SoCal - Buying a Property and Building an ADU - Is It Worth it?

[Dave Chan]

Hey everyone. I am currently looking at a house in the 1.2mm range. I believe I can rent the house for 3500-4000. The home has a detached garage. My payments on the property will likely be 5500 per month. I was planning on converting a detached garage into an ADU. After converting the garage, I was planning on living in the ADU and renting out the main house. The cool part is that the home is 1/3 of a mile away from the metro station.

Does it make sense for me to convert a garage in the 1.2mm range? Do tenants renting out homes not want to rent a home that has a parking space but not garage parking? The backyard space is small, but I was planning on dividing up the backyard with bushes so that it is private for the ADU and also the main house.

[Joel Calkins]

Let me start this off by saying the building is HARD! And getting the permits and zoning required to do this especially in California is probably HARDER!

Don't let this stray you though, some of the best wealth to be made comes from hard work and sweat equity! As Brandon said in a recent BP podcast, "Run at hard".

The average cost for adding an 800 sq ADU in California is $150,000. So make sure you have the funds, and be prepared to go over your budget.

Also, you will need a very competent group of engineers and contractors, to do this correctly.

Do plenty of due diligence and give your municipality zoning board to get the ball rolling.

If you have any other questions don't hesitate to contact me!