How ADUs Are the Bridge Between Equity and Housing Solutions
If you live in California and own a home, you might be sitting on gold without even realizing it.
During a recent conversation on Steph’s Podcast with Babak Mortazavi of LADU.co, we uncovered one of the most overlooked financial opportunities for homeowners today: 🧱 Untapped Home Equity.
The Numbers Don’t Lie
- $3.5 trillion in home equity exists in California.
- $1.5 trillion is in Los Angeles County alone.
- Over 1 million single-family homes in LA County are built on 5,000 sq. ft. lots, many of which have just 1,000 sq. ft. structures leaving space and money on the table.
So Why Isn’t It Being Used?
Most homeowners:
- Don’t realize what’s possible.
- Think building or legalizing an ADU is too complex or expensive.
- Aren’t aware of recent legislation that makes it easier (like AB 2533 and SB 1211).
 The Opportunity: Build Wealth Without Buying New Real Estate
Adding or legalizing an ADU:
- Increases your property value instantly (forced appreciation).
- Creates cash flow through long-term or midterm rentals.
- Lets you tap into equity via refinance or creative lending.
- Offers multigenerational flexibility (think: aging parents, adult children, or co-living).
Why Homeowners Are the Key to California’s Housing Crisis
Public and private sectors can only go so far. But homeowners own the land, and that land holds potential.
Education is the missing link and that’s exactly what Babak’s team is focused on. They’re even offering free feasibility site visits in LA County to help homeowners understand what’s possible.
Creative Financing for ADUs
Don’t have immediate access to cash? Options include:
- Home Equity Investment agreements (no monthly payments share future appreciation instead).
- Rental income-based ADU loans.
- FHA-backed future value underwriting.
- HELOCs, renovation loans, or 2nd-position lending.
These tools unlock capital without selling your home or draining savings.
Your home isn’t just a place to live. It’s an investment vehicle that when understood and leveraged properly can generate income, build generational wealth, and create housing solutions in your community.
Work with our team of ADU investment experts to increase your property value, earn rental income, or expand your family's living space.
ADU Meet Up
Join us for an exclusive ADU Meetup, where homeowners, future ADU builders, and real estate enthusiasts come together to connect, share ideas, and gain valuable insights into the growing world of Accessory Dwelling Units (ADUs).
