All Forum Posts by: Sarah Wang

Quote from @Robert Reynolds:

I would recommend doing a mini split! Your tenant will appreciate it for those hot days or cold nights. You may even get by with a window unit if you are really tight on money. It would all depend on where the home is located and the expectation of tenants for that part of the city. 

 Thanks for the advice, Robert! 

Hello friends, I'm planning to build and rent out a 500sft in-law suite, It is attached to the main building and I have existing duct to the rooms. But we usually turn off the AC/heater at night, not sure if it will be a problem for the tenant to share to central AC with us, so I'm thinking about use a mini-split unit for the in-law suit. But we are in Los Angeles county, energy bill is not cheap, should I worry about the tenant use the electricity? what is a good way to keep my energy bill under control and split the bill?  Thanks! 

Hello, BiggerPockets family! Here is my first post: 

I live in a SLR 4B3B in Torrance, California, with a 7500sft lot. To make some cash flow, we want to build a 200sft addition to the main house, use that part and one existing bedroom + bath, to make it a 1B1B 450s ft JADU. After that, we want to build another 1000 sft 2B2B ADU, partially converted from the garage. I heard that if there are more than one ADU in a SLR lot, when selling it, the buyer won't be able to get conventional loan. See Fanni Mae's guidelines below:https://selling-guide.fanniema... 

question is, does my case ( ADU + JADU) also count as more than one ADU?

If that is the case, instead of JADU, should I make the addition + existing bedroom an in-law suite? I can put a counter, sink, a plug-in electrical hotplate cooktop there, so it's not a real kitchen. And I put double doors/communicating door (like the hotel rooms) between the in-law suit and my living space. Will that solve the problem?

or, another question is, after 10yrs, when I sell the property, how much would it impact the price if the buyer can't get a conventional loan? My husband thinks it's not a big deal because there are a lot of cash buyers out there, but I want to make the buyer's pool as big as possible. 

Would like to know your thoughts. Thanks!!

Quote from @Chris Mason:

Quote from @Nicole Collins:

@terriamarsh No, I live downtown, in the historic district. Its a duplex with a detached garage. 

 Hey Nicole,

Hate to be wet blanket, but I'd be remiss not to point this out. Looks like it's about 2 years too late, but better late than never.

If someone ever wants to get a normal mortgage on that property (a future buyer, for example, or perhaps if you ever want to refinance it), and the appraiser calls it a duplex with an ADU, that loan application will be denied.

As of today, and as of 2 years ago when you started this project as well, Fannie/Freddie/etc, will lend on single family homes with an ADU. But not 2-4 unit properties with an ADU, and not on a SFR with multiple ADUs (that's how I know that precisely zero MLOs were involved in the drafting of that landmark California legislation pertaining to ADUs).

That guideline could change in 2 or 5 or 15 years, but that's speculation. In the back of your head, if I were you, I'd be thinking about finishing this up in such a way that it's most cost effective to "de-ADU it" if/when needed (it can be an office or a storage shed or communal rec room, no issues there). If you want to sell for top dollar (in 2 or 5 or 15 years), that means you want the largest buyer-pool possible, which means presenting it to the market in such a condition that a buyer can get a mortgage on it. "Cash deal only" type properties tend not to sell for top dollar.

GL.

Hi Chris,  this is very helpful info! We are planning to build one JADU and one ADU in a SFR (R1) lot, do you know if it is still considered as "multiple ADUs" for Fannie/Freddie?   I was wondering what was their logic, why they don't want to approve loans for property that have more than one ADU. More risk?

Thanks!

If THOW is considered as an ADU, then with your attached ADU, you will have 2 full sized ADUs on your lot, is it allowed? I thought they only allow for one ADU + one JADU.