Experience turning unwarranted/unpermitted unit into a legal one?

[Katrina Razavi]

Hi BP Friends! I'm considering a SFR purchase in the city. The downstairs "unit" (where the seller currently lives and will leave after sale) is unwarranted and unpermitted. There's a kitchen, bathroom 2 rooms and living area down there (part of which is the garage). The upstairs (3BR) is being rented out. My ideal scenario is to find a way to "house hack" where I can live in the upstairs and convert the downstairs into a legal and up-to-code second unit with a usable garage. But is this realistic or am I asking for a TON of added legal costs and headaches? I don't mind spending a few grand to bring it up to code, but not sure how difficult this process is.

A few notes:

• Zoning: R2
• Rents: Close to market rate so I don't even mind living in the downstairs (unpermitted) area and continuing renting it to the folks upstairs temporarily.  
• I'm not at all considering putting tenants in the unwarranted downstairs. The only person that would live there while unwarranted, would be myself.

Would love any advice or feedback from the community. Thanks!

[Dan Redmond]

I would suggest looking for another deal. Many issues may arise. The main one being adding a legal second unit may well turn both units into a situation under the the governance of rent control. You do not what to go there. Currently single family housing is not under rent control no matter when it was built. Of course the City does not notify you of this in the ADU mentioned above. But please read here,

 http://sfrb.org/topic-no-019-partial-exemption-cer...

then make up your own mind. Please remember that the City is always attempting to add to rent controlled units. Good luck.