Choosing an ADU Contractor or Builder: What You Need to Know

I lost $20,000 because I did not know what I should be asking when choosing an ADU contractor or builder. 

I am here to help you avoid a costly mistake.  💰

At first glance, hiring someone to construct your accessory dwelling unit seems like a walk in the park. However, there’s more to it than meets the eye. 

We will walk through the crucial steps you need to nail down before you even think about chatting with a contractor.

Trust us. A little prep work will ease your stress and pave the way for a fruitful partnership with your ADU builder.

Plus, we’ll tell you why hitting the books (or the web) for some serious ADU research will impress your contractor and save you time and money in the long run.

Armed with the proper knowledge and questions, you can make a great decision before choosing an ADU contractor or builder. 

Disclosure: This post may contain affiliate links, meaning I can earn commissions. If you decide to purchase through my links, it is at no cost to you.

Why Preparation is Key Before Contracting

Before you leap into accessory dwelling units, there’s a golden rule: Do your homework first. 

You want to know enough to be able to assess any contractors or builders to ensure they are not only legit but aren’t full of it. 

How I Learned about Choosing a Contractor – the Hard Way

Let me share a short story about how I learned an expensive lesson. The “funny” thing is that I mostly knew better but got caught up in the process.  

I hired a licensed and insured contractor. He had great subcontractors, knew the best places for budget-friendly materials, was excellent at project management, communicated well, and was likable. 

He said all the right things. Everything was sunny and smelled like roses until it didn’t. It was a costly $20,000 decision.

He was a con man, for lack of a better term. His license and insurance were bogus – probably made on the computer, his subcontractors needed to learn most of the basics, his budget-friendly materials were stolen from other jobs, and his references were all just family he paid. 

What I Should Have Done Differently

I should have contacted the contractor board to verify his license and contacted the insurance agent to see if the insurance was still in effect.

I should have asked better questions to his references and him in general. 

Where is that “Contractor” Now

Where is he now?

In jail. He may have stolen over $700,000 from hundreds of people like me. Luckily, you will have a huge amount of information I did not.   

5-Step Pre-Construction Preparation Process

Embarking on an ADU project is a journey.  Let’s review the pre-construction process in case you aren’t familiar with it. 

Here’s what you need to know before you seek out your contractor to build your backyard house or handle your garage conversion. 

1. Feasibility: Can You Build an ADU on Your Property?

The first checkpoint is feasibility. Dive into your local municipality’s zoning laws. Check out the nitty-gritty on fire codes, earthquake preparedness, and state building codes. 

This isn’t just red tape; it’s about knowing whether your dream ADU can become a reality on your property.

This is the point to get familiar with the permitting process, so when it is time to file your paperwork, you will know exactly what you need to make that perfect ADU a reality.

2. Financing: The Cornerstone of any ADU Project

Before dialing your contractor’s number, there’s one more box to tick: financing. Unless you’re one of the fortunate few who can pay with cash, you’ll need a game plan to finance your ADU. 

But wait, you don’t know how much it will cost to build an ADU or even ask a lender for a loan. That is true. A good lender can assess your financial situation and provide some realistic placeholder numbers for your ADU project.

This is when residential construction estimating services can assist the lender and even the homeowner in calculating costs.

It’s about more than just knowing what you can afford; it’s about understanding the unique nuances of the ADU market. 

Your lender may continue to work with you while you are selecting your design and ADU builder to fulfill their paperwork and loan requirements.

➡️ Read more on ADU financing.

3. Putting Dreams onto Paper & Choosing an ADU Contractor or Builder

Design and contracting is where your vision takes shape, and you select the ADU company you want to work with. There are plenty of pre-approved floor plans you could access or start from scratch to accommodate any unique needs or special functions you have. 

Many ADU builders are a great resource during the design process. They will likely have a few floor plans already ready to be built to help you assess the possibilities for your accessory dwelling unit.

This step may be one you work in tandem with finding your builder to save a massive amount of time and keep the project more affordable. 

4. Permitting: Your Blueprint for Success

Permitting is about crossing your T’s and dotting your I’s to ensure compliance with requirements for local governments. It is as simple as searching: ADU building requirements in Google.

Many ADU professionals are familiar with the permitting process and will assist throughout the whole process. 

You’ll need blueprints and structural plans that comply with local regulations, from foundation to framing, that detail the design-build.

You’re ready to roll once you’ve got the city’s thumbs up. 

➡️ Read more on Permits and Zoning.

5: Breaking Ground on your Accessory Dwelling Unit

This is when you watch your new ADU come to life! 

The Challenge of Finding Good ADU Contractors

Finding a great contractor is like discovering a hidden gem. It’s a quest, especially for something as specialized as an ADU. 

Building an ADU isn’t your everyday renovation job—it’s a niche within a niche. You can’t just call someone from the Yellow Pages and hope for exceptional service and affordable pricing. 

A survey by the National Association of Homebuilders found that it takes 22 subcontractors to build the average home. Granted, an ADU differs from the average home, but you get the idea. 

The Limited Pool of Experienced Contractors

In places like Los Angeles or San Diego, the number of contractors who’ve built many ADUs can be counted on two hands before the ADU surge happened. 

The rising popularity of ADUs has led to a surge in demand for contractors skilled in this area. With this surge comes the good and the bad to select from.

You can just imagine how difficult it is to keep up – between 2016 and 2020, there were over 10,000 permits submitted. 

Top ADU Builders Don’t Need to Advertise

With such a tight market, the best builders are often booked solid. Landing one of these seasoned pros requires timing, connections, and, sometimes, just luck.

The genuinely skilled accessory dwelling unit builders let their work and quality service speak for themselves. They thrive on referrals and their reputation so you won’t find them through a flashy ad or a sponsored post. 

The rule of thumb? If they’re good, they’re busy.

Many Contractors Don’t Work Directly with Homeowners

ADU projects can be dynamic, with designs evolving as they come to life. This can be a pain point for contractors who prefer the predictability and efficiency of less changeable projects. 

Many top-notch builders prefer to partner with project management companies that keep everything running like clockwork.

Can I hire a handyman to build my ADU?

When it comes to building your ADU, expertise matters, hiring a handyman might seem like a budget-friendly option, but it’s like putting a band-aid on a broken arm—ineffective and potentially hazardous.  

What you could risk for a “cheaper job”:

• Longer timelines
• Shoddy work
• Not using high-quality materials
• Incomplete project
• Incorrect materials
• Unapproved change orders
• Lost time and money

When Should You Start Searching for Your General Contractor

The ideal time to start interviewing GCs is after you have your construction drawings in hand. Here comes the but….some GCs have preapproved plans to offer, so getting a 2-for-1 deal with a good contractor is possible. 

Where to find ADU contractors

Here are some ideas on how and where to find your potential ADU contractors and builders. You can use trusty Google and search for:

• ADU contractor or ADU contractors near me
• ADU contractors in San Diego [insert your city]
• ADU companies near me
• ADU construction near me
• Accessory dwelling unit contractors or accessory dwelling unit contractors near me
• Accessory dwelling unit companies

You can also ask around your friends and family to see who they had a good experience with. Social Media is another place to see who is posting about their build.

How to Select a Good ADU General Contractor

Now, let’s get to the meat: how do you scout out the right contractor for your ADU dream?

1: Licensed, Bonded, and Insured: Non-Negotiables

Here’s why a licensed GC is a must:

• General Liability Insurance: This protects you if someone gets hurt on the job.
• Surety Bond: The NASBP says, “A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).”
• License: Get a copy of the license for your local licensing board. Just search for “[Your State] contractor license board.”

Get a copy of the above and call to ensure the items are still valid. It is not uncommon to have outdated documents still passing as legitimate.

2: Experience

This can’t be stressed enough. Take time to discuss the builder’s experience. Ask if they have experience in any of the following:

• Guest Houses
• Man Caves
• Building a Flex Space
• Garage Conversions
• Building Accessory Dwelling Units

While you don’t need your builder to have built hundreds of ADU structures, their experience building smaller spaces or spaces for rental income is necessary because the design is slightly different than it is in the main home. 

Much thought goes into the structure as the smaller footprint forces you to design the floor plan to maximize the living space.  

It is so much more than just being able to build a straight wall. Creativity and ingenuity will go hand in hand to be able to envision the space and carry out the vision. 

3: Asking for References

Don’t just fall for the glossy finish in the photos of their featured project. Of course, a builder will only want to give you references of their best work. 

Dig deeper. Ask them for the projects they have worked on, and then consider getting a list of permits they are associated with. You can ask about a specific project if they didn’t mention it. 

Ask potential contractors for references from former clients and follow up with them. Visit job sites and projects currently in progress – even showing up unannounced. (You can say I told you to do it!)

4: Detailed quotes and Low-Ball Offers

Details matter. If your contractor doesn’t give a detailed bid, ask for one. If they won’t give you one. Just walk away. 

Don’t forget the old saying, “You get what you pay for“? That rings especially true in construction. 

A super-cheap bid often means corners will be cut, and in the long run, that’s not just about quality—it’s about safety and value.

I can guarantee that a low-ball offer will end up costing more. You don’t want an entire part of the job not to be included in the bid and show up as an oops – if you want this, it will cost more, like this example below.

The more specific you are, the less misunderstandings can happen. 

5: Your ADU Contractor’s Network and Supply Chain

A skilled general contractor has a team and a network of trusted subcontractors specializing in everything from plumbing to roofing, which will save time trying to find those skilled in that part of the build. 

A good contractor knows the supply market inside and out. They’ll navigate the supply chain to secure the best deals and ensure timely materials delivery. 

They may also have extra room to store the supplies to buy in bulk and save money. 

6: Project Management

Think about the amount of personal involvement you’re willing to commit. Does your contractor offer the project management services for the entire project?

Building an ADU is a coordination dance for a streamlined process. Just lining up supplies and workforce to fall in place seamlessly can dramatically increase the efficiency of the build. 

Nothing is worse than hearing the plumber is waiting on the electrician, who is two weeks out.  Time is money, and project management is vital if you want any chance of a low-cost and smooth project. 

Delays can happen, but a good GC will manage the schedule proactively, keeping the project on track.

7: Considering Personality & Communication

Your relationship with your contractor will be one of the most significant factors in the success of your ADU project. Personality is not unimportant. 

Having someone easy to work with and communicate with can make or break your experience. 

You do not want to be around someone that’s a Poopy Head.

– A 9 year old boy

Regular Updates

Decide on how often you want progress reports. This could be daily, weekly, or at specific milestones. Ensure your contractor is comfortable with this frequency and that they commit to it.

Handling Issues

Every construction project has its hiccups. Agree in advance on how unexpected issues will be communicated and resolved.

Keep the lines of communication open. Ensure that you’re reachable to make timely decisions, which can prevent delays in the construction schedule.

Interviewing Multiple Contractors

Don’t settle on the first GC you meet. Interview at least three to understand the range of costs and approaches.

Ideally, see if you can do a site visit for each contractor to check out a project they are actively working on.

Don’t let a pushy contractor get you to feel as if you have to say yes to them that day. Pushy contractors need money because they don’t have work or may be trying to rob Peter to pay Paul.

Someone who has been burned before

You should not feel pressured to make your decision and should be honest with each other and let them know you are interviewing multiple people. 

Meet Your ADU Contractor Face-to-Face

Now that you know the what and the why, it’s time to get into the how. Armed with your research and preferences, you’re now ready to meet with potential contractors. 

Here’s how to prepare for that meeting:

• Know Your Vision: Be clear on what you want your ADU to be. This will help the contractor understand your expectations. Offer inspirational pictures and give as much detail as possible. 
• Have Your Documents Ready: Bring any designs, permits, or other paperwork you’ve prepared. This shows you’re serious and ready to proceed.
• Understand Your Budget: Be upfront about your budget constraints. A good contractor will respect this and work with you to find solutions.
• Ask the Right Questions: Inquire about their experience with ADUs, their process, timeline, and how they handle unexpected challenges.
• Listen and Observe: Pay attention to how they communicate. This can indicate how they’ll handle the project.
  • Are they attentive?
  • Do they offer suggestions?

Bidding and Estimates from ADU Contractors: From A-Z

What things could be on a bid or should be budgeted for? Here is a long list of things to consider in your budget. If your contractor is not handling it, you may need to.

• Accessibility features: ADA
• Appliances
• Cabinets
• Cabinet hardware
• Carbon monoxide detectors
• Cement/Concrete
• Closet shelving
• Code Compliance
• Countertops
• Deck/Patio
• Demolition of existing structures
• Doors
• Door Hardware
• Electrical fixtures
• Electrical wiring
• Energy Efficiency Upgrades
• Erosion control measures
• Exterior material
• Fencing
• Fire safety systems
• Flooring
• Furniture
• Hardscaping: driveway/parking, walkway
• HVAC
• Insulation
• Landscaping
• Lightbulbs
• Lumber
• Outdoor Lighting
• Painting
• Permit and other fees (soil testing)
• Plumbing
• Plumbing fixtures
• Rainwater systems
• Retaining wall
• Roofing
• Security System
• Septic/Sewer system/line
• Sheetrock and Finishing
• Site Clean-up
• Site prep, including excavation or soil compaction
• Smoke detectors
• Soundproofing
• Tree removal
• Upgrades to primary utilities
• Utility connection fees
• Windows
• Window treatments

The One Question You Need to Ask the Adu Contractor

What is not covered in your bid? I like to get their answer to this question in writing as well. 

No Standard Template for Bids

GCs have their own methods for preparing estimates. It’s crucial to look beyond the bottom line and understand what each bid includes—or doesn’t.

Finding common ground among the bids can help you make an informed decision. Look for trends in the categories covered, and don’t hesitate to ask for clarification on any item.

Contingency Allowance 

If there is one thing I have learned in real estate and flipping houses, always have a contingency allowance. 

I do a liberal 20%, to be sure. 

Making a Choice: Trust Your Gut

The information-gathering process may take several days or weeks. There is no shortcut to the process. 

After the meetings and gathering information, take some time to reflect.

Trust your instincts alongside the facts. The right contractor should feel like a partner, not just a service provider.

Final Thoughts

Choosing the right ADU contractor or builder is a journey that demands attention, research, and patience. 

As we’ve explored, this process is more than just picking a name from a list. It’s about finding a partner who aligns with your vision, understands your needs, and can bring your dream ADU to life within your budget and timeline.

As you embark on this exciting project, arm yourself with knowledge, ask the right questions, and trust your instincts. 

The perfect ADU contractor is ready to turn your concept into a comfortable, functional, and beautiful living space. 

Your due diligence will pay off in the form of an ADU that meets your immediate needs and serves as a valuable long-term asset to your property.

In ADU construction, patience and preparation are your greatest allies. Best of luck searching for the ideal contractor, and here’s to a successful ADU project!

Frequently Asked Questions