All Forum Posts by: Thuan Nguyen

I live in Seattle. And I am a appraiser and lender. In my opinion I have seen people do each. Two ADUs. Can cause issues in underwriting with conventional financing. Also if you have a attached garage that you convert - well now you don't have a garage. Which if most houses in your market area have garages and now you don't have one. Could be looked at as a negative factor. And not help the value of your property.  

From a financing perspective, both for you if you want to refi and when you go to sell the property, a duplex with one ADU is acceptable to Freddie Mac. A single family with two ADU's is NOT acceptable to either Fannie or Freddie making the property that much harder to sell.

Hi Thuan, I actually own a home with a 1/1 450sq ft ADU in tacoma (near manitou park) and rent it out for $1700/month. My agent is investor friendly (I've done 6 transactions with him) and is local to tacoma and may be able to better answer that for you if you'd like me to connect you.

You need to run the comps and see what kind of properties hold their value best in your market. If single family homes have better resale values than duplexes then its likely better to improve that single and add an ADU.

However, adding an ADU is not 1:1 usually. Meaning have 3 ADU's that cost you 300k to build might not increase your value by 300k.

Single family to duplex conversion is incredibly expensive. If you are not fully gutting it, then you are cutting corners. Needs to be redone properly - otherwise I wouldn't consider it. 

If your single family is completely deteriorated and is in need of a full gut anyway, then go for it, but if it is well maintained, has updated cap ex (plumbing, electrical, etc), then I would not bother for conversion. Garages at that point are easier to convert - less demo, and open frame.

Also look into the option of renting out the garage spaces. Maybe the capital to convert is not worth it if garage demand is high.