HOUZD to ADU by HPP Cares

Building your dream ADU can be an exciting time when you're trying to imagine what it will look like. There may be a great deal of variation between what inspires you and what the city, county ordinances say. Are architects and designers the same or are there differences between the two. Is there a way I can find out more about their expertise? It is possible to build an ADU and a Jr ADU on a multifamily residential lot. Not to mention what steps must be taken to complete the process. It all seems rather daunting.

Helpful Hint: You are invited to register for our educational leader-led webinar or self-paced online course on HOUZD to ADU by HPP Cares Design Finance Construct Lease Protect. The pre-course guidebook will help you understand how the regulations and laws protect ADUs, in addition to the educational option. During the design process, there are many steps, materials, and options available for you to capture your vision from interior, exterior to completion. You will leave with few questions than answers.

We understand how stressful and intimidating the construction phase of any project can be, from vetting contractors to negotiating bids and contracts. Is the contractor responsible for the permitting process? Is it worth considering being the project manager? What are the steps I need to take to verify that the contractor is licensed, insured, and bonded? These questions should not be seen as obstacles to the project, but as a learning curve to gather the required information.

In relation to your ADU project, you should start with the local building and safety office. It is imperative to ask the right questions once you are there. Don't forget to visit the water and power office as well as the tax assessor's office when you visit the building and safety office. Now you're probably wondering why I hired the contractor in the first place. The contractor was hired to do the work. However, it's also your responsibility to make sure you understand the rules of engagement. Plus, who wouldn't want some sort of assurance from the city or county in which you are completing your project that things are as the contractor says.

Helpful Hint: Always ask two or three builders to bid on your ADU project, all based on the same set of plans and specifications. It is important to specify whether you want inexpensive construction, luxury details or something in between. If you already have a good idea of what you want to build, you may consider hiring a “design/build” contractor who can both design and build the second unit. Always check a builder’s license status to make sure they are in good standing with the state. Put everything you agree to in writing and make sure you understand the contract before signing. From phase to payment to change orders.

Property owners have several options for financing their ADUs. The following options are often used in combination by owners. Interest rates have increased, and many consumers have opted for second mortgages, credit cards, saving, and 401ks. Be sure to factor in the rental income you'll receive when planning your second unit's finances. It's important to include this income in your calculations when evaluating you for a loan, even though some lenders won't consider it. Visit Lehvl for all available ADU grants and subsidies currently available.

Considering CALHFA ADU 40K Grant Program Approved Lender List

A helpful hint is to consider all options available to you before moving forward. Once you have exhausted immediate options like personal savings and credit cards. To make sure you are not missing out on local funding options, consult your city and county in addition to state grant programs. From there, investigate the lenders from the programs (have a conversation initially, be prepared to answer questions pertaining to your project, and then weigh your options).

Considerations upon completion of your ADU. Now that you have become a landlord overnight. It’s imperative to understand not only Landlord Tenants Right and Responsibilities but the business of property management of you ADU. Up first is how do I find the right tenant? Will I be project managing the ADU for the 1st year or shall I consult a property management firm. Do I require tenants to have renters’ insurance is that even legal? These are matters that you need to have a plan for to ensure fair treatment of all tenants.

Helpful Hint is to create a policy and procedure manual if you are not going to work with a property management company. Be sure to draft out the lay of the land with how you handles tenant selection, emergencies, rules etc. you may want to consult a property management company 1st and then a real estate attorney to ensure you are comply with the law.

ADU completion is a remarkable accomplishment. There is always a risk associated with every reward. To keep the pain at bay, here are some things you should consider when you become an ADU'er? What do they mean by pain? It’s imperative to protect your asset. You want to ensure that you have the appropriate protection to your upcoming addition and existing property. Do you put the property in a Trust or LLC? How can you ensure you have the appropriate property insurance coverage? What will the new property tax assessment reflect? Suppose you have a tenancy issue with delinquent rent, and you live in the main residence and the tenant refuses to pay? All things that must be considered as you evolve into the ADU business.

Helpful Hint: Don’t go into the post ADU’ing without your Professional Team of Advisers TAXES — CPA, TENANCY and PROPERTY VESTING - Real Estate Attorney, INSURANCE — Insurance Agent.