Adding ADU to a duplex in California

[David Maldonado]

Hey everyone,

I am in the process of closing on my next home to BRRRR. I was planning on starting the process to build an ADU as soon as I close, but I just found out the SFH is on a r-3 lot! I'm debating whether to build an ADU or a duplex on the back yard. Permits would be significantly cheaper for the ADU and would not require their own meters, but the equity gain isn't going to be nearly as much as adding another legit unit to a multifamily. On the other hand, I believe adding a dulpex would be much more expensive in permits and I think they require their own meters, but comps for multifamilys are high in my city.

I'm in it for the cash flow but I'm getting this propety for 290k and comps for mulitfamilys are very high in my city.

my estimated cost for a detached adu would be 40-50k (I've already built one for 35k before the reduction in permit costs for those who are about to say that's way to low) and I can only assume adding a duplex would cost much more due to higher costs in permits and meter installations.

What do y'all think is the better strategy?