All Forum Posts by: Chen Zhou
Chen Zhou has started 5 posts and replied 152 times.
Post: ADU vs room addition for SFH in the CA Bay Area
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Depending on the neighborhood and if you want to optimize for rents or for resale.
Without the existing floor plan and knowing more about the neighborhood, it's hard to say.
Post: ADU in Bay Area California - contractor and loan info
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Try to design the floorplan that gives you the max return (both rental and resale). And keep the cost low.
Post: Need $$ For an ADU in CA
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Try Renofi and local credit unions. Typically their rates are better for primary homes adding ADUs and take after construction value and rents into account.
Certain Lending (hard money) is another option.
Post: How to find funding for unconventional renovation to add units to my mixed use home
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Try Renofi - they take after construction value in LTV calculation and takes into account future rents. I believe you don't have to refi your primary mortgage.
Post: Financing an ADU Without Using Home Equity
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Try Certain Lending and Renofi. Some local credit unions might offer ADU-related loans that take into account future rents.
Post: When does it make sense to add an ADU?
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Depending on the neighborhood - if converting the garage into ADU would negatively impact the resell value and by how much.
Post: Rental property with both attached ADU and detached ADU
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Consider turning 1 or 2 of them into short-term/mid-term rental. With the higher rates that you get from short-term/mid-term rental, you can afford to hire a PM to manage them and get completely passive income.
Post: California ADU business
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Quote from @David Maldonado:
ADU Appraisal:
Hey everyone it has been a while. I'm currently getting ready for my 5th ADU build and I want to share some news:
A similar house in my neighborhood with both an ADU and a JADU sold for $1.15 million, after only being listed for a few days. Properties around my neighborhood are worth around $550,000. I was able to get a copy of the appraisal report and the comps that were used were mulit-familys (tri-plex). As of today, that house was the first and remains the only property with both an ADU and a JADU in my area.
Question:
If I were to apply for a HELOC, would that $1.15 million dollar property be the only objective comp that can be used to determine my property's value? I'd be able to quit my job and do this full-time if this can work!
Would love to know how your appraisal went.
Post: Attached Garage ADU vs Deattatched ADU (Both 1bd1br)
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
You can only legally do one ADU and one JADU on the lot according to the latest ADU law. If the garage is attached (as shown in the picture), you can see if you can convert the garage into a JADU (not an attached ADU), so that you can build a detached ADU down the road. Otherwise if the garage conversion is counted as an attached ADU, you will no longer be able to build another ADU on the lot.
Good luck!
Post: My second ADU project in the Bay Area (why and how?)
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Quote from @Sara Pasha:
Thanks for your thoughts. I dont have a very wide lot, but splitting my lot would give a slightly narrow ~4k sq ft lot. There are a ton of 4k lots in my city and they price well. Only concern is this will be narrow long lot.
I have to research more about the extra costs and time for SB9. The main reason for thinking about lot split is ADUs are not assessed very well yet. In a few years it might become a lot more common and might be assessed to the right value, but unfortunately, we are not there yet.
In your ADU, did you separate the utilities?
Keep me posted on your effort and good luck! In my city (Santa Clara), the application cost of Sb9 is at least $50k+, not including all the additional cost of land survey, public work, adding separate water and gas meters, etc. I think it could be easily $100k-$150k more. And since the reduced lot also reduce the value of the main lot (by $200k-400k), I figured that it was not worth it for me. However, I think for bigger lots and in more expensive zipcodes, Sb9 would make a lot more sense.
I have a separate electric meter (required by the city), but not separate gas/water meter.