All Forum Posts by: Chen Zhou

hi @Chen Zhou, thank you for your posts regarding both your ADUs and willingness to help others in the process. I really liked the way you shared the costs for your 1st ADU project. It would be great if you can share similar one for this ADU if you have it handy. I am also really interested in your thoughts on SB9 lot splits.

I had been starting and stopping my plans for an ADU (as my property had some easement issues). I think I am finally ready to build. But now I am debating whether to build an ADU or do a lot split and built another smaller primary dwelling.

Hi Sara, the all-in cost for this one was $430k. Contractor $300k, finishing materials $60k, solar $10k, public work $10k, soft cost $20k, landscaping and other miscellaneous $30k.

Whether to do SB9 or just ADU really depends on your lot (is it a corner lot? is it big/wide enough for you to divide into two or you have to do a flag lot?). You should also take into account that SB9 would be a lot more costly to do and takes longer. In addition, houses on smaller lot are not valued as much as same houses on a bigger lot, since most of the value of properties in California is in the land.

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SB-897 and AB-2221 are already being implemented at local municipalities.

Sunnyvale for example changed their height limits for attached ADU to up to 25 feet. They also changed height limit of detached ADU with half mile radius of major transit stop to "18 ft plus an additional 2 ft is allowed to accommodate a roof pitch that is aligned with the roof pitch of the primary dwelling unit".

I'm sure other cities will follow suit very soon. Good news for everyone who wants to build 2nd story ADUs:)

Here's the link: https://www.sunnyvale.ca.gov/h...

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San Jose, California

I'd argue there's no better time to build than in a recession. Contractors are aggressively looking for work now as the demand dries up. Material prices are also dropping quite dramatically (lumber, cabinets, flooring, tiles, etc.). A few months ago, no contractor is willing to go below $300/sqft in the bay area, now you can probably find plenty.

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San Jose, California

Quote from @Atanas Petrov:

Quote from @Chen Zhou:

Originally posted by @David T.:

@Chen Zhou Congrats! thanks for sharing! I see that you took out a home equity loan to finance this second ADU. Curious to hear why you didn't go with a cash out refinance route instead? Was the rate a lot lower with a home equity loan vs cash out refi?

Actually cash out refi was my preference, but looks like very very few banks offer that during the pandemic, and even if they do offer, the total amount is typically capped at $1M, and the rates are not that good. My first mortgage's interest rate is very good:)

Luckily I found Figure.com, who offers pretty good rates for a 30-year fixed home equity loan, which I thought is almost the equivalent of cash out refi, if not better. Plus the whole process was very hassle free and only took 5 business days. Didn't have to do appraisal (Figure does digital appraisal and gave me generous valuation) and didn't have to send them all the documents as I just needed to digitally link my bank accounts to their website for them to do cash flow analysis before they can approve the loan.

Ultimately I thought in a few years when the property appreciates further, I will do cash out refi anyway to maintain my leverage, and at that time I can pay off both loans, so I didn't care too much about 1 loan vs. 2 loans at the moment.

Hey Chen, I'm currently finishing a 1200 sq ft ADU in Los Angeles in 2 months, and will be using a HELOC to fund another ADU project when the plans get approved in the next 4 months on another home I already own. My question to you is how does Figure.com evaluate the ADU. Do you have to provide them with any information related to the newly build ADU, you said no appraisal no documents, but they still need to know some details about the size of the ADU weather or not the house and the ADU are rented, may be leases I imagine? if you could elaborate, it will be very helpful. Thank you for the great post btw

When Figure did the virtual appraisal for me (completely driven by publicly available data, no human involved), they simply just added the ADU sqft to the main house's and gave me a number within minutes of application. Hope it helps.

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Thank you! It's accessed from the backyard fence and has its own address and mailbox and delivery spot for packages.

Originally posted by @Gabe T.:

@Chen Zhou

Wow that looks amazing Chen! That should rent nicely in the Bay Area.

When it comes to ADUs I'm always interested to know how the unit is accessed and separated from the primary unit. I think that really impacts the appeal of the ADU. I can't really tell from the photos.

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Finally settled into the ADU after 6 months of hard work! Here are some pictures (we still haven't gotten to wall art/decors, etc.)

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ADU exterior

ADU kitchen

ADU living room

ADU side yard

ADU bathroom

ADU dining room

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Originally posted by @Justin F.:

May I ask what your impact fees were? Castro Valley Sanitation (East Bay) said sewer capacity fees will be $13.5K for building a detached 2bd/2ba ADU! Is that comparable to other cities or is that exorbitantly high. They charge $715 per PFU (Plumbing Fixture Units) and mine came out to 19 PFUs (bathrooms,sinks, kitchen, washer, etc...). Unfortunately, there's no way around this since it's a city fee.

My impact fee was $4,567 and school fee was $4,892. Hope this helps.

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Hi guys, just wanted to give everyone an update on the project - we broke ground in mid-July and now we're almost done with drywalls and moving onto interior finishes. Hopefully majority of the work will be done by Thanksgiving. Will share the finishes once it's done!

Some project-related pictures from the last few months: