All Forum Posts by: David A.

GC contract amount for hard costs for build: 126k or $157 per square foot

This was an all-in price, down to the kitchen drawer pulls but did not include the required solar system as this will be done by a separate party or any landscaping. 

This is for new rental grade / tract home level finishes with a few minor upgrades. All materials are local, "off the shelf" and with no items being special ordered. Single paint color throughout, textured drywall and stucco, mid tier vinyl plank flooring everywhere except bathrooms which are standard tile, pre-painted shaker cabinets with plywood boxes and quartz counter tops. Plumbing fixtures are Moen / Delta and fiberglass tub / shower base and surrounds. Recessed lighting, brand name mini-split system with 4 zones and tanked water heater

Only upgrades are vaulted ceiling in common area, solid core doors, Decora light switches with dimmers, 50 gal water heater (vs. 40 gal) and lighting in closets.

This price was locked in at peak lumber prices and the majority of lumber was ordered on day one to protect from further increases and supply issues. 

Going a little out of order but the soft costs before breaking ground: 18k 

Here was the cost break out and order these came up in. Not included are the solar plan and permit fees, any lot maintenance while it was vacant or existing hardscape (fences, gates). 

I wanted to share my experience planning, permitting and now building a 3 bed / 2 bath 800 square foot detached accessory dwelling unit (ADU) / back house / laneway house at one of my single family rental properties. This project is in Los Angeles county but was built using the state wide ADU standards so you could do the same in any city in California. ADUs are an exciting topic but the end-to-end process can be vague, complicated and full of surprises at times. Feel free to follow along, I plan to touch on the points below but let me know if there's anything else you want to know about.

• Existing property / lot and working with existing tenants 
• California-wide magic ADU requirements
• Site plan, floor plan and fitting it all in
• Planning and permitting office
• Surveyors, designers / architects, engineers, and T24 energy calculations 
• Am I required to have solar panels?
• Soft costs, city and impact fees before you can even break ground
• Contractors and bids, draws
• Build timelines, progress and hang ups
• End result and how to come check it out in person 

Expectation:

 Current reality (as of 7/16/17):

Realistically, nothing. Here is what my local city states “The property owner shall record a deed restriction indicating that owner occupancy is required at all times.” This would limit your pool of buyers if you ever sold since you couldn’t sell it to another investor. Enforcement will just depend on your city. 

My interpretation is that the JADU must be in the existing, permitted square footage of the main dwelling. Approved plans will tell for sure, but this is all up to your local governing body's interpretation. 

I'm building a 1000 sq ft 3 bed 2 bath detached ADU and my strategy on this is to design with the possibility to split this into 2 units 1/1 units (by replacing a bedroom with a kitchen) or a 2/1 + studio (by adding a kichenette to the master). My plans are most symetrical so I can split the ADU in half with each side getting a bathroom. I'm also having french doors to each of the bedrooms for separate access to the outside and making sure my plumbing is close by if I need to add another kitchen or kitchenette.

Another thing to check if you can get freddie / fannie lending on a property with 2 accesory dwelling units. Would hate to do that work and not be able to refi or sell using standard loans.

Keep in mind that you will be most likely paying back tax free money with after tax money and then paying taxes on it again once you eventually draw from that account in retirement. It will also be a plus to have your investments diversified across stocks vs. real estate.