ADUs in North County San Deigo

[Michelle Park Senyard]

In addition to our long-distance real estate investment, my husband and I want to build out an attached ADU out of our 3rd garage port. Does anyone have experience, successes, or failures they learned from, while building attached ADUs on their property, that they can share? Other questions we have for people with experience in ADU building:

• Are there banks people recommend for getting a reasonable HELOC interest rate?
• We've had a few ADU-building companies come to look at our potential ADU lot size and they've quoted us $270K-$400K which is outrageous, so our hope is that we can bring the total cost down to $100-$200K max if we do the interior design and project managing ourselves. Any tips on how to cut down costs without going the all-inclusive ADU builder route?
• How are comps for homes with ADUs? How much value have they added to your property? 
• Has it been easy to rent an ADU out in North County San Diego?
• Anything we should be aware of?

Thanks in advance!

[Salvador Jimenez]

Michelle - Dan brings up some value points. 

Maybe you should analyze your deal by understanding what the converted ADU would rent for. For example, a 3-car garage will yield you around a 750 sf ADU. That is enough space for a 2 bedroom 2 bath ADU. Search in your area what a 2 bedroom apt. rents for... let's say $2,600 for a typical 2-bed apartment unit. Your ADU will be a newly built non-apartment 2 bedroom unit so it should rent for about 2,800 - 2,900/mo. (please verify these numbers). The ADU should bring in around 34k - 36k per year. Let's assume the ADU will cost you 200k (I personally would not pay north of that figure to convert your garage). So that's an estimated 17% ROI on your investment. In 6 years you should recover your invested cash. And if you're ok with that then pull the trigger and convert the garage. That's the way I would look at it.

Good luck!