Converting grandfathered duplex to SFH to add ADUs

6 Replies

There appear to be a handful of grandfathered duplexes with non-conforming AADUs on the market! I was wondering if people had experience with and/or perspectives on legalizing the 3rd unit by converting the duplex to a SFH (which then would have 2 AADUs)?

Wondering how this might impact:

- Appreciation and buyer desirability 

- Financing (after buying with a 2-4plex interest rate initially)

- Cost to legalize

Example listing: https://www.redfin.com/WA/Seat...

Hi Eugenia! 

It is difficult to resell something that is non-conforming or strange. Additionally in Seattle getting approval for ADU can be arduous and pricy! Personally I'd steer away from something like this, because you are buying it in hopes you can make it more normal and something that has a grandfathered ADU/duplex is probably at an age where the remodel would be expensive. If you would like to discuss more, I love looking at Seattle real estate.

Good luck,

Carmen Dettloff

BigfootEquity.com

@Eugenia K. It totally depends on the size of the ADU and what all you want to remodel. I noticed on the listing you shared that the bathroom had a plug-in strip in the bathroom. So that indicates that the electrical is old and/or there are not enough outlets. So if you have to do electric in a remodel that will add significant cost. Also costs on materials have gone up a fair bit in the past year. A contractor recently told me lumber has gone up 30% because of covid (this seems really high, but maybe this is accurate ???). If you have something specific with floor plans, send to me and I can take a look and give you a rough idea.

I am not looking to buy in Seattle anymore (too many tenant protections and not enough cash flow), but I still like to look in my backyard. 

@Eugenia K. - since this one is zoned SF5000 it would be possible to convert it back to single family with 2 ADUs. Since its an older building, you would likely have the second ADU setup under the "low income housing" requirement, not the "built green" requirement, unless you were doing a significant and studs out remodel.

Like almost every question worth asking, the answer to your question about costs is "it depends". 

My question for you would be: why are you looking to do this conversion? 

In my experience, folks that want fully legal units should buy fully legal units. Folks that are ok with non-conforming or illegal units should buy non-conforming or illegal units. Legalizing an exiting illegal unit can be as cheap as $15,000 and a 12 week wait for permits if most of it is built to code as-is, or as much as $200,000 (as much or more than it would cost to build from scratch) if the work is sub-par and needs to be ripped out.

Great points @Michael Haas ! I heard from the city the option to convert to SFH + 2 ADUs, though was wondering if that approach might have any negative impact on appreciation and/or desirability upon resale. Do you have any thoughts on this? If one is converted under the low income housing requirement, I could see that not being so attractive to other investors/house hackers?

I am considering legalizing in order to buy a 3 unit for less than the cost of a triplex. I would be occupying the non-conforming unit in the interim of making any updates to code. I understand that if I were to rent the unit out while non-conforming, there could be risks to insurance should there be something like a fire. 

@Eugenia K. , you can convert the duplex to a SFH with two ADUs. That said, this something done from the City of Seattle nowadays can take a lot of time. For my last ADU at Seattle, it took me more than 3 months to get the paperwork done and to go through the long waiting list to get an inspector out. These 3 months are before Covid. After Covid, I am expecting that time to go way more than that.

For the cost, it really depends on the condition of the mechanical systems and how much work is needed to conform with the 2 AADUs requirements. Just remember that with ADU, you need separate access, separate heating, ..... and making things compliant with these compliant can vary a lot based on how things are currently wired or set up.

Feel free to reach out if you have any questions about ADU and I can share my experience with the City of Seattle.