Meet Your Match with A-du Build

October 15, 2024
Chris Koss, AIA

Enhancing and supporting the ADU revolution, A-du Build simplifies what can otherwise be a complex and frustrating journey of constructing your ADU. A-du Build keeps the process as simple as possible: simply pick a design, choose financing options, and pick your contractor.
We do the rest.
Here's how to kickstart your ADU journey with A-du Build:

Step 1: Pick a Design

- First, you need to determine which ADU type best fits your needs. Don't know what type of ADU you should build? Click here to learn about the different types of ADUs.
- Next, filter and browse the A-du Build marketplace's collection of off-the-shelf, pre-designed, and pre-approved ADU designs ready to be coordinated with the Los Angeles building department and bid out to contractors. Can't find a design that works in the Build marketplace? Don't worry! With the click of a button, you can start working with our ADU design team to design around your site-specific needs.
- For detached ADU, JADU, or duplex types: with a click of a button we'll research and analyze your property to provide you with a site plan showing the footprint of your selected ADU on your lot.
- For garage conversions, basement/internal ADU conversions, and attached ADU types, we'll need a little more information from you.
Once you're happy with your ADU design, we'll provide you with a rough cost estimate to give you an idea of construction costs.

Step 2: Choose a Financing Option

At A-du, we're proud to partner with lenders who believe in and support the future of housing. Simply put, if you need to finance your ADU then your ability to secure financing may depend on:
- Your location
- Your credit score
- Your income
- Your existing debts
- Your existing home equity, and
- The amount of value your ADU adds to your property value

Not sure which financing option is best for you? Reference the following table to help navigate different ADU financing options.

High Income Homeowner
Low Income Homeowner
High Home
Equity
- Cash-out refinance
- Home Equity Line of Credit (HELOC)
- Second mortgage
- Cash-out refinance
- Ground lease agreement
- Home Equity Line of Credit (HELOC)
- Reverse mortgage
- Private money
Low Home
Equity
- Construction loan
- Renovation loan
- Existing cash/assets
- 401(k) loan
- Existing cash/assets
- Borrow from family/friends
- 401(k) loan


Source: The Casita Coalition's ADU Finance Guide for Homeowners

Step 3: Choose The Right Contractor

As for any construction project, when choosing your contractor it's crucial to do your own homework and don't be afraid to shop around for the right construction company. That said, A-du has a selection of vetted, professional contractors for you to choose from. Whether you choose to move forward with one of A-du's selected contractors or you want to choose your own contractor, we strongly encourage you consider the following:

1. Get at least three bids before choosing your construction team. It's important to understand that you get what you pay for and if a bid comes back extremely lower than the other two bids, there's probably a reason. Remember, when you hire a contractor you're not only hiring a company but you're entrusting people with building your ADU.

2. Busy contractors are good contractors, so start your search early! Most of the time, if a construction team is busy that means they're popular for the right reasons. "If a contractor says they can start next month, that is your first red flag. Either you're lucky and catching them when they just lost a job, or it's more likely that they don't get referred due to a poor job on their past projects" - architect Sevak Karabachian.

3. Ask your bidders about the types of insurance they carry. In order of importance, ask if they carry workers compensation, general liability, and vehicle insurance. These policies protect you from liability and loss, and are all things that cut-rate contractors cut to lower their overhead and undercut homeowners.

4. Check the track records of competing bidders. One easy way is to talk to other people who've hired your bidders to work on their ADU projects. Construction professionals you want to work with should be quick to provide you with contact information for their previous customers, and if they don't then that's another red flag.

5. Visit contractor's ADU project construction sites. These visits will give you an idea about the contractor's quality workmanship, attention to detail, and different design styles. If it's a rental unit, see what they're doing to provide privacy and a separate sense of space. It's hard to visualize the size of a unit just from a number like 400sf or 800sf, so visiting a few different construction sites will give you a better sense of how large your unit will feel.

6. Your contractor should have previously worked in your city. Local building officials stress that homeowners interested in building ADUs find a contractor who is familiar with their city's permitting process since rules & regulations typically vary from city to city.

7. If staying within your budget is a top priority for you, make that clear to your contractors from the get-go. It's no secret that different contractors offer different pricing models but we suggest if budget is a top priority that you find a contractor who charges a fixed fee to avoid surprise expenditures.

8. Don't start construction work until you have a written contract. From the Contractors State License Board's advice on what to look for in a contract or binding agreement, "a written agreement is one of the most important communication tools for both you and the licensed contractor. It insures there are no misunderstandings about what a job will include.

9. Ask to see your potential contractor's standard contract form. A thorough contract tells how the work will be done, when it will be done, what materials will be used and how much it will cost.” Everything you expect to be done, and everything the contractor has offered to do, should be included in the contract in as much detail as possible. This includes time frame for completion, quality of materials, craftsmanship to be provided, and the method and schedule of payment. In short, it should cover everything and anything that is important to you. The more details you lay out in the contract means the fewer disputes you may have to face.

In summary, here are the biggest red flags to watch out for:

One contractor's bid comes back extremely lower than the other two bids

The contractor is immediately available to work on your project

The contractor does not carry workers compensation, general liability, and/or vehicle insurance

The contractor does not quickly provide you with the contact information for past clients

The contractor won't let you visit job sites to see work in progress.

The contractor has never worked in your area.

The contractor wants to start work without a written contract

The contractor does not have a standard contract form

Step 4: Move In or List

The hard part is over and now finally the fun begins. Once your ADU build is complete and you've received certification of occupancy you finally get to move in or list your new rental property! If you use A-du Build for your ADU and wish to generate rental income then we'll list your unit for you, free of charge, on A-du Rent: Los Angeles's first ADU-exclusive rental marketplace. Listing your unit on the Rent marketplace grants you access to A-du Manage, our suite of property management tools curated to meet all your ADU rental needs. Click here to learn more about how A-du makes ADUs more universally accessible.

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