Illegal studios and converted garage/basements risky investment?

[Jesus Magana]

Hey Bigger Pockets Community,

Been looking for my first Oakland investment to house hack and I've came to realize that there are ALOT of single-family homes with illegal studio or illegal converted car garages/basement. From a REI point of view this is both promising and risky. On one end you have the potential for additional income and on the other hand you risk having to take everything down because it is not up to code. This home is in a C class neighborhood (Eastmont) and is almost 100 yrs old. I know this will limit my tenant pool, but from your perspective, is the risk worth the reward? From your experience, is it worth trying to bring these spaces up to code? How could I bring these spaces up to code?

Appreciate any guidance/insights here. Thank you all!

Jesus

[Angelou Masters]

they will definitely ask you for a set of plans to show what is there now, which will include a site/plot plan. You will have to bring everything up to code if it is not such as egress windows in a bedroom, electrical, plumbing etc. The plans will not be any big obstacle to overcome so don't worry. Oakland like most cities want ADU's because of the shortage of homes to house our citizens. The planning department will give you a detail list of what the need. They also have you to remove some sheetrock or other areas to take a peak and make sure everything is ok. Also keep on mind the the tax assesor will reassess the property to include the new area at some point. It is much easier and simpler than it seems and lf it is doable by the city l would go for it.