All Forum Posts by: Paul Dario Jr

I hired an architect who has designed ADU's in the past. Working out good so far. However, next time I do this I'm going to go with one of the preapproved designs on my municipalities website. I heard that this makes the permit approval process so much faster and the plans can be purchased for so much cheaper.

Thanks @Ray Martinez. 

@Brian Larson, I never asked you how the refi went after you constructed and rented your ADU. I'm specifically wondering how the appraiser valued your ADU. I've heard from others that ADU's were not appraising well. And sometimes appraisers giving value well under what even the cost to build was. Any thoughts? What was your experience with that? Thanks so much!

Hey Nash. I didn't use a generic plan to design my ADU. I actually hired an architect to draft the plans.

But what I did discover is that some cities, including Los Angeles Dept. of Building and Safety, has pre-approved plans on their websites. I'll probably use one of these pre-approved plans next time because what I'm told is that these pre-approved plans can cut down on the amount of time it takes to get permits approved by the city. This can be helpful in cities like Los Angeles where I'm told it can take as many as 4-6 months to get permits approved. 

Here's the website showing pre-approved plans in Los Angeles: https://www.ladbs.org/adu/stan...

Perhaps there's an equivalent in your city?

Good luck!

Thanks for the additional input @Michael King.

Same here. Just got a $135k HELOC to build a $90k 600sq/ft ADU in my backyard in San Fernando Valley.

My two concerns:

1. Rising prime rate cutting into my projected monthly cash flow. 

2. How will I be able to recycle the HELOC without refinancing my primary home.

Thanks for sharing your thoughts @Areeb Naseer

Hey @Brian Larson. Thanks for the input. Glad to hear your happy with the project. I plan to hold on to the property long term as well. And for now, we'll still be living in the primary until I can work out financing for the next house. 

I was also thinking of refinancing out of the HELOC after I rented the ADU. My dilemma is that we have such a good interest rate on the primary home.

Hey @Ray Martinez. I'm curious if you ever decided to push forward with the ADU a couple years back. If so, how did it end up? Thanks.

@Michael King, so are you not concerned about the points Dan Heuschele made above regarding 1. Lack of leverage and 2. the risk of a variable rate HELOC?

I have been a bit concerned about the HELOC being variable in the midst of rising interest rates.

I'm also wondering if using a HELOC to pay for the ADU will keep the HELOC funds tied up in the ADU and hinder me from purchasing other investments in the near future.

Thanks for the input @Brian Blosser.

@Matthew Crivelli, what would be a good strategy for early payoff of the HELOC if I don't want to touch my primary home mortgage? I have a good rate on the primary home's mortgage that I'd rather not mess with. Thanks.