Is it an SFR with an ADU...or is it a Duplex?

[alebrewer]

If you do classify it as duplex, I seriously doubt if the typical investor would be concerned whether the units are attached or not. I'd expect they'd be more concerned about the income potential of each unit. Then again, all RE is local...

 

[nstanbru]

It depends on the zoning and what the City called it on the permit. An R1 zone most likely won't allow multi-family but an SFR with an ADU is OK. So when you say the City now allows 2 units in the R1 zone, that may not be correct. You need to review the permit, it will tell you exactly what it is. Also, I know of several Cities that max out an ADU at 800 sq. ft. and no larger, regardless of the size of the main home. Some of the prior restrictions have also been modified with respect to renting them out, especially the owner occupant part. So the fact that it will be rented is not relevant as to it being an ADU or not.

 

[alebrewer]

It depends on the zoning and what the City called it on the permit. An R1 zone most likely won't allow multi-family but an SFR with an ADU is OK. So when you say the City now allows 2 units in the R1 zone, that may not be correct. You need to review the permit, it will tell you exactly what it is. Also, I know of several Cities that max out an ADU at 800 sq. ft. and no larger, regardless of the size of the main home. Some of the prior restrictions have also been modified with respect to renting them out, especially the owner occupant part. So the fact that it will be rented is not relevant as to it being an ADU or not.

Hasn't most of CA upzoned, nstanbru? It's not as common here in TX, but that's all we hear out of CA and other areas where property values have skyrocketed... I'm sure it won't be long before Austin has to do something like that...

 

[ZZGAMAZZ]

What my dividing line is, is that the ADU has its own separate address. Most granny flat/guest houses do not have sep addresses, and that's what makes them a guest unit. I don't yet know if it has separate utilities, but since its a new ground up separate structure, I'm guessing it does.

Also, they ordered it as a 1004. After I found out the details, I sent it back asking them to change to 1025. No word yet. IMO, a 2br/2ba unit is no granny flat/ADU. If it were a studio w/o a sep address, then fine.

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A California appraiser first needs to be intimately familiar with the 2020 CA ADU regs that describe the underying physical improvements that qualify for an ADU (keeping in mind that 2 rather than just 1 ADU now are legally permissible, each with specific physical standards, and with the occupancy requirements, for all 3 units, depending on whether 2 or 3 units now exist). As for the "address," most every Jurisdictional Authority will advise you that addresses are a Post Office factor (that have little if any bearing on the appraiser's HBU analysis. As for the client engagement . . . often meaningless because the particulars pertain primarily on a prior appraisal (which often is incorrect) but even more so on the lendering criteria (which might or might-not correspond with the appraiser's designation of realty. which is a surprisingly meek challenge to address if the lender is presented with a compelling rationale).

A SFR w/ADU might be ordered as a duplex the same day that a SFR on a parcel next to a 3-plex on a parcel is ordered as a 4-unit residential income property . . . weird to me but it appears that a disconnect often exists between the loan officers and the lender's underwriters . . .

 

[ZZGAMAZZ]

If the Money is right why not? Lender Surrogates AKA AMC Phone Monkey Dot Com don't know what the assignments actually are ...they presume their all cookie Cutter Base Line Fee. Majority of the time they are right. Sometimes their almost right IOW its not a Cookie Cutter but its not a complex assignment. Then sometimes they get it totally wrong when one of these Bad Boys shows up.

Here is what I have been doing. I try to get my Quote right. They will send it over and then when I really Dig in to the Assignment I go back to them and Say "Hey Fee increase additional Research says this a a 15 Inning Ball Game...I give them a New updated Quote. Do they accept it, Sometimes. other Times they say we have to get the Client approval and I don't hear back from them...sometimes I do.... Either way I am the Winner, not them.

Now a good argument is you can do two or three easier ones in the same amount and make more money. Yes, thats true. Well the answer is simple 3 easy one total fee is the Bottom fee+ for a difficult one. You have to be as profitable or even a little bit more profitable than the three combined.

There really is no other way to do this. Its all about Fee/time. That's assuming you have the experience. Experience meaning; Being able to create a logical path to your conclusion. Identifying the Valuation problem and the steps to solve it. We are only as good as the Data that's available.

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15 innings equal 12 runners on second base without any of them entering the batter's box. Whole new ball game, to apply a double entendre . . . or possibly a "triple entendre" if getting to second base without hitting a double is factored?

 

[Fernando]

Normally I call it a SFR with an ADU in a single family zone. The problem is you don't know what the client wants.
I did one with SFR and 2 ADU. Eventually, I call functional inadequacy in converting back to SFR and ADU. The borrower had to take out the 2nd kitchen.
I had to go back for 1004D to take photos that kitchen is gone. Whether the kitchen was put back, I don't care.
Now when I see a 2nd address or an inlaw, I don't take such order unless well compensated.

 

[nstanbru]

Hasn't most of CA upzoned, nstanbru? It's not as common here in TX, but that's all we hear out of CA and other areas where property values have skyrocketed... I'm sure it won't be long before Austin has to do something like that...

I wouldn't describe it as an "upzone". This pretty generic, but what the State did was pass a regulation prohibiting jurisdictions from banning ADUs. The various jurisdictions are still able to have building requirements such as size of the ADU, lot coverage, set backs, etc. Most have minimum and maximum areas for an ADU (or Junior ADU). The issue the OP raised is what he wants to call the property because of the size of the ADU and the fact it will be rented. IMO, these 2 items are not relevant as to whether the property is a SFR w/ADU or a duplex. What matters is the zoning and what that particular zoning allows. Secondly, a review of the permit is needed to verify what the City says it is. An appraiser can't arbitrarily decide on his/her own opinion as to what the property is called.

 

[alebrewer]

I wouldn't describe it as an "upzone". This pretty generic, but what the State did was pass a regulation prohibiting jurisdictions from banning ADUs. The various jurisdictions are still able to have building requirements such as size of the ADU, lot coverage, set backs, etc. Most have minimum and maximum areas for an ADU (or Junior ADU). The issue the OP raised is what he wants to call the property because of the size of the ADU and the fact it will be rented. IMO, these 2 items are not relevant as to whether the property is a SFR w/ADU or a duplex. What matters is the zoning and what that particular zoning allows. Secondly, a review of the permit is needed to verify what the City says it is. An appraiser can't arbitrarily decide on his/her own opinion as to what the property is called.

Again - I'm asking out of ignorance, as the upzoning issue isn't as common around my geography, but by prohibiting jurisdictions from banning ADU's also prohibit jurisdictions from not allowing the units to be rented?

 

[nstanbru]

Again - I'm asking out of ignorance, as the upzoning issue isn't as common around my geography, but by prohibiting jurisdictions from banning ADU's also prohibit jurisdictions from not allowing the units to be rented?

There was no change in any zoning. An R1 zone is still a single family zone and the other zone codes also remain the same. As far as renting is concened, owners are not prohibited from renting the units. Originally, there were owner occupant requirements, basically for the main residence. Those restrictions, to the best of my knowledge, have been lifted. Therefore, an owner can rent the ADU (and the main house).

 

[alebrewer]

There was no change in any zoning. An R1 zone is still a single family zone and the other zone codes also remain the same. As far as renting is concened, owners are not prohibited from renting the units. Originally, there were owner occupant requirements, basically for the main residence. Those restrictions, to the best of my knowledge, have been lifted. Therefore, an owner can rent the ADU (and the main house).

So again - from ignorance - one of the primary distinctions between an SF zoning and a 2-4 family zoning, is that ADU's cannot be rented in most SF zonings (at least insofar as ADU's are concerned). If the ADU's CAN be rented under the new regulations, what is the practical difference between an SF zoning and a 2-4 family zoning? Just the setbacks, minimum GLA, etc?