A Condo-Converted ADU Family Compound

Vision for an ADU

When we purchased our single family home in March 2020, the main downside was there was no obvious spot for an ADU. We are fans of having flexible living spaces and like the mission of denser living in Portland’s center. Our house is placed roughly in the middle of our 5,000 sq ft lot and while we could have technically squeezed an ADU in the backyard, it would’ve meant tearing up mature landscaping and losing play space for our kids. 

Four years later, we’ve ended up with a family compound and endless flexibility, but it was not the result of some brilliant mastermind plan. We kind of stumbled into this solution, learning as we went, and enabled by Portland’s increasingly flexible zoning rules. 

When we bought our house, we initially gave little notice to the 1940s side-by-side duplex rental property next door. We were occupied with the move and managing childcare during the pandemic. One thing that became abundantly clear over the ensuing months is that while we were lucky to have family in town, it would be more amazing to have family even closer…like right next door. Enter: the duplex. The duplex had a detached 2-car garage where we imagined putting the ADU we’d always wanted, just a few feet beyond our backyard property line. If only we could just buy that little garage! 

Our neighborhood’s zoning is R5, which meant bisecting the lot was impossible, but luckily the duplex owners were receptive to an off-market transaction for the whole place, and we closed on the property mid-2022. We started work on the ADU shortly after that, and completed our family compound vision in the spring of 2023.  

Here’s a bird’s eye view of how it turned out: 

We now have family occupying the ADU as well as one duplex unit. The other unit is a rental. 

In another convenient bit of luck, a hedge is what separated our property from the one next door, so it’s been simple to create flexible openings in the hedge to allow the kids to go back and forth between family members. 

ADU Building

The city of Portland’s Residential Infill Project now allows properties with duplexes to have ADUs, which is what made this whole thing possible. We built the ADU knowing we’d eventually condo-convert the whole property (more on that below), and wanted it to work as a standalone entity. This means it has its own utility connections. We are fans of a more traditional architectural style, which is more consistent with the early 1900s homes that dominate our neighborhood. Rather than matching the mid-century duplex, we designed the ADU to look like a little English cottage nestled between the neighboring buildings.

Our architect, Asmund Tweto, made sure the scale and orientation of the cottage suited the neighborhood. As a testament to his skill, people frequently ask how long ago we remodeled the cottage, assuming it’s always been there. They’re always shocked to learn it’s brand new construction. 

Stephen Hull was the builder on this project, and we were so pleased with his work. 

Total cost – $412k including

• Building: $367k
• Architecture & initial permitting: $28k 
• Landscaping & patios: $17k

We went with higher end finishes, European kitchen appliances, extra built-ins, and so on, because it was built for family members. One could save around 5-10% of the cost without all these customizations. Having separate utility connections for the ADU also added to the cost, around $10-15k. 

Timeline

• Started drafting plans: Nov 2021 (Note: our architect was working off plans he’d already created for my mom’s ADU previously, so we were able to save some money and time)
• Construction began: July 2022
• Completed: March 2023

The Condo Conversion Process

We ended up using the ADU and the north duplex unit for family members, and renting out the south unit. Once that unit is vacant our plan is to sell it, which we can do because we recently condo-converted the whole property. This will let us recoup the cost of building the ADU. 

Because we can’t divide the lot, the only way to sell one unit is to create a condo development. This process converts the duplex plus ADU into a three-unit condominium: the ADU, the north side duplex unit, and the south side duplex unit. 

It took 6 months for us, but our lawyer said it can sometimes take up to a year to complete. The process was pretty wild, and we fully had no clue what we were doing. Luckily, our attorney and paralegal (Karna and Deb at VF Law) were pros and led the charge very competently. Everyone living in the units is given legal notice and first right of refusal to purchase their units, and there are mandatory waiting periods which can make things drag out if you don’t have cooperative tenants.

Condo Conversion Cost – $26k including

• Legal fees: $16k
• Survey, reserve study, inspection, OREA and city fees: $10k

It’s not cheap, but the property is unquestionably more valuable when sold as 3 individual units rather than one whole compound, so we try to focus on the big picture. 

One complication is that we got a mortgage on the whole property when we first bought it, so once we start selling individual units we will need to pay off the mortgage and look into individual loans for the condos. I know developers who do this professionally typically sell all the units at once, which makes it a little smoother financially. 

This also requires a new insurance policy, since now we have to insure the HOA as well as the structures, while individual owners will insure the contents of their units. We wanted to keep HOA fees and bureaucracy minimal, so we put as many items as possible under the control of individual owners and just put the exterior structure of the duplex under management of the HOA. This let us keep monthly fees low: $204/month for each duplex unit and $54/month for the ADU. 

We look forward to sharing our ADU on the ADU tour and will be onsite to answer your questions about it!