Adding ADU or addition to increase appraisal value.

[Cole Minnis]

Hello, I’m new to this community. I am from the Bay Area, living in San Jose. I have quit my job and jumped right into other avenues of income. September of last year I came across an amazing opportunity to flip a house in Fremont. I bought the house and am about 3/4’s done with rehab. The market here in the bay is absolutely insane. I’m in a rush to get this thing listed. 

With the end of this project in sight I’ve been looking to find another opportunity. With the inventory so low and the fact that I’m not well known yet or having years of experience, I assume traditional avenues of finding deals would be difficult at this time. 

This brings me to my question and hopefully you guys have some input or alternative solutions. 

Is it a good idea or is it a popular idea to buy a home at market value and make big changes to the home to increase the overall appraisal value? Like buying not necessarily a fixer (because everyone and their brother is looking for fixers) but a decent home that could be transformed to increase appraisal. 

Think of increasing square footage, adding ADU, maybe a pool or indoor/outdoor living. I'm constantly thinking about opportunities and maybe this is already a topic but I haven't been able to find much on this subject with my searches.