Single family home with attached ADU to MFH conversion

[Adrian Lemus]

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? 

[Denise Supplee]

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.