A Stanford study revealed that over 75% of the ADUs built in San Jose between 2016 and 2020 did not have a permit and are therefore illegal housing units.The lengthy permitting process, high construction costs, and shortage of tradespeople are some of the factors motivating property owners and contractors to take on the risk of building, renting to tenants, and/or housing family & friends in an illegal unit.

When planning the rehab work, make sure you understand the extent of work required for each unit, including material, labor, and permit expenses.

Essentially all of the planning, permitting and projections ready to prepare the project for development and then sell the property with the additional 12 unit entitlement to a more seasoned or experienced developer.

You must also make sure there are no un permitted rooms/ADUs with this style of renting. 

I've heard that Howard county allows building and renting out ADUs, but the permitting and becoming a landlord process can be a pain.Looks like Anne Arundel allows building ADUs and renting out short-term (but not long-term?)

The maximum occupancy permitted in a vacation rental unit is two (2) persons per bedroom larger than 100 square feet, plus one (1) person per bedroom greater than 70 square feet but less than 100 square feet, plus two (2) additional persons, or a total of eight (8) occupants, whichever is less.The homeowner must post the required information on the property.

We would greatly appreciate any advice on promising markets, recommendations for reliable agents and lenders, as well as insights on how to proceed as newcomers to the industry.

And of course those are highly difficult locations in CA for development and building permits..

@Gino Barbaro- Lastly, I was told that if I am going to rent it anything more than 30 days, I can still do it without any permit requirements. 

I’ve spoken to several GC’s that have all said this is doable and safe.I’m sure everyone is going to push the permit side on this forum, but can anyone make a case for not pulling permits?