ADU Build Out in Unincorporated Adams County

ADU investors Chantel and Tyler join me in this episode to talk about a Denver ADU property they purchased in 2017.

This investment property is located near Regis University just North of Denver in the Chaffee Park neighborhood but on the Adams County side.  The property had unique characteristics like a full kitchen in the basement and an old garage/barn structure at the back of the property when the buyers looked at it in 2017.

There was upside in improving the interior, adding a bathroom and separate entrance to the basement and repurposing the old barn into an ADU. Unknown to the buyers at the time they purchased in 2017, the property was zoned for ADUs.

The timeline from purchase to completion of improvements took 9 months.

Investor Profile

• Investor couple – Realtor and General Contractor
• Long term Buy & Hold
• Focused on value add properties and short term rentals

Deal Quadrant: MLS

Read about the deal quadrant and finding Denver Investment Properties.

Investment Property Details

• Type: Single Family Home with Two Unit or ADU zoning
  • 1bed + loft/1 bath with full kitchen also in the basement
• Location: Chaffee Park (Adams County)
• List Price: $450,000
• Purchase Price: $441,000
• Why we liked it:
  • Two unit zoning
  • Location near downtown
  • Full kitchen in the basement

Property Contract Details

• Finding the Property: MLS. This property was still available after the weekend so they had an opportunity to put in an offer below list.
• Inspection items resulted in 5k seller concessions

Property Financing Details

• Lender: 
• Loan Type: 3% down, Conventional, 4.75%
• Appraisal: At Value
• Seller Concessions: $5000
• PMI: Loan had option for no PMI
• Interest Rate Buy Down?: No

ADU Before and After Photos

Conclusion

Knowing everything they know now, the buyers would definitely choose to do this deal again. They stress the importance of finding the right property by looking in ADU friendly areas, at lot size, zoning requirements, and short term rental laws.

Good advice for buyers interested in ADUs is to make sure to consider start up costs including water tap and determine if the sewer line can handle the additional load. It’s also important to thoroughly inspect the foundation and ask the seller for drawings of the home.

It’s also a good idea to have your list of contacts to reach out to before buying the property. These include a General Contractor (GC), engineer, the city in which the property is located, and the water district representative.

If you would like to learn more about ADUs in Denver, check out our free Denver Additional Dwelling Units (ADU’s) Course.

You can also find helpful information in our Building an ADU in Denver Basics blog post.

YouTube Video: ADU Build Out in Unincorporated Adams County