Why the real all-in cost of an ADU rarely matches the number an owner quotes out loud

A useful case study in why underwriting off someone's stated project cost is risky: a detached 640 square foot ADU where the general contractor's signed contract said $160k, but the true all-in cost told a different story once every category was counted. Permits and city impact and connection fees added another $18k, bringing the total to $178k. Driveway widening for access, plus a full repave because a patch job looked poor next to new work, added another $13k, to $191k. Fence and a small patio, necessary for the unit to have any real rental privacy from the main house, added a final $14k, landing at $205k total. The unit rents for $1,750 and covers most of a mortgage payment, which is a genuinely good outcome. But the owner in this case still tells people the project cost $160k, not because of dishonesty, but because the signed contract reads as the cost and everything else feels like a separate life expense. Anyone underwriting an ADU project off a number quoted casually, rather than a full accounting of permits, site work, and finishing touches, should expect to land meaningfully under the real number, in this case by close to 28 percent.