All Forum Posts by: Brian Bakerman

Appreciate all the follow-up on this! Definitely hear everyone. To answer a few questions some people had:

Our Permitting + Project Record

Currently permitting/building in 6 different jurisdictions (1 install in October, 1 in Jan, and 1-2 a month from there)
First install was 4 months and 4 days from contract sign to drop down, other projects shaping up similarly

ADU Market Value, Cash Flow, Opportunity Cost

ADUs do add significant value to a property. 1000adu.com is doing some cool work on proving this with appraisals they get on their ADU projects (completely unaffiliated from us!) Appraisers are starting to get great background on ADUs from lenders who want to jump into the ADU space. It makes no sense for a unit that can cashflow tens of thousands a year to appraise for 20-50k!
The cap rate on adding ADUs can be really incredible, too -- looking like 7-12% in the right markets
Prefab is unlocking the potential for these projects to have significantly less executional risk than a traditional construction project.

All-in-all, there is certainly a ways to go for ADUs to be more mainstream, but all the problems that currently exist seem surmountable.

Thanks for the replies everyone! Prefab these days seems to be as fast as 2-4 weeks in the backyard for final install and 4-6 months for the process all-in from our experience. From my perspective, this kind of timeline should unlock property investors. If this isn't quick enough, what kind of timeline would be of interest to property investors?

Adding an ADU to a property has become super easy in CA, yet it seems that the adoption rate of adding units isn't quite where it could be.

This is most surprising amongst investment property owners. Why is that? The math makes a TON of sense, units can be installed in as little as 2-4 weeks to coincide with tenant turnovers, home equity seems to be at an all-time high -- what's missing in the equation?

Thanks for all the replies everyone! We've generally been curious why the bulk of the interest for ADUs isn't from investment property owners looking to improve yields (and maybe even taking their homes to cashflow positive) -- I think these replies help explain some of that, although the investment potential is fairly undeniable, especially with turnkey solutions like ours out there.

Hi all -- I'm trying to understand why more people haven't built ADUs on their investment properties. The rough math says they could themselves be up to an 8%+ yield.