Single family home with attached ADU to MFH conversion

Spokane, Washington
House Hacking
1yFollow

Single family home with attached ADU to MFH conversion

Adrian Lemus
Member since 2025 · 1 post · 1 vote

I'm looking at a property in the 99216 area to take on as a house hacking first property. It's currently a single family home that was used as a primary residence in the upper level. The lower level was rented out as a STR. There's also a detached 390 sqft ADU micro-studio which is currently already being rented out.

I'm trying to figure out if this property is something to even bother pursuing as a forced-appreciation play. I've gotten familiar with the rules around having this property recognized as a duplex and it seems to meet everything except separated utilities. The other issue is top-bottom floor noise insulation & possibly fire-proofing. The ADU is already in livable condition and has washer/dryer, shower, but no official kitchen. It also has it's own sub-panel but it is not officially recognized as a separate unit either. 

Has anybody else ever taken on a project like this? If so, did it eventually pencil out?
Is this a monstrous project for a beginner like myself to even bother considering? 

1Reply
80 views

Most Popular Reply

Denise SuppleeBusiness Member
Realtor · Willow Grove, PA · Member since 2017 · 991 posts · 647 votes
1y

Hi @Adrian Lemus nice to meet you! If the property already functions as a triplex in practice, that’s a good starting point, but turning it into a legal duplex or triplex for forced appreciation will likely require time, money, and working closely with the city. Noise and fireproofing upgrades, plus utility separation, could be expensive and time consuming.

That said, if the cash flow works today with the current setup and you’re patient with the long-term upside, it could still be a solid move. Just don’t bank on forced appreciation too heavily unless you're ready for a permitting grind. For a first project, it’s not impossible...but it’s definitely not “easy.” Talk to a local contractor and planning department before diving in.

Spark Rental Co-Investing Club582 Reviews
WebsiteView Page
1Reply
See this reply in the discussion

4 Replies

Jump to latestLatest
  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 991 posts · 647 votes
    1y

    Hi @Adrian Lemus nice to meet you! If the property already functions as a triplex in practice, that’s a good starting point, but turning it into a legal duplex or triplex for forced appreciation will likely require time, money, and working closely with the city. Noise and fireproofing upgrades, plus utility separation, could be expensive and time consuming.

    That said, if the cash flow works today with the current setup and you’re patient with the long-term upside, it could still be a solid move. Just don’t bank on forced appreciation too heavily unless you're ready for a permitting grind. For a first project, it’s not impossible...but it’s definitely not “easy.” Talk to a local contractor and planning department before diving in.

    Spark Rental Co-Investing Club582 Reviews
    WebsiteView Page
    1Reply
  • Ryan SpathBusiness Member
    Real Estate Agent · Boise, ID · Member since 2017 · 571 posts · 378 votes
    1y

    Great question and honestly, I love that you’re looking at this through the lens of both house hacking and forced appreciation potential.

    Nothing is too big for anyone if you know what you’re doing (or surround yourself with people who do). Properties like this can be incredible opportunities if you take the time to understand zoning, permitting, and the path to making those separate units legal and functional.

    That said, it’s important to go in with clear eyes on scope and cost. Soundproofing, fire separation, and utility splits can add up quickly but if the bones and layout already work, it might just need strategic upgrades and proper documentation to create real value.

    If you decide to move forward, connect with a local investor-friendly agent, contractor, and even the local planning department early on. They’ll help you clarify what’s actually required versus what’s just “nice to have.” Also, if you write an offer, have your agent request a longer "inspection period" so you can perform more due diligence and make sure you can accomplish what you are wanting to. 

    Projects like this are how many investors go from beginner to experienced quickly just make sure you’re buying right and have a plan for each phase.

    [email protected]208-600-2814
    0Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    11mo

    @Adrian Lemus 

    If this is your first house hack it’s an ambitious but potentially rewarding opportunity. Since it combines personal and rental use, your main tax benefit comes from how well you allocate and document expenses for each area.

    Without separate utilities, you'll need to prorate costs like insurance, taxes, and maintenance between personal and rental use. Upgrades such as soundproofing or adding a kitchen to the ADU are capital improvements added to your property's basis and depreciated over time but can be written off 100% under QIP rules for STRs.

    If the property becomes a legal duplex or triplex, your depreciation basis and deductions increase, but you’ll face partial recapture tax at sale and can only claim the home sale exclusion on the part you live in.

    Overall the property offers solid long-term tax potential but requires careful planning and accounting. For a beginner, a simpler legal duplex might (STR) be easier to manage while still providing strong tax advantages.

    This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.

    [email protected]941-914-7779
    INVESTOR FRIENDLY CPA®5240 Reviews
    WebsiteView Page
    TaxMD® | Tax Planning Software
    WebsiteView Page
    0Reply
  • Matt F.
    Rental Property Investor · St. Louis, MO · Member since 2019 · 162 posts · 72 votes
    11mo
    Keep it simple on the first one.
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free