Multi unit ADU Buying Guide
ADU Buying Guide: Unlock Property Value and Master the Art of ADU Investing
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How Many ADUs Can You Add to a Multifamily Property?
Under California ADU law (Government Code §66323), an existing multifamily property can add:
- Detached ADUs: up to 8, but no more than the number of existing units on the lot.
- Conversion ADUs: at least 1, or up to 25% of the existing units, built inside non-livable space such as garages, storage rooms, boiler rooms, or attics.
Both allowances can often be combined, so the total number of ADUs can exceed the number of units you start with.
| Existing property | Detached ADUs (max) | Conversion ADUs (max) |
|---|---|---|
| Duplex (2 units) | 2 | 1 |
| Triplex (3 units) | 3 | 1 |
| Fourplex (4 units) | 4 | 1 |
| 8-unit building | 8 | 2 |
Actual counts depend on lot size, setbacks, parking, utilities, fire access, and how your city applies state law. See how it plays out locally in our Long Beach, Anaheim, Santa Ana, and Garden Grove ADU guides.
Detached ADUs on Multifamily Lots
- Existing multifamily building: up to 8 detached ADUs, as long as the number of detached ADUs does not exceed the number of existing units on the lot.
- Proposed (new) multifamily building: up to 2 detached ADUs.
The 8-unit cap came from SB 1211, which took effect January 1, 2025. We break down what it means for investors in SB 1211: Up to 8 Detached ADUs on Multifamily Lots, and you can see the full rule set in our California ADU laws guide.
The 25% Rule: Converting Non-Livable Space
When you convert existing non-livable space inside a multifamily structure, California allows at least one ADU and up to 25% of the existing units. Spaces that commonly qualify include:
- Garages and carports within the structure (see garage conversion ADUs)
- Storage rooms
- Boiler or laundry rooms
- Attics and basements
Converted spaces must meet building code for habitability. Before buying, plan for how utilities will be split. Our guides on utilities for multi-unit properties and water submetering cover the details.
Multifamily ADU FAQs
Yes. A duplex can potentially add up to 2 detached ADUs plus 1 conversion ADU, for up to 3 additional units, subject to lot conditions and local standards.
An existing multifamily property can add up to 8 detached ADUs, but no more than the number of existing units on the lot. A proposed multifamily building can add up to 2.
No. Junior ADUs (JADUs) are limited to single-family homes.
Yes. These are state minimums, and cities cannot adopt rules that block them. Local standards like height, setbacks, and design review still apply.
How can an ADU Realtor help Investors Build Smarter Portfolios?
Working with an ADU Realtor gives you an advantage that most investors don’t have. Dylan Serna helps experienced investors identify and find ADU potential properties.
Here’s how Dylan helps his clients:
Here are some of what Dylan the ADU Realtor provides:
ADU Consulation: Go over goals with ADU, establish all in budget and how much cash flow you should expect per month
Main Home Makeover Without Lifting a Finger System: Takes the stress out of organizing contractors so your home is rent-ready and cash-flowing by the time your first mortgage payment hits.
The Underwrite-It-First Profit Plan : We underwrite the property you’re interested in before you offer— analyzing the mortgage payment, ADU and main home rents, to ensure it’s a solid, profitable deal.
Step-by-step support from property search to ADU completion, ensuring each project stays profitable.
What are the Steps to take if I want to buy an investment property to build an aDU?
We call this Process The Serna 5
Step 1: The Vision Session
Step 1: “Vision Session” starts with a one-on-one consultation with Dylan Serna, ADU Realtor in Orange County. Together, you’ll clarify your investment goals, timeline, and budget, and decide whether to build an ADU on a property you own or buy a new ADU-ready property.
Step 2: Exploratory Tours
Step 2: Our Exploratory Tour transitions to touring handpicked list of Single Family Homes that have ADU potential based on your goals. Walk through ADU potential lots and narrow down the choices that best fit your investment needs. Once you find the right property, we start offering. Once our offer is accepted, we go into escrow.
Step 3: Review the Property During Escrow
Step 3: After your offer is accepted, the escrow work begins, including inspections, appraisal, and due diligence. You will also connect with an ADU architect who can review the property and prepare an ADU feasibility report. This added review helps identify possible design paths, property limits, and project considerations before you move forward with ADU plans.
Step 4: Prepare the Home for Its Next Phase
Step 4: Once the purchase closes, the property becomes yours, and your next phase begins. You can plan improvements to the main home while preparing for the ADU project. The goal is to move each part forward carefully, with the property use, timeline, budget, and rental plans kept in view. This helps prepare for construction.
Step 5: Build The ADU And Prepare To Rent
Step 5: After plans are submitted and approved by the city, construction can begin with your chosen contractor. When the ADU is complete, it must pass the required final inspection and receive its Certificate of Occupancy. Then you can prepare the unit for rental use and begin the next phase. Local requirements and timing vary.