All Forum Posts by: Jesse Aizenstat

Julie, I ran into a similar issue in Santa Barbara. I actually started a software to handle sewer lateral inspection programs to basically handle stuff like this. It starts with getting a plumber to find/map the lines, then figure out what the municipal code is (do they mandate fixing, etc). You'll be fine with the shared line if it's working correctly. But that being said, start with knowing the condition and a jetting can go a long way. (Google goforwardlateral.com and get the plumber to give you a report. Email me. I'll make it free.) Kevin Pillars to Posts does good ones in WA. 

We're building an ADU from the ground up. I thought the contractor should have "workers compensation" for him and everyone he brings to the job site. But I learned that my homeowners insurance has a 500k workers compensation policy (Safeco). When I described my situation to the agent, we boosted my secondary unit coverage (from a garage 34k, to a unit 300k) and that was about it.

If were to become "Additionally Insured" under the contractors general liability insurance, with my workers compensation, would that seem like sufficient coverage?

Any recommendations here?

Thanks everyone in advance! What makes these ADU's interesting is that they seem to walk the line between residential lending, permitting of utilities, fees, but also have a commercial element as they are built as rentals. Our ADU is a 874 SF unit in our backyard. It's a 2/2.

Hi everyone, I'm curious to get a sense of the landscape across the United States on sewer lateral inspections. In coastal California, cities seem to be responding to lawsuits, enforcing home and business sewer lateral inspections, either upon sale or by driving around mainlines sewer pipes and looking up the Y connector.

I'm curious if this is just a "coastal California phenomenon," something that is more enforced around water sources (ocean, lakes, rivers). Perhaps this is something that is now starting across the United States due to older laterals on properties.

Looking forward to hearing your stories--from wherever you are. Love BiggerPockets!

"If you will it, it is no dream" Theodor Herzl

Going to need power to run the cameras. But H2O is big. If there was a leak, it could take a long time to figure out and cause a lot of damage. 

Got it, thanks!

The drive is an hour and a half... but it's in high traffic areas and it always feels like a one-day commitment to go down and visit. Good call on the washing machine

It is with some emotional sorrow that I report that my 96 year old grandmother just can't live in her house anymore with her caregivers. She's had a good life and it will continue at a retirement facility, a few minutes from my house. However, one of my grandmas wishes is that her house remain vacant while she is still alive. She bought the thing for $50,000 fifty years ago and she just wants to keep it. Emotional? Sure. But before any of us pass judgement as investors let us just remember that we haven't been tested the same way she has been at that stage of life. Let her watch her home remotely on my iPhone via cameras or even go and visit on occasion, I say. Give an old women her dignity and respect her wishes. Right? It's her house.

So what do I need to do to keep the house going without regular use?

It's a typical "grandma house" that could use a little TLC, but overall it's fine. We want to avoid potential damages of non-use: frozen pipes, HVAC getting funky, etc. The following are what I'm considering doing on a bi-monthly basis when I drive down to check up on the property. I"m very curious to hear the opinions of others. The property is in Los Angeles, so no snow. We'll keep the property in the family and use it as a rental, with capital improvements along the way. (Hopefully my boy gets a basketball scholarship at UCLA and lives there one day or something.)

Bi-Monthly Maintenance Checklist

1. - Install Amcrest Cameras (anyone have a better brand they like?)
2. - Drain pool, cover pool
3. - Run HVAC for 10 minutes, AC/Heat
4. - Leave refrigerator slightly open
5. - Run all water fixtures and flush toilets a few times
6. - Drain and turn off water heater 
7. - Have gardener specifically look for rodents intrusion

Any and all ideas on additional long-term storage welcome. Thank you.

Thank you @Mathew Wray for your response (and thank you everyone who has commented here). What a wealth of information. You know, I actually tried to get appraisers to come out previously, but all claimed to be "too busy" last time I checked. I just found someone in town who will be coming out this Friday. I'm going to present them with the facts, plans, but not "lead the witness" as they say. The value here is in letting him judge for himself and build his argument for price. Ultimately it will be his kin that presents to the bank. Not me. 

There's also another detail that is largely overlooked in the appraising ADU's debate. There's a difference between a 4m house with a guesthouse that's built under the ADU law, and a small house in the multifamily zone that has an ADU that's about the same size, with the same amount of bedrooms and bathrooms. The 4m house is obviously not a typical rental and would be priced based on luxury comps. The small house with an ADU in the multifamily zone really is a rental, so an income approach is not just justified, it's completely designed around the idea of being an income property. So asking "how should an ADU be valued" might need a little more distinction before judgment.

Another big component for me would be the owner-occupancy covenant with the City (as we have here in Santa Barbara). ADU's must be rented along with the house to the same person if the owner is not living at the residence. As an investor, this kills the "rental" idea of the ADU, and would cause me, if I were an appraiser, to look for comps on the ADU, perhaps mixed with some elements of an income approach. If this same house with an ADU was existing in the multi-family zone, it could be owned by whomever, rented like a duplex, and thus valued like a duplex.

These two points really must be added to the ADU appraisal question. But it all seems pretty straight forward and will be interesting to see how the future of banks/appraisals shake out.

I live in a really expensive market, in Santa Barbara, CA. Buying a small 2/1 home starts at around 800k. Taking advantage of California's new ADU law, I decided to buy one of these small homes and permit an ADU. (A value-added play that I can control makes the most sense to me in this high market.)

My main house is 930 SF 2/1, and the ADU I want to build would be a 800 SF, 2/2. I estimated that this ADU would cost me $200k all in to build and generate $3,000 per month. That would be pretty good, considering how saturated multi-family is here in Santa Barbara. Most multi-family scores around a ".50" here: monthly rent / price * 100. Example: ($6,000 / $1.2M)100 = .50. These are the projected numbers on my deal and a ".50" is a typical score for multi-family here.

So, to mine the wisdom of the BP forum, what do you think this property would be worth when the ADU is completed? Can it be treated just like any other multi-family in my neighberhood, with an income-based approach?

I've read on another post that someone built a 2/2 in Portland that cost him 300k and the appraiser only added $75k worth of value. That seems crazy to me. But perhaps I'm just looking too hard at cash-flow and ROI. Since my property is in the multi-family zone, it does not need to be owner-occupied, so it really could be treated as a duplex to some investor if I decided to sell it. But I don't want to sell it. I want to eventually do a cash-out REFI, so what an appraiser thinks would be critical here.

Looking forward to hearing your thoughts in the comments section. Thank you.

PS: Best Reads I've found on the internet thus far: 

• - https://accessorydwellings.files.wordpress.com/201...
• - http://www.buildinganadu.com/adu-blog/adus-from-an...