Seller mentioned the basement had been rented since 1994 like it was nothing
I don't build anything myself, I put money into other people's deals, so my ADU education came secondhand and by accident.
I was walking a small property with an operator I was considering backing. Seller was an older woman, original owner, and she mentioned in passing that the downstairs had a tenant. We went around the side to a separate door, down four steps, and there was a full apartment. Kitchen, bath, bedroom, a man in his fifties who'd lived there eleven years and paid $650 a month in cash.
No permit. Ever. Built by her late husband in 1994 with, she said, help from a friend who did HVAC. Ceiling height was maybe six foot eight. One window in the bedroom that no fire code anywhere would call an egress window.
What struck me was how normal it all was to her. Thirty years of rent, no inspector, no complaint, one tenant she likes. To the operator it was a liability with a person living inside it, because his lender wouldn't count that income and the city would want the ceiling and the window fixed before it counted as legal square footage. He offered on the house as a single family and told her plainly he'd probably have to ask the tenant to move during the work.
She cried a little. He gave the guy four months and helped him find a place. Deal closed. That basement is legal now and rents for $1,250, and I never did put money in, for unrelated reasons.