All Forum Posts by: Hai G.

Like you, Lawrence, I live in the Bay Area and started investing out of state six months ago (in Dallas-Fort Worth area). I was nervous initially but once you narrow down a market, get familiar with it, build a team there, and start buying a house or two things aren't that difficult. Feel free to reach out if you'd like to learn more about my newbie OOS experience.  

@Bruce Park

One thing to keep in mind, at least this is true in South San Francisco, is that the building department requires sewer lateral compliance before issuing permit for ADU. They could demand a replacement of the sewer line prior to approving the ADU application which means there may not be a choice of not doing it anyway. Again not sure if your city has similar requirement, but something to check out.

One downside is the ability to do conventional financing for the property which limits the buyer pool. In your example if we assume the zoning is single family but the property is grandfathered in as a duplex, lenders may not be willing to lend against the property. This happened to one of my deals a few years ago where I couldn't find a lender willing to lend against a legal non-conforming triplex (zoned duplex). That was also why the property kept getting under contract but repeatedly fell out of escrow. Not sure if this is a typical situation elsewhere, but is/was true in the Bay Area.

Your option to add kitchen and living room space in a garage conversion would be to do a JADU (junior accessory dwelling unit). Right now city departments are probably shut so you'll need to wait until they reopen to then submit plans, address feedback, and get their sign-off before work (I'm waiting on final approval on my permit in South SF). Will definitely take longer than usual given COVID-19 and the anticipated backlog once it reopens.

Also a relatively flat lot to reduce ADU construction cost

@Kenny Chau

I'm also looking for SFH with potential to add ADU(s) in the Bay Area. What I look for are ease of conversion (you can get a sense of the layout by walking the property), size of lot (surprisingly it doesn't have to be massive if the layout is right), and easements (things like power line, telephone pole, etc where others have the right to use your land). I'm guessing this line of thinking is applicable to SoCal as well.

I'm also very curious about @David Maldonado's question and how they enforce owner occupancy if the owner decides to move and keep the property as a rental. 

@Marinelle Tan as far as whether an existing property can be partitioned into multiple units, feels like that may also depend on how the municipality interprets the language. An attached ADU in the city I'm working with, based on my impression, is a new build with a shared wall to the existing property, and any conversion of existing space is JADU. Seems like every city does it differently.

@Marinelle Tan Did the planning department give you green light specifically on partitioning 1 JADU and 1 ADU units out of the main existing house? As far as I know (fairly certain though not 100%) only JADU is allowed to be converted from existing space, the other attached or detached ADU needs to be new build, at least that's what I heard in the Bay Area. Would love to be corrected if that's not the right understanding.

This depends on the design and layout of the ADU. I've seen drawings from my architect where 2bd can be fit into a sub-500 square feet plan (at the insistence of his client) and was approved, but there was almost no living room to speak of or the bedrooms were tiny to the point of impractical. I'm currently about to submit a 2bd/1ba plan in a 600 square feet space and that seems to work quite well functionally and layout wise. Just a reference.

You would want to verify this claim, but I vaguely remember an architect telling me that adding ADU/square footage to the front of a property is a lot more hassle permitting wise than to the back because the project is subject to public hearing and design review (if I remember correctly, though may be only specific cities in the Bay Area). Which means the cost I'd imagine would be even higher than a typical new structure plop down.

I shared an article in another ADU thread on cost of new build I've gotten (between $250/sq ft to $400/sq ft).

https://infinitesabbatical.com...

The combination of low price point at $230/sq ft, potential complication with front yard addition (you may want to ask your contractor further), and this dual-language contract you received tells me that you may want to proceed with caution. One thing you can do is to check out the contractor's other ADU builds, you can see the quality as well as ask for permit and final approvals of those projects to verify.

Good luck!