Thank you all. Sorry for the late reply. I have single family house in Dublin CA, with large backyard. So my goal was to build ADU for extra income as initial research showed some positive cash flow against investment and its separate structure, so its easy to rent out to others. I don't have any plan to sell my property anytime soon. On top of positive cash flow, I was interested to also know if the ADU really adds enough value for ROI of investment when I sell, if at all, down the line in 3-4 years time period. The cost of ADU as I research more is really high due to huge fees like impact fees ranging from $25K to $50K (not known until City verifies all details) plus various other fees like Sewer approval, and various inspection, on top of actual construction cost. It seems the cost could go as much as $400/sq.ft. due to very high City fees.
@Brian Larson. Even in case of re-leveraging the property with additional income, does actual ADU does add any value for you in Downtown SJ? My plan was exactly same, that after building and renting it out, I have more leverage for additional loan for further investment, on top of adding value to my house. Adding extra sq.ft. to main house won't help in getting additional income so I didn't consider that.