Imperial Beach Ca ADU

[Jake Spockets]

Will having ADU utilities on a separate meter have negative long term value ramifications? I would like to discuss, the potential risk for long term property value decline due to mutli-unit classification by lenders who may disqualify single-family applicants. Do separate utilities limit potential qualified buyers later? A cup of coffee on me for the best rundown on this :-)

[Oscar Miguel]

Originally posted by @Jake Spockets:

Thanks Mark and Whitney. An associate in the lending industry sent me a break down on how they conduct comps. I agree that separate utilities are far more pragmatic for the delineation of utility bills however I am was curious if anyone has run into problems with property classification disputes when it comes time to sell and if the pain of single meter is worth the risk of unfavorable property classification for selling to a VA buyer (a majority of this market)

Hi Jake, I'm pleased to have come across your post.  I'm also doing something similar in IB, and the more of us do this (legally) the more comps will be available to help us with valuations and also in working with the city.

I want to start by saying that the City of Imperial Beach has been very good to work with. I did a lot of research last year/early this year on ADU as I knew it was what I wanted to do with my property. I was ahead of the city in knowledge and they have been great to work with and have addressed items I didn't agree with in a very friendly and non-confrontational manner. I sometimes work with city planners for my W2 and that's not always the case!

Few things that I've found out from going to ADU conferences, speaking with multiple professionals in person, on the internet and here in BP:

*Accurate comps for ADU's are going to be slow-moving, but will eventually catch up and help. Much like solar back when it was new.

*Electric hasn't been an issue.  The power company just wanted an address for the new work order, and the city was quick to provide the new address.

*Water in IB could be tricky.  I was quoted by the water company that it would be upwards of $5k to tear up the street and bring a new water meter.  Because of this I will be tapping to the main house and installing a sub-meter. I'll either pay water once  I move out, or I'll back bill the tenants based on their usage.

*I will include a link to a recent post I put in BP talking about what I just found out about refinancing. It will have to be cash or portfolio until guidelines change...as of right now, it won't be touched by traditional lending if it's a duplex or more AND has an ADU.

*Adding an ADU will not change the property type. So if you have an SFR and add an ADU, it will remain SFR. Same with Duplex or Multi-Family. I don't want to go on a tangent but in the ADU conference I went to, a congressman that helped write the bill explained that 1-4 unit "residential" properties could have as many as 8 total independent living spaces with the current laws.

I hope this helps.  Congrats on your project, I'm hoping to be done with permitting soon.  Here's the link to the topic I started recently:

https://www.biggerpockets.com/forums/432/topics/825864-refi-issues-when-adding-an-adu-to-a-duplex-in-ca

Oscar