Pros / Cons of buying a tiny home and adding it as an ADU

[Marc Estepa]

Bigger Pockets fam!!!  Happy New Year!  So, I’m looking at my financial goals for this year and making moves. What are your thoughts on this:

I have a Single Family Home that’s been bleeding me in Fayetteville, NC.  I was on the verge of doing a 1031 exchange last month, but have had to delay it due to some issues with my property manager not communicating with my current tenant.  All good, tenant is month to month, PM has been fired and the rent has been raised keeping me in the green.

Anyway, a friend of mine was giving me ideas to make it more profitable rather than selling it.  I’ve also come across these prebuilt, tiny homes on Amazon.  Some of them are as cheap as $11K and pretty cool!

Wheels are turning and I'm thinking about plopping it in the backyard as an ADU. I know I would have to check with the HOA of the neighborhood to see whether or not this is even allowed, but aside from that - has anyone had any kind of experience with this?

What are the pros and cons?  Do you mind sharing your numbers for pouring a foundation, running a separate meter, building a driveway, tying into local sewage, water, trash etc.?  What about permits to do this with the county?  Any issues with tenants in the main home?  Hell, is this even worth it?!

It sounds good on paper, but what's the reality of doing this? Assuming the HOA even allows something like this - I figure this would be a quick return on investment.

How does this effect the price of the main home?  

Wheels are turning!!!!  Let’s discuss!!!

[Justin Tahilramani]

@Marc Estepa - What do the numbers look like on the property in Fayetteville? I doubt that adding an ADU will solve your problems.