Southern California | How to Look for ADU Potential on Property?

Question

Hello BP Community!

A first post for me! I learned about BP when I first learned about ADUs just about a month ago and have found great value in these forums, so thank you all for your contribution!

I'm shopping around for a SFH with ADU potential. I stumbled across a listing in North Long Beach with an unpermitted garage that was converted into a 1 BD/1 BR unit. A perfect opportunity to live in that unit and rent out the primary unit (3 BD/2 BR). Would've been at least... I hesitated and the property sold, unfortunately. My concerns that held me back at the time was the process to get it permitted at the time (i.e. would city require tear down to inspect, or do I just need to bring it up to code, etc.). I spoke to the Planning Dept and it's case-by-case depending on the condition. My agent mentioned her friend had it done (new ADU), but was required to tear down existing garage (costing $200k for a new garage with upper unit). I also spoke with an ADU Contractor who advised me to look out for utility poles and power lines. Are there other things I should be looking out for other than the obvious (zoning requirements, square footage, etc.)?

I'm hoping to essentially have an internal checklist when going house hunting. This will be a first home purchase for me and I'm excited for what's to come.

Thank you all in advance! I appreciate any insight that can be shared.

Kenny

Hai G. · Answer

Also a relatively flat lot to reduce ADU construction cost

Andrew Aladjadjian · Answer

@Kenny Chau

Hi Kenny! Welcome to the BP community. Be sure to listen to the podcasts of BP as well as it contains so much information on different angles of RE investing.

As far as what to look for about building an ADU, it seems you have the basics down. The property you mentioned could have been a headache as you would have to bring the garage to code, and I believe it is more cost effective to buy a property with a garage (detached or attached) and convert from scratch.

Each city has its own ordinance regarding ADU's however they must comply with the newly passed state law (AB-68).

I would recommend buying a property with an ATTACHED ADU as this will give you better options to build an ADU and JADU. a JADU must be withing (attached) to a standing existing (or proposed) structure. This then gives you the option of also building a separate and new ADU in the future. If you convert a detached garage to an ADU you must then split part of the main dwelling or ADU to build the JADU. However, be aware as JADU requires owner occupancy, but an ADU does not.

Dan H. · Answer

>The property you mentioned could have been a headache as you would have to bring the garage to code

One of the 6 ADU regulations (AB68, AB881, SB13, AB587, AB670, AB671), but I forget which one, indicates that the only codes that can be enforced to convert an existing unpermitted unit to a permitted ADU are those related to health and safety.  The big one this avoids for the unpermitted units is the solar requirement.

So for the case of the OP, if he had purchased the RE with the unpermitted unit in the garage he would not have had to bring the unit up to all current codes.

If someone knows which ADU regulation this is indicated in maybe they can post the regulation reference.

Paul Dashevsky · Answer

Hi Kenny-

I've written a few blogs about what an investor or first time buyer should look for in a property with ADU potential.  The above comments have some great advice.  I would add a few things. As you have probably figured out, each municipality has its own ordinance and guidelines, so make sure to do your research at each specific city.  For properties in city of Los Angeles (with which I'm most familiar), for the most cost effective solution, look for a house with a permitted garage in the back. Make sure that the garage does NOT have power lines running over the top of it.  The location of the existing garage is "grandfathered in", so there are no setback requirements to converting it to ADU.

The city of LA will make you run a new sewer line from the ADU to your front yard to connect to the main sewer. This can be a pretty large cost if 1) the ADU is very far from the street or 2) you have to cut into a concrete driveway to run the sewer (and then patch the concrete). Something to consider.

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Will Barnard · Answer

Hi Kenny,

Welcome to BP Nation. ADU's are the talk of the town right now. Recently spoke at a real estate meetup (FIBI) in the Manhattan Beach area and the room was packed, proof of the buzz. If you are looking to live in the ADU so you can rent out the main house, I think that is a fantastic way to house hack and your best bet is looking for older homes with detached garages in the back yard. As other mentioned, you want to pay close attention to any above ground utility lines making sure you have proper clearance from them (if not, it will require LADWP to provide approvals which takes them forever.). You should also pay attention to the length from the garage to the street as your sewer line run must go direct from ADU to main sewer line, it can not connect to the main house line. Other than that, you DON'T need to worry about setbacks if the garage is existing, only if you intend to expand it and as such, you only need 4ft from rear and side now. Best part, it has to be approved in 60 days from the date you submit to plan check.

I have built ADU's and with the new laws, have several in the works as more and more people are coming to me about building them (I'm also a GC).

One of my biggest investment mistakes in my career was not keeping more than I did as I flipped most. With the new ADU laws, I have many more opportunities now to actually cash flow positive investments right here in my backyard that I otherwise would not have been able to do.

Hai G. · Answer

@Kenny Chau

I’m also looking for SFH with potential to add ADU(s) in the Bay Area. What I look for are ease of conversion (you can get a sense of the layout by walking the property), size of lot (surprisingly it doesn’t have to be massive if the layout is right), and easements (things like power line, telephone pole, etc where others have the right to use your land). I’m guessing this line of thinking is applicable to SoCal as well.

Omar Merced · Answer

Hi Kenny, I happen to be helping a family member look into adding an ADU in Glendale. After looking around MaxableSpace.com seems to know what they are doing. I haven't worked with them yet but impressed so far. I am trying to make time to go to one of their events.

Kenny Chau · Answer

@Andrew Aladjadjian

Thanks Andrew - I'll definitely check out the podcasts! Good idea on considering having both an JADU and an ADU on property. Giving it some thought, I may be better off with just an ADU in case I prefer to rent it out instead of selling.

Jo-Ann Lapin · Answer

Sounds like they did you a favor. Very frustrating as each city has different ordinances etc.

Southern California | How to Look for ADU Potential on Property?

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