To ADU or not ADU in Los Angeles on a Flip.

[Mel Hayes]

Hi all, I'm doing a flip where the original owner converted the 2 garage into a bonus room and added a carport to compensate. The room is 324 sqft so it has the space to be converted into an ADU and no doubt would add a lot of value but I have some concerns about doing this on a flip. ADU's are expensive and from what I'm seeing, properties that have ADU's sit on the market a longer than conventional homes because they are priced higher than other homes in the same market. My idea for this room is to create another bedroom, which also increases the value and will not be nearly as expensive nor take the amount of time that building out an ADU will take. I would love to hear from any agents who work the L.A market about selling or buying homes that have ADUs. Am I correct that they sit on the market longer? Have you had any trouble selling a house with an ADU? If there are any L.A flippers who might read this, have you done any garage conversions to ADU's? I would love to get BP's thoughts on this.

Thanks,

[Rick Albert]

Hey Mel,

Check the comps but right now there is an appraisal issue with ADUs.  You will spend $100K but the most I have ever seen on an appraisal is about $45k on a refinance in the Valley and about $75K on the Westside.

See about converting it into an rec room and see if that cost and timeline is any different.

Good luck!