Another ADU Appraisal Post!

[Alejandro F.]

Hi All!

We are in the process of building an ADU at our primary residence. In our area in San Diego, it seems like there are ADUs popping up all over the place! However, there are no comps in our area to help gauge the future value of our home with an ADU. Our strategy is to build the ADU and do a cash-out refinance to pull out as much equity as possible. Being able to pull out 100% of the cost of the ADU would be great, but we understand this may not be realistic.

Does anyone have any experience with ADU appraisals they can share?

[Steven Nguyen]

Hello Alejandro,

I was shared this post by another BP member in the Bay Area and you may benefit from this information as well. I was planning on building an ADU in my backyard as well, but as posted above, you can get a better ROI elsewhere if unable to pull out your equity. For the cost of an ADU (~280k), you can put a down on a 20plex in another state for example.

Hi everyone, wanted to share with you a great way to tap into the equity built from your ADU.

The problem today: most appraisers used by traditional lenders would give ADU square footage a second-class treatment than the main house (as some of your mentioned above) since there aren't that many comps and they're trying to be conservative.

However, you can consider taking out a HELOC/doing cash-out refi through Figure.com (HELOC up to $250k, Cash-out refi up to $1M). I just took out a 30-year fixed-rate HELOC through Figure from my San Jose property that has an ADU on it. Unlike the other lenders, Figure.com does automatic appraisal (without a human involved) based on public data and they treat ADU square footage the same as the main house square footage. Because their generous appraisal value, I was able to take out all the cash I invested into the ADU (plus some more). The whole process only took 2 weeks and I'm really happy about it. In fact, you can check your property's appraised value by simply filing out the questions on their website. If you have an ADU on your property, it's super easy to find out approximately how much you can take out through just a few clicks with only a soft credit pull...