation ($25,000 - $50,000): You need a permanent foundation (slab or perimeter) that can support the weight of two connected modules.

• Connection & Utility Hookups ($10,000 - $25,000): This involves "stitching" the two units together and connecting the plumbing and electrical systems to your site’s mains.

Alternative 2-Bedroom Modular Options:

If the Boxabl waitlist is too long or you prefer a single-module design, these models offer a similar "modern prefab" aesthetic with 2-bedroom floor plans already built-in.

2 BHK Tiny House Storey Prefab Villa A unique two-story modular option that maximizes a small footprint. It features 600 sq. ft. of space with 2 bedrooms and a loft that can serve as a home office.

• Price: $68,599.00 (Base)
• Best For: Vertical living on a small lot.

43sqm Manufactured Container House A highly durable galvanized steel structure that comes as a single unit with a pre-installed kitchen and full bathroom.

• Price: $16,500.00 (Base)
• Best For: Rapid deployment and budget-friendly workforce housing.

Total Project Capitalization: $3,200,000 for 12 Farm Worker Housing on the 5 acres:

Scenario 1: The buyer borrows 100% for the purchase of the land, purchase of 12 modular homes, the upgrade of utilities and the soft costs. This based on 2 bedroom Fair Market Rent (FMR) Rates. For the purpose of this example we use a 2 bedroom unit cost $100,000 but the price can go significantly down if the buyer uses containers.

Below is the current 2026 Fair Market Rent (FMR) Rates:

1. Debt Service Math (USDA 1% Loan)

• Total Loan Amount: $3,200,000
• Interest Rate: 1.0% Fixed
• Amortization: 33 Years
• Monthly Debt Service (P&I): ~$9,500
• Annual Debt Service: $114,000

2. Revenue & Net Cash Flow

Based on 12 units at the 2026 HUD Fair Market Rent for 2-bedroom units ($4,030).

• Gross Monthly Income: $48,360
• Operating Expenses (30%): ($14,508)
  • Includes taxes, insurance, maintenance, and management.
• Debt Service (USDA 1%): ($9,500)
• Monthly Net Cash Flow: $24,352
• Annual Net Cash Flow: $292,224

3. Investment Performance

• Cash-on-Cash Return: Infinite (assuming 100% financing / $0 down).
• Debt Coverage Ratio (DCR): 3.56 (indicates an exceptionally stable and low-risk investment).
• Equity Build: The project is estimated to reach 100% equity in ~12.9 years using the net profits to accelerate the principal pay-down.

4. Strategic Advantage

By utilizing H&SC § 17021.6 for "By-Right" approval, the developer avoids the cost and delay of a Use Permit. Additionally, the Elevate Morgan Hill initiative provides streamlined approvals, ensuring that the high-margin cash flow begins as quickly as the modular units can be installed.

Debt Service & Financing (USDA 1% Loan)

This project is modeled using the USDA Section 514/516 Farm Labor Housing loan, which offers highly subsidized interest rates to support affordable agricultural housing.

• Loan Type: USDA Section 514/516 (Agricultural Workforce Housing)
• Interest Rate: 1.0% Fixed
• Amortization: 33 Years
• Estimated Monthly Debt Service: ~$9,500/month
• Total Annual Debt Service: $114,000

Detailed Infrastructure & Utility Upgrades

Based on Santa Clara County requirements for a 12-unit shared system:

• Water Distribution ($27,500): Comprehensive trenching and piping from existing well to 12 individual pads.
• Storage & Pressure ($28,000): New 5,000–10,000 gallon storage tanks with a constant-pressure booster pump system (Fire Safety/Flow compliant).
• Septic System ($45,000): New commercial-grade septic tank and expanded leach field designed for 12 households.
• Electrical Hookups ($18,000): Sub-panels for each unit with lines run from the existing PG&E drop.

Soft Cost & Reserve Estimates

Estimated for USDA/Lender compliance:

• Permit & Inspection Fees ($15,000–$25,000): Covers building permits, Environmental Health clearances, and Fire Marshal inspections.
• Architectural & Engineering (~$20,000): Full site plan including unit placement, septic layout, and fire truck turnaround radius.
• Operating Reserve (~$30,000): 2–3 months of liquidity for initial insurance and maintenance.
• Property Insurance: Builder’s Risk coverage included for the 3–4 month setup phase.

Projected Monthly Financials:

• Estimated Monthly Revenue: $48,360
• Estimated Debt Service (USDA 1%): ($9,500)
• Estimated Operating Expenses (30%): ($14,508)
• Potential Monthly Net Cash Flow: ~$24,352

Financing & Government Support Strategy:

1. Federal Support (USDA Section 514/516)

The USDA is the most powerful source of low-cost financing for this project. Their program is designed specifically to help landowners build on-farm housing for domestic laborers.

• 1% Interest Rate: A fixed-rate, long-term loan (up to 33 years) covering land purchase, construction, and site improvements.
• Grants (Section 516): Potential to qualify for grants covering up to 90% of the project cost (e.g., through a limited partnership with a nonprofit).
• 100% Financing: Available in specific cases where eligibility criteria are met.

2. County and State Support

Santa Clara County offers several active programs and "pots" of money specifically for South County agricultural workers:

• Joe Serna Jr. Farmworker Housing Grant: A state fund (recently secured $2.2M) assisting with farmworker housing initiatives and manufactured home loans.
• Measure A Affordable Housing Bond: $44 million dedicated to South County developments, with units specifically set aside for agricultural workers.
• Office of Supportive Housing (OSH): Acts as a "one-stop shop" to help layer these different grants and bonds onto the project.

3. City of Morgan Hill Support

The city facilitates the project by reducing costs and timelines through the Elevate Morgan Hill initiative:

• Streamlined Approvals (AB 3035): Bypass certain permit processes, saving months of time and significant consultant fees.

• Fee Exemptions: Under state law (H&SC § 17021.6), this 12-unit agricultural phase is often exempt from standard business taxes and local registration fees.

• Local Infrastructure Support: Direct coordination for water and utility infrastructure.

Scenario 2: Hard Money Loan Math (70% LTV)

Standard hard money terms assume a 70% Loan-to-Value (LTV) on the total project cost.

• Total Loan Amount (70% of $3.2M): $2,240,000
• Buyer Down Payment (30%): $960,000
• Interest Rate (Interest Only): 10.0% (Market Average)
• Monthly Interest Payment: $18,667
• Annual Interest Expense: $224,000

Projected Monthly Financials (Hard Money)

• Estimated Monthly Revenue (12 Units @ 2-BR FMR): $48,360
• Hard Money Debt Service (Interest Only): ($18,667)
• Estimated Operating Expenses (30%): ($14,508)
• Potential Monthly Net Cash Flow: $15,185

Scenario 3: Other Options

• The Bridge Strategy: Most developers use the Hard Money option to close on the land in 14–30 days and initiate the modular unit order. This avoids the 6–12 month USDA lead time.

• Refinance Potential: Once the units are placed and the "By-Right" approval is active under H&SC § 17021.6, the buyer can refinance the $2.24M Hard Money into the $3.2M USDA 1% loan, effectively "cashing out" their initial down payment and nearly doubling the monthly cash flow

• Cash Sale

The is already zoned agricultural land and Governor Newsom has already signed a new law regarding expanding housing for farmworkers. It is called the California Employee Housing Act (Health & Safety Code § 17021.6) + Also the Governor signed AB 3035 (Pellerin) which cuts through regulatory red tape by streamlining the approval process for farmworker housing in Santa Clara and Santa Cruz counties, speeding up development to meet the urgent demand for more housing. This is an awesome location. My understanding this process is 30 to 60 way less then going through the traditional entitlement process and it cuts the expenses and time.

It is a beautiful piece of land. Buyer to do due diligence regarding the new laws for building units for farm workers and the laws regarding renting these units to farmworkers or any uses they wish to do on the property or if they wish to build a home on the property. Governor Newsom has already signed a new law regarding expanding housing for farmworkers. It is called the California Employee Housing Act (Health & Safety Code § 17021.6).

In short the new laws are for agriculture land to allow farmworker housing on agriculture land. The new state law AB 3035 (Pellerin) cuts through regulatory red tape by streamlining the approval process for farmworker housing in Santa Clara and Santa Cruz counties, speeding up development to meet the urgent demand for more housing.

No conditional use permit, zoning variance, or discretionary approval required beyond standard agricultural uses. The Governor also signs AB 3035 (Pellerin) cuts through regulatory red tape by streamlining the approval process for farmworker housing in Santa Clara and Santa Cruz counties, speeding up development to meet the urgent demand for more housing.

This vacant 5-acre property sits directly on one of the most heavily traveled corridors in Silicon Valley, boasting 100% frontage on US Route 101.

Also with approximately 400,000 vehicles passing the site every single day, this property offers explosive, non-stop visibility to a constant stream of commuters, tech professionals, and high-income consumers. It’s built-in, massive exposure—without the ongoing cost of billboard advertising. IMMEDIATE FLEXIBILITY VS. THE ULTIMATE VISION While this flat, highly usable acreage offers the immediate flexibility to be farmed or developed into a primary residence with an ADU, the owner recognizes its true, unparalleled value: This site is the ultimate blank canvas.

Also this is a great parcel for the visionary buyer willing to navigate the traditional entitlement process or secure a conditional use permit with the county, the ceiling for this property is limitless. Also it could be ideal for a commercial use such as: Automotive Dealership or Fleet Vehicle Facility, High-Volume Gas Station or Cutting-Edge EV Charging Hub,

Truck Stop or Logistics/Transportation Center, Retail Service Center or High-Exposure Commercial Development. This buyer who would love to use the frontage on US Route 101 must verify this change of use with the city and county.

Reference Appendix

Agricultural Workforce Housing on Agricultural Land (Santa Clara County, CA)

Employee Housing Act | AB 3035 | Section 8 | Morgan Hill & Gilroy

1. Enabling Legislation & Policy Background

AB 3035 – Farmworker Housing (Chaptered 2024)

Expanded the California Employee Housing Act to allow up to 150 multifamily units of agricultural workforce housing on qualifying agricultural land in Santa Clara and Santa Cruz Counties through a streamlined, ministerial approval process.

Bill summary and status (California Digital Democracy):

https://calmatters.digitaldemocracy.org/bills/ca_202320240ab3035

Full bill text (LegiScan):

https://legiscan.com/CA/text/AB3035/id/3012768

Governor Newsom signing announcement (Sept. 24, 2024):

https://www.gov.ca.gov/2024/09/24/governor-newsom-signs-new-laws-to-expand-farmworker-housing-and-cut-red-tape/

Local overview (Morgan Hill / South County focus)

“Farmworker Housing Act Expanded” – Choose Morgan Hill:

https://www.choosemorganhill.com/news/4zbcretmep0ra9j1i57odltb2wm3hn

2. California Employee Housing Act (Permitting Framework)

Overview & regulatory structure

Agricultural workforce housing is treated as an agricultural use, not residential zoning.

Health and safety permitting and oversight are administered by the California Department of Housing and Community Development (HCD).

Key references:

California HCD – Farmworker Housing overview and programs:

https://www.hcd.ca.gov/policy-and-research/intersectional-policy-work/farmworker-housing

County fact sheet explaining Employee Housing Act permits and requirements:

https://humboldtgov.org/DocumentCenter/View/71741/Fact-Sheet---Farmworker-Housing-for-Ag-Employers-PDF

3. Section 8 (Housing Choice Voucher Program)

Program overview

HUD Housing Choice Voucher (Section 8) Program:

https://www.hud.gov/program_offices/public_indian_housing/programs/hcv

Owner participation & approval process (California examples)

Los Angeles County Development Authority – Owner’s Guide:

https://www.lacda.org/docs/librariesprovider25/section-8-program/owners/resources/section-8-landlord-brochure-%287-2021%29.pdf

Housing Authority of the City of Los Angeles (HACLA) – Owner Packet:

https://www.hacla.org/sites/default/files/Section%208/S8%20RFTA%20Packets/RFTA%20HCV/Owner%20Booklet%20-%20HCV%20Finalized%202023-08-29.pdf

Request for Tenancy Approval (RTA / RFTA)

Plain‑language overview of the RFTA process and timing:

https://rentwisela.com/blog/how-to-submit-an-rfta-for-a-section-8-family/

4. Morgan Hill & Gilroy – Cost & Local Project Examples

Recent farmworker housing project (Morgan Hill/Gilroy)

Royal Oak Village – project scope, unit count, and development cost:

https://gilroylife.com/government-farmworker-housing-breaks-ground-a-second-project-is-planned/

Santa Clara County funding and approvals

County of Santa Clara press release on agricultural worker housing approvals:

https://news.santaclaracounty.gov/news-release/county-santa-clara-approves-affordable-housing-project-units-agricultural-workers

Comparable agricultural workforce housing developments

Avila Construction – Agricultural Worker Housing portfolio (South & Central CA):

https://www.avilaconst.com/aghousing

5. Santa Clara County – Local Process & Housing Context

Santa Clara County Consumer & Environmental Protection Agency – Farmworker Housing:

https://cepa.santaclaracounty.gov/farmworker-housing

Background on zoning reform and permitting streamlining (San José Spotlight):

https://sanjosespotlight.com/santa-clara-county-makes-it-easier-to-building-housing-for-agricultural-workers/

Buyer to verify all potential uses with county, city and state and confirm the new state laws regarding workforce housing for farmworkers with a real estate and or land use attorney. Also buyer to verify all information found in the disclosures and the agent's research. Buyer must verify all information.