Step-by-Step: Buying a Property with Space for an ADU and Building It

If you’re looking to acquire a property with ADU potential (or with usable space for an ADU), then build that unit to generate extra income or equity, here’s a structured roadmap you can follow—tailored to the complexities of Los Angeles in 2025.

1. Identify Target Properties with ADU Potential

Criteria to look for:

• Lot size and configuration: adequate backyard, side yard, or unused rear yard space

• Zoning and permitted use (residential zoning that allows an ADU)

• Orientation / access: space for separate entrance or utility routing

• Existing structures that might convert (garages, accessory buildings)

• Proximity to transit (if within ½ mile of public transit, parking requirements may be waived per LADBS rules) (LADBS)

• Check local overlay restrictions, historic or HOA constraints
  
  

Use the City’s zoning tools (e.g. ZIMAS or City Planning maps) to confirm the lot’s zoning and permissible uses.

2. Underwrite an ADU Scenario Before Purchase

Before you buy, run a side-by-side pro forma:

• Estimate construction cost (baseline for new detached ADU, or conversion)

• Permitting, architectural/design fees, utility upgrades, site prep

• Carrying costs during construction (taxes, insurance, utility draws)

• Projected rent for that ADU in that submarket (Studio City, Burbank, Sherman Oaks, etc.)

• Value uplift: additional net income multiplied by a cap rate to estimate valuation impact

• Risk buffer & contingency (10–20 %)
  
  

If the upside still remains strong after buffers, the deal can make sense.

3. Make the Purchase with ADU Intent in Mind

• Make your offer contingent on feasibility due diligence for the ADU

• Engage an architect / ADU specialist early to evaluate site constraints

• During escrow, submit conditional use / preliminary conversations with LADBS or City Planning to flag major obstacles

• Ensure property title, easements, and utility lines allow for new construction
  
  

4. Design & Plan the ADU

• Decide unit type: detached, attached, garage-conversion, or accessory structure

• Leverage LADBS Standard Plan Program — pre-approved plans reduce plan-check time and simplify permitting burden (LADBS)

• Ensure the design meets setback, height, and design standards (e.g. side and rear setbacks often 4 ft minimum in LA) (autonomous)

• Include required solar panels on new detached ADUs per LADBS requirements (LADBS)

• Prepare site plans, utility routing, grading, and drainage
  
  

5. Submit Permits and Pass through Plan Check

• Submit your plans to LADBS (if within City of LA) or the corresponding county authority depending on jurisdiction (Aggregate Construction Group)

• Because of State and LADBS rules, ADU permit reviews are often ministerial (i.e. no discretionary hearings) if they conform to standards (LADBS)

• Use Standard Plan option to shorten review

• Expect plan-check times of multiple weeks to a few months depending on complexity
  
  

6. Construction & Oversight

• Begin site prep: grading, footing, utility trenching

• Build structure, mechanical, electrical, plumbing

• Inspections at key milestones

• Finish work: drywall, flooring, cabinetry, fixtures, landscaping

• Punch list and final inspections
  
  

Depending on scale and complexity, construction may take 3–6 months or more.

7. Lease & Operations

• Market the ADU for rent (long-term or short-term depending on your strategy)

• Use tenant screening, property management systems, and lease agreements

• Integrate the ADU into your maintenance and renewal cycle

• Monitor returns and compare them to your pro forma
  
  

Los Angeles-Specific Considerations for 2025

• Los Angeles permits no replacement parking if the ADU is within ½ mile walking distance of public transit or if you remove covered parking to build the ADU. (LADBS)

• The City adopted ZA Memo 143, updating ADU and JADU development standards, including clarifications on combinations and new rules effective in 2025. (Los Angeles City Planning)

• In many LA neighborhoods, multiple ADUs / JADUs per lot are becoming more permitted under new combination rules—including a detached + attached + two JADUs in qualifying lots. (GatherADU)
  
  

Buying a property with room to build an ADU and executing the build strategically is one of the most reliable ways to stack income and value on a single lot. The key is disciplined underwriting, navigating local regulations, and executing with control. In LA’s neighborhoods like Studio City, Burbank, Valley Village, Sherman Oaks, and Toluca Lake, leveraging Standard Plans and modern ADU rules gives you a powerful edge—if done right.

Want to Learn More or Get Personalized Guidance?

 If you’re serious about learning more about funding or real estate opportunities in Los Angeles, email us at vinay@chinnirealty.com or call/text (323) 996-3746 to schedule a conversation.

Recommended Reads

To deepen your knowledge, explore these related guides on our site:

• What ADUs and JADUs Are and How They Add Rental Income

• Why Multifamily and ADUs Can Be Better for Long-Term Wealth Building

• Systems to Automate Rental Management (Smart Locks, Cleaning Crews, and More)
  
  

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