All Forum Posts by: Ronak Patel

Hi All -

Anyone have experience creating an LLC for building and managing a new ADU construction? Did you find it beneficial vs not creating the LLC or any type of pass through entity?

Listed some of the tax benefits you can receive while building an ADU and once the ADU is built from my research. Happy to learn if there are other tax benefits.

Tax Benefits While Building

- Create an LLC and pay start up costs through the LLC (architect fees, permit fees, etc.). You can also deduct the cost of creating the LLC. Up to $5K (Source: https://www.adugeeks.com/post/...) 

Tax Benefits Once Built

- Deduct depreciation and cost of maintaining the property 

- Deduct mortgage interest if a loan is taken out

@Brandon Hutslar Good to know, thank you.

Anyone have experience working directly with Champion Home Builders to get a pre-fab ADU?

@Michael Frank On your last point, I've had the experience where the local city ADU limit of 1,000 SF took precedence over the CA state law of 1,200 SF. They will not allow me to build over 1,000 SF even though the state allows it.

Thank you @Amanda Rothstein and @Brandon Hutslar

The trouble with some of the prefab options, especially the higher ends on is that they don't look like the original home. My city requires the ADU to look similar in style to the main home and I'm not sure how strict they are on this.

I saw that Champion Home Builders operates in LA and they have a lot of pre-fab options. Anyone have experience working with them for an ADU?

https://www.championhomes.com/...

@Namit Raisurana Curious to know as well how the project is going.

Also, does anyone have recommendations for pre-fab ADUs in the LA area that are 1,000 - 1,200 SF? I have sufficient space in the side yard and most of the pre-fab detached ADU options I've seen so far cap out at around 850 SF

There are many homes and apartments that border major freeways (101, 680, etc.) and eventually folks just get used to the sound. It may deter some people from renting the ADU, but is much less of a cause for concern since they can always just find another rental after the lease is over vs someone buying a home that they may be stuck with.

Adding noice canceling windows can also help reduce the sound. And if you have the space and option to, you can plant ficus trees or any plants to help create a natural wall from the freeway. 

@Matthew Forrest currently in the design/architecture phase! Hope to start building sometime this summer. Given interest rates are low, will be doing a cash out refi on the main home to fund the cost of the ADU, which I suspect will cost ~$200KK for a 2 bed 2 bath.

I'm building a detached ADU on flat land in SoCal right next to the main home. The city allows a max of 1,000 sq ft if the ADU has at least 2 bedrooms.

The city also requires a soil report for all new constructions except if it is less than 1,000 sq ft. So at this point does it make sense to just fill the waiver out and build an ADU that is 999 sq ft? This will save me at least $4K in soil report costs.

"A soils report is required on all new construction. Exceptions could be found on Requirements for Foundation and Soil Investigation Report Form (i.e. for single family residential on a flat land with less than 1000 s.f. of new construction, you may follow the local requirements without submitting a soils report)."

Decided to go with detached ADU option since I need at least 6,000 to build a separate home. If I were to subdivide the lot, I'd only have around 4,000 sq ft

I was looking into the zoning map and it looks like the minimum lot area per dwelling unit needs to be Six thousand (6,000) square feet in the zone I am located in. This may be a deal breaker for a separate home. The entire land area for the 2 lots is only 10K sq ft.

Thanks Chen and Matthew! Any experience with subdividing land and what I should be on the look out for?

Anyone see merit in just going with the ADU? It would be less time intensive and cost a little less, but the upside to the separate home is far greater in my view.

@Matthew If only there was enough room for the ADUs as well :)