@Lucas Martinez - if you look at it purely from an investment standpoint, it is true there are likely better options. But based on what you said, and on a quick glance at your profile, there is clearly a more personal element to this idea. In other words, it sounds like you would get a lot of enjoyment/pride out of the project. I relate to that very much! My wife and I converted a detached unit into an ADU and had a blast doing it. The monetary value it added to our personal residence was not as significant as returns we could have seen investing elsewhere, but they are still great relative to us paying our entire mortgage for our personal residence. Add in the value of the enjoyment and sense of pride we got from doing most of the work ourselves, and it was well worth it! My gut feeling is that appreciation of properties in the SB area with ADUs will equal or exceed SFR. If it does, and if the SB market continues to skyrocket in the long run (also my gut feeling), then we are looking at a really great investment. I say if you are going to have fun doing it, go for it! Also - definitely echo @David A.'s idea. Lock in the 30 yr rate while the getting's good, then HELOC.
