FAQ Help Center
What is an ADU?
An ADU is an Accessory Dwelling Unit or more commonly known as a mother-in-law apartment or granny unit.
California Governor Jerry Brown signed SB 1069 into law on 9/27/2016 to encourage California cities to speed up approval processes and relax ADU restrictions to address the current housing crisis. You can find more information here: http://www.mercurynews.com/2016/09/27/california-eases-restrictions-on-granny-units/
What services does ADU Builder provide?
ADU Builder is a Palo Alto-based real estate development company that specializes in Accessory Dwelling Unit (ADU) finance, construction, and rentals. ADU Builder leverages the latest innovations in “tiny house” architectural design, as well as new construction materials and techniques, to construct high quality “accessory dwelling units” (also known as “in-law units”) with minimal inconvenience to homeowners. ADU Builder builds in-law units for local homeowners at no cost in exchange for a share of rental proceeds.
How much does it cost to build an ADU and how long will it take?
Prefab cost is usually 10-20% cheaper than traditional outdoor construction. Because we make use of the latest technologies and materials in prefabricated housing, construction typically takes four to five months to complete. It is much faster than traditional construction because most of the Build code inspection can be done in the factory instead of at the job site.
Can I change my mind later?
YES, after contract is signed, the construction cost will be recorded as a lien on your property. You can cancel the contract and sell your house anytime with no prepayment penalty. You will have to pay our company back the construction loan amount plus about 2% interest.
Do you offer turnkey solutions where the homeowner pays upfront for construction costs?
Yes, ADU Builder can help to create an architectural design plan, apply for the necessary building permits, and manage the construction for you. All you need to do is sign contract and get the keys to your new unit.
What happens to the assessed value of my property after building an ADU?
Reassessment of a property is required any time new construction occurs (section 71). Thus, new construction, when not considered normal maintenance or repair, requires a new assessment if it adds value to the property. The market value (not necessarily the cost) of the addition or other "new construction" is determined by the assessor and added to the existing property assessment. The value of the existing property is not affected.
New construction that adds value to the property represents incremental value added to the existing property and will generate a supplemental assessment. The existing property, however, is not reappraised; its assessed value will not change except for the annual inflation adjustment of up to two percent. For more info see: https://www.boe.ca.gov/proptaxes/faqs/newconstruction.html#4
Why is ADU construction better than taking out a reverse mortgage?
Reverse mortgages give you instant cash, but they do not increase your home value or provide you with reliable ongoing rental income streams
Who finds rental tenants after the adu is built?
We do. Our executive teams are licensed realtors with many years of property management experience. As the homeowner, all you need to do is sign a contract to get the ADU build, and collect rent once it's ready.
What percent of the rent do you take from the rental income and how long is the agreement?
It depends on the homeowner. The percent we take ranges from 0-70% of the total monthly rent. Homeowners who want to earn a larger share of the rent can make a downpayment on the ADU. Homeowners who choose not to make a downpayment will get 30% of the rent. The loan term is 25 years. There is no prepayment penalty, and homeowners can pay back the principal and cancel the contract anytime.
Have you built any ADU Units I can visit?
We have one finished ADU project in East Palo Alto, and two in progress: one in Daly City, and one in West San Jose. Please call us to schedule a site visit during regular business hours.