Building a ADU in backyard

Building a ADU in backyard

Real Estate Agent · Temecula CA · Member since 2019 · 50 posts · 16 votes

I'm trying to build a ADU in my backyard. I am doing owner builder so hiring subs for each job. I have been struggling finding fair priced reliable contractors in my area. If anyone knows a good go to in Temecula California. I am building ground up so any contractors that do framing, plumbing, electrical, roofing, etc. Helps!

Thank you

Murrieta Menifee Winchester Temecula Riverside

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Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
3y

I haven't done this ground up but I have done 2 interior remodels. The first I hired a separate framer and subs. On the 2nd I hired all licensed trades but separately. I would check with your insurance agent and the city. A lot of cities require you to get a work comp policy if you are an owner builder unless you hire all people with their own policies. Some contractors are licensed but have no staff just them so they are exempt from work comp so if they injure themselves you could be on the hook. Your homeowner policy may cover minor repair work but probably not a large construction project. 

I ended up having to get a state fund work comp policy for $5000 which I think is the minimum amount regardless of scope. If you have no track record that would probably what you would have to do. Factor it into your cost and decision. 

It is cheaper, in general, to sub out like you say but if you have no experience sequencing the work and talking to subs you may be scarring them off. They don't want you saying to start in 2 weeks but your framer takes longer and now they can't start for 4 weeks. If your project takes 4 months instead of 2 by hiring a GC it may end up costing more in the long run.

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  • Member since 2019 · 1 post · 1 vote
    3y
    Quote from @Darian Sanayei:

    I'm trying to build a ADU in my backyard. I am doing owner builder so hiring subs for each job. I have been struggling finding fair priced reliable contractors in my area. If anyone knows a good go to in Temecula California. I am building ground up so any contractors that do framing, plumbing, electrical, roofing, etc. Helps!

    Thank you

    Murrieta Menifee Winchester Temecula Riverside


    Subic Bay LLC - 951-323-8417

    Licensed, reliable guy. I'm actually looking into an ADU as well with him.

  • Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
    3y

    I haven't done this ground up but I have done 2 interior remodels. The first I hired a separate framer and subs. On the 2nd I hired all licensed trades but separately. I would check with your insurance agent and the city. A lot of cities require you to get a work comp policy if you are an owner builder unless you hire all people with their own policies. Some contractors are licensed but have no staff just them so they are exempt from work comp so if they injure themselves you could be on the hook. Your homeowner policy may cover minor repair work but probably not a large construction project. 

    I ended up having to get a state fund work comp policy for $5000 which I think is the minimum amount regardless of scope. If you have no track record that would probably what you would have to do. Factor it into your cost and decision. 

    It is cheaper, in general, to sub out like you say but if you have no experience sequencing the work and talking to subs you may be scarring them off. They don't want you saying to start in 2 weeks but your framer takes longer and now they can't start for 4 weeks. If your project takes 4 months instead of 2 by hiring a GC it may end up costing more in the long run.

  • Real Estate Agent · Temecula CA · Member since 2019 · 50 posts · 16 votes
    2y
    Quote from @Darian Sanayei:

    I'm trying to build a ADU in my backyard. I am doing owner builder so hiring subs for each job. I have been struggling finding fair priced reliable contractors in my area. If anyone knows a good go to in Temecula California. I am building ground up so any contractors that do framing, plumbing, electrical, roofing, etc. Helps!

    Thank you

    Murrieta Menifee Winchester Temecula Riverside


    Update: this ADU is finished and rented out. Very happy with how it turned out. Hit a few bumps throughout the process but overall went good and onto the next one!

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y
    Quote from @Darian Sanayei:
    Quote from @Darian Sanayei:

    I'm trying to build a ADU in my backyard. I am doing owner builder so hiring subs for each job. I have been struggling finding fair priced reliable contractors in my area. If anyone knows a good go to in Temecula California. I am building ground up so any contractors that do framing, plumbing, electrical, roofing, etc. Helps!

    Thank you

    Murrieta Menifee Winchester Temecula Riverside


    Update: this ADU is finished and rented out. Very happy with how it turned out. Hit a few bumps throughout the process but overall went good and onto the next one!

    Have you tried to extract the value add; have you gotten an appraisal?

    the value added versus cost to add, especially in single family zoned areas, typically results in a large negative initial position.  recovering this negative position can consume years of the actual cash flow when using realistic expense estimates.  

    Hopefully this is not the case where you added the ADU and the value added by the ADU exceeds the cost of adding the ADU.  

    Best wishes






  • Real Estate Agent · Temecula CA · Member since 2019 · 50 posts · 16 votes
    2y
    Quote from @Dan H.:
    Quote from @Darian Sanayei:
    Quote from @Darian Sanayei:

    I'm trying to build a ADU in my backyard. I am doing owner builder so hiring subs for each job. I have been struggling finding fair priced reliable contractors in my area. If anyone knows a good go to in Temecula California. I am building ground up so any contractors that do framing, plumbing, electrical, roofing, etc. Helps!

    Thank you

    Murrieta Menifee Winchester Temecula Riverside


    Update: this ADU is finished and rented out. Very happy with how it turned out. Hit a few bumps throughout the process but overall went good and onto the next one!

    Have you tried to extract the value add; have you gotten an appraisal?

    the value added versus cost to add, especially in single family zoned areas, typically results in a large negative initial position.  recovering this negative position can consume years of the actual cash flow when using realistic expense estimates.  

    Hopefully this is not the case where you added the ADU and the value added by the ADU exceeds the cost of adding the ADU.  

    Best wishes






    I did not do a full appraisal, just brokers opinion to get the PMI removed which was the goal. I personally think there is just not enough comps yet to show the true value of ADU's. This property cashflows very well now, so I do not plan to sell for quite some time. 

    I would love to purchase a property that has done all of the work already, and cashflows. So if you see any let me know and ill buy it!
  • Contractor · MS · Member since 2013 · 70 posts · 12 votes
    1y

    I do construction management for investors and I usually find them good contractors at good prices. 

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