All Forum Posts by: Chen Zhou
Chen Zhou has started 5 posts and replied 152 times.
Post: Every property in CA should have at least 1 ADU
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Originally posted by @Tony Kim:
Originally posted by @Chen Zhou:
Originally posted by @Dan H.:
Originally posted by @Chen Zhou:
Adus are becoming the standard for new builds in the Bay Area to go beyond standard lot coverage ratio and FAR (adu is exempted for 800 sqft in most cities). At the same time, sb9 and sb10 are signed into law. Multi-units are going to be so common on single family lots (in fact there will be no sfh zoning). The debate around Adu is largely over. Let's move on.
Sb9 requires 3 years occupancy which will eliminate it as an option for non house hackers. Sb10 allows local jurisdictions to enforce stricter zoning which will be the case in most jurisdictions.
For the non house hacker, ADUs may still be the best option.
I suspect there are many house hacking investors that added an ADU that wish they had waited. The split lot would result in 2nd lot being value similar to primary lot and if desired they could add 2 units per lot. SB9 does require commitment to reside in property for 3 years from approval. This will eliminate its use for many investors who do not want to house hack.
Sb 9 says you can build a detached structure first and split lot later, which eliminates all the uncertainty around the valuation of a detached structure on a single family lot.
again, sb9 is a game changer, which makes the debate around Adu irrelevant overnight.
Hi Chen,
Thanks for your contributions in this thread. So what exactly is a split lot? I'm living in an SFR with a 6,500 lot. Does that mean I can split this lot up into two parcels, build another SFR or duplex on the the other lot and now be the owner of two separate properties? Or is that interpretation taking it a bit too far? Thanks!
Under the new law (SB9) going into effect in Jan 2022, your understanding is correct. I'd only add that you don't need to split the lot to build a second detached unit. You can build the unit first and split the lot later (or never split). More details here: https://sites.google.com/view/...
Full text of the bill here: https://leginfo.legislature.ca...
Post: Every property in CA should have at least 1 ADU
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Originally posted by @Ralpheal Doe:
Hello @Chen Zhou
I've been excited about SB9 but it not very clear. Do you think people like us who just completed detached ADU will be able to do a "lot split" and convert ADU to SFH technically? If it's possible then I don't see any reason why valuations won't be the same as the primary dwelling without doing the lot spot as it has potential. If that's the case I just gained almost $1mil in equity from my 750sqft project ha.
@Ralpheal Doe I think very likely you will be able to, since the law allows you to build 800 sqft regardless of local setback rules (4 feet at most, which is the ADU setback requirement) and split the lot later. Details still need to be clarified by the bill author.
Post: Every property in CA should have at least 1 ADU
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Originally posted by @Dan H.:
Originally posted by @Chen Zhou:
Adus are becoming the standard for new builds in the Bay Area to go beyond standard lot coverage ratio and FAR (adu is exempted for 800 sqft in most cities). At the same time, sb9 and sb10 are signed into law. Multi-units are going to be so common on single family lots (in fact there will be no sfh zoning). The debate around Adu is largely over. Let's move on.
Sb9 requires 3 years occupancy which will eliminate it as an option for non house hackers. Sb10 allows local jurisdictions to enforce stricter zoning which will be the case in most jurisdictions.
For the non house hacker, ADUs may still be the best option.
I suspect there are many house hacking investors that added an ADU that wish they had waited. The split lot would result in 2nd lot being value similar to primary lot and if desired they could add 2 units per lot. SB9 does require commitment to reside in property for 3 years from approval. This will eliminate its use for many investors who do not want to house hack.
Sb 9 says you can build a detached structure first and split lot later, which eliminates all the uncertainty around the valuation of a detached structure on a single family lot.
again, sb9 is a game changer, which makes the debate around Adu irrelevant overnight.
Post: ADU Success Story in SF Bay Area $275per sqft Finished
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
@Ralpheal Doe Thank you so much for sharing! Again, the backyard looks stunning! You should be really proud of what you've achieved with this project!!
Post: Every property in CA should have at least 1 ADU
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Adus are becoming the standard for new builds in the Bay Area to go beyond standard lot coverage ratio and FAR (adu is exempted for 800 sqft in most cities). At the same time, sb9 and sb10 are signed into law. Multi-units are going to be so common on single family lots (in fact there will be no sfh zoning). The debate around Adu is largely over. Let's move on.
Post: ADU Success Story in SF Bay Area $275per sqft Finished
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
A few questions as I compare the pictures to your cost breakdown:
1. Where did you get your cabinets? These are beautiful Shakers! The price included countertop? It's amazing price!!
2. Where did you get your doors? They are beautiful and I absolutely love the barn door for the laundry/closet space. Similar style doors at Home Depot takes 8 weeks for delivery nowadays, so I was wondering if you know any place that can deliver these faster.
3. Did your cost breakdown include the furnace, water heater, and AC unit? How about landscaping and solar panels (since solar is required for new builds now)
4. Did you have to do electric upgrade?
THANKS!!
Post: ADU Success Story in SF Bay Area $275per sqft Finished
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Absolutely stunning and full of character. Love the modern farmhouse style!
Post: Detached ADU pros/cons in bay area
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Originally posted by @Deepak Bhosale:
Hi,
I am evaluating whether building a detached ADU (1 bed/1 bath 500 sq ft) on my property is a good idea in bay area (Santa Clara).
Talking to realtor and appraiser, it is clear that detached ADU won't appraise to the same value but will generate rental income.
My concern is, if I spend 200K building 500 sq ft ADU and it appraises to 50K, I will have to spend long time earning income from rent before I break even. (I am assuming $2000 rent out of which about $1500 would be net cash flow after expenses).
I am contemplating whether I should just increase square footage of my existing house to have 3 bd/2 bath from current 2 bd/1 bath. Thoughts?
Maybe doing something in between is the best option. Add an attached family room (with wet bar) plus bedroom and bathroom and separate it somehow.
For example, this one with in-law suite in San Jose is selling for over $3M and the in-law suite is the selling point: https://www.redfin.com/CA/San-...
Post: ADU Property Tax Assessment in Bay Area, California
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
At least in Santa Clara County, only the addition will be reassessed based on estimated construction cost. Your main home and land value won't be reassessed.
For example, in my case, the appraiser estimated my 630 sqft attached ADU cost $148k to build in 2019 in San Jose, and my property tax only increased by ~1% of $148k.
Post: Recent transactions for SFHs with ADUs in the Bay Area
- Rental Property Investor
- Santa Clara, CA
- Posts 160
- Votes 156
Originally posted by @Ralpheal Doe:
Hello @ChenZhou
I just recently completed my own ADU in the upper peninsula. I've noticed in the listings for the properties you listed the ADUs tend to be assigned their "own" Street number address (Main home 123 Main St & ADU 125 Main St). The City we built in is extremely tight with building ADU, new state law is the only thing that really helped, personally I felt like they hated that I was building an ADU and only allowed designation as Unit B.
Do you think this will hurt resale value as it doesn't have street number second address? With your personal experience how did your appraisal go?
I didn't build for resale, rather cash flow but i'm still interested in value add. below is the link to my story.
I don't think the address of the ADU makes much difference at all:)