All Forum Posts by: Brian Larson

@James Carlson - This is a great thread.  Thank you.  I think your position is admirable.

As an agent that dives deep into the niche of ADUs in the Bay Area, I can truly understand your comments.  In fact, you make me want to reconsider my own value to clients.

I regularly spend loads of hours reading online real estate forums and local city rules to keep abreast of the ADU rules. In the past, I have bombarded clients with my un-edited knowledge. I primarily used this knowledge to differentiate myself from competitors. However, in the future, I may decide to hold back more key information until folks sign-on as clients.

@Vic Bui - Sorry for the slow reply.  I think that the project has gone very well overall.  I believe I invested time finding the right partners (i.e. architect and contractor).  The cost has not been entirely unexpected.  My comments have more to do with my personal frame-of-mind adjustment.

When I started this project, I expected to spend $200K-$250K.  At this time, I am projecting the total expenses to be closer to $350k.

Much of the "unplanned" cost is wrapped into the general cost to build my project which, despite Adam's advice, I was not entirely certain on until June 2020; when I hired Zab, my general contractor.  I spoke with 3 other contractors besides Zab but I ultimately went with him because I felt comfortable with his work-product, cost, and communication.

One other thing to note about my project is that we have a HUGE amount of concrete to pour onsite.  There is over 100 feet of new driveway to be poured.  Plus, new sidewalks around the new garage, and a new sidewalk on the side of the existing main house.  These items are partially contributing to the increased cost from my early projections.  I attribute the rest of the cost to my lack of understanding on the general costs to build.

@Ben Howard - Got to this thread late but, as I read through it, I was wondering when a realtor was going to log some serious data into this debate.  The data tells a compelling story.  Thanks.

Anyone out there have a take on ADU consultants and prefab ADU companies? What drives people to use these services in the Bay Area?

If you have some personal experience with a company, I would love to hear who you used, why, and what your general experience was like.

@Michael Frank - Completely agree.  A Buyer should be really cautious of projects for less than $300/SQFT and for flashy advertising. Many new companies have jumped into this new ADU market WITHOUT a lot of expertise.

Additionally, I second the support @Alex B mentioned on the YouTube Channel "Robuilt". I have personally enjoyed Rob's content and feel that he shares a genuine desire to help bring real advice to the ADU World.

@Pavan Sandhu - It's a detached 664 SQFT 1 bedroom ADU above a garage. It was a ground-up build. I am not alone in this experience with San Jose either (and they have some of the most laxed rules in the state). If you wanna see more, check out the Facebook Group "San Jose Accessory Dwelling Unit". Many of my neighbors have had similar experiences with getting their plans approved. Part of this is probably due to the increased demand. To combat this, San Jose has listed a bunch of PRE-APPROVED plans on their website.

Lastly, check out this article about the spike in ADU Projects seen in San Jose. It has been really busy for the Planning Department. https://sanjosespotlight.com/s...

@Ramu Uppalapati - I completely understand the uncertainty.  I decided to do this because it made sense for my situation.  Only you can decide if it works for your situation.  No amount of data will make it any more or less of a risk.  I mostly designed spreadsheets to run scenarios on this construction and potential income.  The biggest issue, as with most projects, was that the entire project cost was much, much higher than I initially anticipated.  I must admit that Adam did a terrific job setting my expectations on the expense of construction in the Bay Area.  But it was still hard to adjust my frame of reference.

Given the large expense, there are some days that I regret this investment for the following reasons:

1)  I am concerned about the long-term outlook of the Bay Area with COVID and it's impact on Tech.  But I think it will come back strong because companies like Google and Apple have too much real estate capital invested here to relocate now.

2)  I think that an OOS real estate investment of this size would have returned lots more cashflow over the past 2 years and some appreciation too.  So from a pure investment standpoint, it might have been a better option.

On the upside, I hit some great timing on the following items:

1) Reduction of local taxes in San Jose to build the ADU. They were reduced by about $5,000 in August/September 2019. (I think Adam might remember the specific timing better than me).

2)  The building rules relaxed for setbacks and roof height in 2019 so we where able to build higher and closer to the property line.  (Yay!)

3)  We submitted plans in 2019 so we were allowed to use gas appliances in our design.

Over 2 years ago, I started out on a quest to explore and build an ADU at my personal home in the Northside Neighborhood of San Jose. In a few more months, this project will finally be completed. Given that this is getting close to completion, I felt it was the right time to share more of my personal story here with the BP Community.

In December of 2018, I engaged @Adam Mayberry as a architect/designer for my project.  He was great!  I highly recommend him.

In January of 2019, I performed a site survey with a small company out of Tracy (unfortunately there are no longer in-business).

Over approximately the next 8 months, Adam and I created a simple but elegant design for a new garage with a 1-bedroom apartment above it.  In this same period, Adam also designed some plans to remodel the primary house.

Toward the end of 2019, we submitted an initial plan to the San Jose Planning office.  This was a long, long process.  We had to respond to questions and resubmit our plans multiple times (keep in mind, we are building a 2-story structure).  It was finally approved on the third submittal in July.  (Yay!)

We hired a great general contractor at the end of June -- @Zab Khan (First Class Construction).  He has been a pleasure to work with.  I highly recommend him too.

In August 2019, we demolished of our current garage and a large tree.  Zab also started the foundation work.

In mid September 2019, we poured the concrete foundation (Bay Area "orange planet" Day -- this photo is not filtered). 

By September/October, framing and rough-ins for electrical, plumbing, and HVAC were completed.

In November, the roof was installed and siding work began.

We ran into inspection delays with the city around the holidays so December was pretty quiet.

In January, we got insulation and Drywall up.  We used spray-in on the ceiling of the apartment.

Currently we are still finishing siding.  Again, the plan is to finish the entire project within the next 2 months. (fingers-crossed)

Overall, I think our family has been really, really happy with the experience.  We hope to rent our 600+ SQFT apartment for about $2100 a month, maybe more.  We also plan to refinance at the end of this period and take advantage for the lower interest rates.

All in all, the goal is to off-set our living expenses as much as possible and roll the savings into another OOS real estate investment in the coming 1-2 years.

FYI - When the entire project is complete, I will share some high-level numbers for the whole project.  In the meantime, let me know if there are any other questions.

@Kat Gord - How is your ADU project progressing? Any issues?

Our biggest ADU issue was gaining approval to build from the San Jose Planning Office. It took us over 9 months of back and forth AND we were using a very knowledgeable local architect. Furthermore, we have a great GC. Our project should be done within the next 60 days.

@Randall Demary - I'm having a hard time understanding what you are doing here.  Is this new construction?  Or are you adding this to an existing structure?  Is the rent $1600 for a studio (JADU)?  That seems a bit high for the the area.

Also, make sure you consider how long you plan to reside in the property.  ADUs generally don't pencil out when you only stay for a few years.

Best of luck.