SB9 + ADU Strategy in Encino: Two 3-Bedroom ADUs Behind a Duplex
Most investors look at a single-family lot in Encino and see one house. We saw four homes.
On this project, we took a single-family property, converted the primary house into a duplex under SB9, and then built a two-story detached ADU building in the back with two 1,400 sq ft, 3-bedroom, 2-bath units. That's four units total, with dedicated parking for every one, and we still left the garage standing.
But the unit count isn't the interesting part. The interesting part is why we made each decision: the order we did things in, why we built bigger instead of building more, and why we walked away from a fifth unit we could have added.
Key Takeaways
SB9 was the key that unlocked everything. Converting the single-family home into a duplex gave the property multifamily status.
Multifamily status opened the door to detached ADUs. Under current California law, a multifamily property can add one detached ADU per existing unit, up to eight.
One lot became four units, including two 1,400 sq ft, 3-bed/2-bath ADUs.
Each 3-bedroom ADU is expected to rent for about $4,200 per month.
The ADUs are about 20% larger than comparable units in the surrounding area, a deliberate play for an underserved tenant pool: families.
Stacked, mirrored floor plans kept costs down by sharing a single wet wall for plumbing and electrical.
We chose not to build a fifth unit. Leaving room for parking and livability was worth more than squeezing in one more door.
Project Overview
Location | Encino, CA (San Fernando Valley) |
Starting point | Single-family property |
Strategy | SB9 duplex conversion + 2 detached ADUs |
Total units | 4 (front duplex + rear two-story ADU building) |
ADU building | Two stories, one unit per floor, identical layouts |
Each ADU | 1,400 sq ft · 3 bedrooms · 2 bathrooms |
Features | Private covered balcony, dedicated pantry, laundry room, ductless mini-splits |
Expected rent | About $4,200/month per ADU |
Parking | 4 dedicated spaces + existing garage for shared parking or storage |
Status | Completed and fully permitted |
SB9: How We Unlocked Multifamily Potential on a Single-Family Lot
SB9 allows up to two units on a lot zoned for a single-family home, with ministerial approval. That means the city reviews your project against objective standards: no public hearing, no neighbor input, no discretionary judgment call.
A lot of people think of SB9 as a way to add one more unit. For investors, the real value is what it unlocks next.
The sequence that made four units possible
SB9 turns the single-family home into a duplex. We split the primary house into two units.
The property is now multifamily. Under California ADU law, that changes the rules for what you can build.
Multifamily properties can add detached ADUs. Since SB 1211, a multifamily property can add one detached ADU per existing unit, up to a maximum of eight. Before that, multifamily properties were capped at two detached ADUs, regardless of size.
Duplex + 2 detached ADUs = 4 units. Two existing units meant two new detached ADUs.
The order matters. Build the ADU first on a single-family lot, and you're working under single-family ADU rules. Get the SB9 duplex in place first, and the property qualifies for more.
What about the garage?
We could have converted the existing garage into a fifth unit. We didn't, and that was one of the most important decisions on this project. More on that in the parking section below.
Before you buy: SB9 and ADU eligibility depends on your lot, zoning, and local rules. Always confirm with your local planning department before you build a pro forma around it. For a deeper dive on multifamily ADU rules, watch our SB 1211 breakdown video.
The Investment Case: What These Units Rent For
Each 3-bedroom ADU is expected to rent for about $4,200 per month. That's roughly $8,400 per month from the rear building alone, before you count the duplex up front.
That number didn't happen by accident. We didn't design the biggest box we could fit on the lot. We designed the unit a specific tenant would pay a premium for, then built toward it.
We're not going to hand you a cookie-cutter ROI, because there isn't one. Your construction costs, financing, carrying costs, and lot conditions will be different from ours. Rent is one side of the equation. The other side is what it costs to get there, and that's exactly the conversation we have with investors before a project starts.
Why We Built Two 3-Bedroom Units Instead of More Small Ones
The decision to build two large three-bedroom homes was intentional: NEO Builders wanted to create housing that could accommodate families, not just individuals or couples. Census data show that household mobility varies by family structure and the age of children, reinforcing the importance of creating appropriately sized housing for families who need room to grow.
Here's the gap we saw. So much of what's being built right now is studios and 1-bedrooms. That works for singles and couples, but it leaves a big part of the tenant pool with almost nothing to choose from. A family that needs three bedrooms doesn't have many options in new construction.
These units are about 20% larger than comparable units in the surrounding area. That wasn't about bragging rights. It was about building a home a family could actually grow into, not a unit they'd outgrow in a year.
Bigger isn't always better. But building the right size for the tenant you're targeting almost always is.
Build Smarter: The Design Decisions That Saved Money
Two identical units, stacked
The upstairs and downstairs units share the exact same floor plan. That makes them easier to design, and more importantly, cheaper to build.
The kitchens, bathrooms, and laundry rooms sit directly on top of each other, so they share the same wet wall. One wet wall means less plumbing and less electrical work.
Picture the alternative. If the downstairs bathroom sat on one side of the unit and the upstairs bathroom sat on the other, you'd be running plumbing across the whole building for each one. Stacking them means everything runs straight up and down.
Large-format tile
Pro tip: larger tile is often more cost-effective than small tile. You're not just paying for the material, you're paying for the labor. Fewer pieces means fewer hours of installation.
Finishes that look custom without the custom price
We used prefab white oak slim shaker cabinets with black hardware, paired with pure white countertops and a glossy white subway tile backsplash. It's clean, timeless, and durable, and it doesn't carry the price tag of fully custom millwork. For a rental, that balance matters.
Inside the Units: Every Room Has a Reason
Open concept, but not just an empty box
The kitchen, dining room, and living room are technically one room. But that doesn't mean we drew a box and called it a day.
When we design an open-concept space, we map out where the furniture will go and how a family will actually move through it. The front door sits between the living and dining areas, which creates a natural division. A large window marks the roughly 10-foot dining area, and the private balcony anchors the living room at the far end. Three zones, no walls.
Want to see how Joseph plans layouts like this? In our course, ADU Floor Plans Breakdown, Joseph walks through how he approaches designing ADU floor plans, from the lens of a general contractor who has built over 100 ADUs.
A kitchen built for a family, not a single person
10-foot island with seating for four, a 6-inch overhang, and nine drawers
36-inch refrigerator with storage above and beside it
Undermount stainless steel sink with brass hardware, plus a dishwasher
A separate pantry room with built-in storage
A family of four or five goes through a lot of groceries. That's why we gave the pantry its own room instead of a single cabinet.
A real laundry room
Instead of hiding a stacked washer and dryer in a closet, each unit has its own laundry room with a window for ventilation and a counter for folding. For a family, that's a daily quality-of-life upgrade.
Bedrooms that fit real furniture
Bedroom 1: 14 x 10 ft with a closet and its own mini-split
Bedroom 2: 14 x 14 ft, fits a king bed, with a double closet and its own mini-split
Primary bedroom: 14 x 14 ft, fits a king bed, with a double closet, its own mini-split, direct access to the private balcony, and an en suite bathroom
Individual mini-splits in each bedroom let everyone control their own comfort, which is a real advantage when kids and parents run hot and cold differently.
Two bathrooms, two different jobs
The shared bathroom (10 x 5 ft) sits between bedrooms 1 and 2. It has a double vanity with double mirrors, so two kids can get ready at the same time, plus a tub-shower combo with tile to the ceiling, a niche, and a Delta shower system. For a family with young kids, a tub isn't optional.
The primary en suite (7 x 10 ft) is the adults' space: a 4-foot fluted wood vanity topped with the same tile as the kitchen for design consistency, an extra-large shower with custom frameless glass, large-format wall tile, a hex tile floor, a window and niche, and gold Delta fixtures.
The private covered balcony
Each unit gets outdoor space off the living room. We waterproofed it in a finish that matches the wall color so it reads as part of the building.
Pro tip: because this balcony is covered, it counts toward the RFA (roof floor area). If you're planning a covered outdoor space, factor that into your square footage early.
Parking and Site Planning: Answering the #1 Objection
One of the most common complaints we hear about ADUs and multifamily properties is parking. "Where is everyone going to park?"
On this project, we added two family-sized homes and dedicated parking for all four units, plus a garage. Using pavers and concrete, we created four designated parking spaces between the front duplex and the new two-story building in the back. The existing garage can serve as extra parking or shared storage for tenants.
Building in moderation
This is where the fifth unit comes back in. We could have converted the garage into another ADU. On paper, one more unit means one more rent check.
That option exists because of SB 1211. In California, you can convert at least one garage on a multifamily property into an ADU, no matter how many units are already on the property. For the full rundown, read our breakdown of the latest ADU laws for 2025.
But it would have cost the property its breathing room, its parking flexibility, and some of the livability that makes these units attractive to families in the first place. We decided the property worked better as four great homes than five cramped ones.
Maximizing unit count isn't always maximizing value. Sometimes the smarter move is knowing when to stop.
What Investors Should Take From This Project
The lot drives the strategy, not the floor plan. Before you think about layouts, figure out what the law lets you build on that specific property.
Sequence your entitlements. On this project, SB9 came first because it's what unlocked the multifamily ADU rules. Get the order wrong and you leave units on the table.
Decide your tenant before you design. We designed for families, and every room followed from that choice, from the pantry to the double vanity.
Design for cost from day one. Stacked wet walls, repeated floor plans, and smart material choices save real money without cheapening the result.
More units isn't automatically more value. The best projects balance density with livability.
Thinking About SB9 or ADUs on Your Property?
Every lot has a different ceiling. Some can support two units, some can support four or more, and some have constraints that change the whole plan. The only way to know is to look at the property itself.
If you own a single-family property in Encino, the San Fernando Valley, or anywhere in Greater Los Angeles, and you want to know what it could become, let's talk. We'll walk through your lot, what SB9 and California ADU law allow, how to design units that attract the right tenants, and how we can help you get it built.
Want to see it in person? Watch the full Encino property tour on YouTube, and check out our SB 1211 video for a deeper look at multifamily ADU rules.
Frequently Asked Questions
Can I build ADUs after converting a home to a duplex under SB9? In many cases, yes. Once the property has two units, it's treated as multifamily under state ADU law, which can allow detached ADUs in addition to the duplex. Eligibility depends on your lot and local rules, so confirm with your planning department.
How many ADUs can I build on a duplex in California? Under SB 1211, multifamily properties can add one detached ADU per existing unit, up to eight. A duplex gets two detached ADUs. Multifamily properties may also be able to add conversion ADUs within existing non-livable space.
Can an ADU have 3 bedrooms? Yes. California doesn't set a bedroom limit for ADUs. What limits you is size, setbacks, height, and local development standards. This project has two 1,400 sq ft, 3-bed/2-bath ADUs.
How much does a 3-bedroom ADU rent for in Encino? On this project, each 3-bedroom ADU is expected to rent for about $4,200 per month. Rents vary with size, finishes, and exact location, so run comps for your own property.
Do I need to provide parking for ADUs on a multifamily property? State law limits when cities can require parking for ADUs and waives it in many situations, such as near public transit. Even when it's not required, parking matters to tenants, which is why we planned four dedicated spaces on this project.
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