Los Angeles, CA · Member since 2017 · 8 posts · 7 votes
Hi All,
I am wondering if there is anyone in the LA County area who have completed an ADU project and going thru (or have gone thru) a refi or HELOC process. We just built a 1200 detached ADU and are applying for a HELOC. The appraisal came back far lower than what we expected. The comps used are single family dwellings, and our ADU is being considered as a "guest house" and an amenity to the main dwelling. As such, the appraiser is giving it $60/SF. To me this makes no sense. Just the cost of construction is already $150+/SF.
Has anyone had this similar problem? And were you able to substantiate a higher valuation?
ADU appraisals are going to be a pain point for a while, especially for single family lots. I have a appraiser coming out for a refinance appraisal early next week. I'll let you know how it goes and what metrics are used to evaluate the property!
Real Estate Agent · FRESNO, CA · Member since 2016 · 60 posts · 42 votes
6y
@Jin Tan like Matthew said, it is a pain - for now. I have heard some successful appraisals have come about after renting the ADU out for 6-12 months and convincing the appraiser to use the income method instead of the comp method to appraise.
Los Angeles, CA · Member since 2017 · 8 posts · 7 votes
6y
@Matthew Forrest Do you mind sharing some details about your ADU? City/jurisdiction? Attached or detached? Square footage? Hope you can get the valuation that you were expecting. Please chime in once you find out.
@Barbie Steele That's great to hear! I was bummed thinking that most of the equity is locked in for at least a few years until these ADU properties start getting sold. It's good to know that there are options.